New Yorkers have\u00a0about $670,000 saved for retirement on average \u2014 far short of the $1.12 million needed to cover expected expenses, according to an analysis of survey data published in August<\/a>\u00a0by Seniorly, an online marketplace connecting older adults and families to senior living communities.<\/p>\n \u201cIn retirement, you don\u2019t have access to employment income and overtime,\u201d said William Bengen, a California-based financial adviser who once lived in Brentwood\u00a0on Long Island. \u201cYou can overspend sometimes and make up for it when you\u2019re working, but when you\u2019re depending on Social Security, annuities and pensions alone, there\u2019s no way to get extra income if you outspend \u2014 so it\u2019s really important to be mindful of your budget.\u201d<\/p>\n Bengen is widely known in financial planning circles as the creator of the \u201c4% rule,\u201d a guideline that has shaped retirement advice for decades. It holds that retirees can safely withdraw about 4% of their savings in the first year of retirement, then adjust that amount annually for inflation, to make money last roughly 30 years.<\/p>\n He recently revised that formula, saying his updated research and a broader mix of investments show retirees could withdraw between 4.7% and 5.5% in the first year.<\/p>\n That means someone with $670,000 in savings could start retirement by taking out $31,500 to $36,800 in the first year \u2014 a few thousand dollars more than under the original rule.\u00a0<\/p>\n But even with more generous assumptions, experts say many Long Islanders still face gaps.<\/p>\n The region has seen\u00a0the largest growth in its senior population in the state in recent years, with a 24% increase between 2013 and 2023, Newsday\u00a0has reported.<\/a>\u00a0During that same period, the poverty rate for people 65 and older on Long Island rose\u00a062%.<\/p>\n Andrew Spieler, a finance professor at Hofstra University said\u00a0Long Islanders facing shortfalls in retirement “is not a new problem.”<\/p>\n \u201cBut it\u2019s probably become a more severe problem slowly over time,\u201d he said.<\/p>\n Shifting safety nets<\/p>\n For earlier generations, pensions offered a guaranteed stream of income in retirement. Today, most workers must rely on their own savings \u2014 and that shift has left many older Americans more vulnerable, experts say.\u00a0<\/p>\n Much of that vulnerability traces back to the decline of pensions since the 1980s, Spieler said, \u201ccreating more people who need to provide for themselves.\u201d<\/p>\n The number of Americans with traditional pension plans in the private sector dropped from 27.2 million in 1975 to 12.6 million in 2019, according to a 2021 congressional report<\/a>.<\/p>\n As of March 2024, only 15% of private industry workers<\/a> had access to a pension, compared with 86% of state and local government workers<\/a>, federal data shows.<\/p>\n \u201cBeginning over 40 years ago, many companies switched from pensions to 401(k)s,\u201d said Ed Slott, a Rockville Centre\u2013based financial expert who specializes in retirement planning. \u201cThis transferred both the risk and responsibility of saving for retirement from the companies to the employees. The money for retirement is more likely in a 401(k) or IRA now.\u201d<\/p>\n Those accounts come with restrictions. People generally cannot tap them without a penalty until age 59\u00bd. They must begin taking minimum withdrawals at 73, according to federal rules. Social Security benefits typically start at 62<\/a>, though delaying a claim increases the monthly check.<\/p>\n “Today\u2019s workers need to fund their own retirement savings,” Slott said. “This is true universally, but especially in Long Island where real estate taxes and other costs of living are very high\u00a0compared to other parts of the country.”<\/p>\n Even public pensions, which remain far more common than private ones, have been pressured across the country\u00a0by underfunding and volatile investments<\/a>. A report this year<\/a> from Equable, a nonprofit that researches public pensions, found many state and local systems nationwide in fragile condition after weak investment returns.<\/p>\n New York\u2019s system is among the nation\u2019s largest and, by the state comptroller\u2019s account<\/a>, among the best managed and best funded. But unions have criticized<\/a>\u00a0state pension reforms passed more than a decade ago that required newer employees to contribute more and work longer before collecting benefits. Lawmakers at the time argued the pension system<\/a>\u00a0was financially unsustainable and the changes were necessary.<\/p>\n Longer lives and higher costs<\/p>\n Americans are living longer and their money has to stretch further. Inflation in recent years has made that challenge even harder, Spieler\u00a0said.\u00a0<\/p>\n Long Islanders tend to outlive the national life expectancy average of 78.4 years, federal data shows<\/a>. In Suffolk County, children born today are expected to live to 80, and in Nassau County, 82, according to the 2024 County Health Rankings and Roadmaps report.<\/a>\u00a0<\/p>\n On a national level, the country has also seen around 26.36% in cumulative inflation since 2019, according to in2013dollars.com<\/a>, a site that measures inflation. New York City specifically experienced around 23.6% in cumulative inflation during that period.<\/p>\n \u201cIt\u2019s become very expensive for people\u201d to live on Long Island, said Craig J. Ferrantino, a certified financial fiduciary and wealth strategist, and the founder and president of Craig James Financial Services in Melville. \u201cIt\u2019s gotten very expensive for seniors…and yes, they\u2019re running out of money.\u201d<\/p>\n The bills that hit hardest are often unavoidable ones. Homeowners face rising property taxes. Medical costs climb as people age. Some parents give generously to their children, then struggle themselves when inflation or surprise expenses arrive, Ferrantino said.<\/p>\n It\u2019s gotten very expensive for seniors…and yes, they\u2019re running out of money.<\/p>\n \u2014\u00a0Craig J. Ferrantino, president of Craig James Financial Services<\/p>\n \u201cThe biggest fear for the parents is having their kids supporting them,\u201d Ferrantino said, adding that, as a volunteer paramedic, he has responded to multiple calls from older residents who felt woozy after cutting back on medications to save money.<\/p>\n The financial squeeze can deepen when one spouse dies, Slott said. The survivor keeps only the higher<\/a> of the two Social Security checks, not both, and many pensions reduce payments<\/a> for widows and widowers.<\/p>\n “If there are no savings, then they may need help from children, or cut their living expenses, and that could mean moving to a place where the cost of living is lower,” he said.<\/p>\n Coping strategies Sound Beach resident Mike Torriero, a youth wrestling coach, said he has this solution to the retirement shortfall problem: keep on working. Credit: Newsday\/Brianne Ledda<\/p>\n With fewer pensions and more uncertainty, financial experts say retirees have to be proactive. That can mean trimming spending, finding ways to stretch savings or even\u00a0working longer.<\/p>\n \u201cThe best way to have money for retirement is not to retire,\u201d said Slott, stressing that retirees should build some financial cushion into their budgets. \u201cKeep working. If you have income coming in, that\u2019s more years you\u2019re not spending your savings.\u201d<\/p>\n That’s the plan for Mike Torriero, 43, a youth wrestling coach from Sound Beach who said he intends to work for as long as he’s able, although he acknowledged that’s not a traditional choice.<\/p>\n “I love what I do,” he said. “As far as the financial implications [of retirement], I’m a long way away and I’m not overly concerned with it right now.”\u00a0<\/p>\n Retirement is more imminent for others.<\/p>\n Business owner Betty-Ann Crimi is almost ready retire but has concerns about affordability. Credit: Newsday\/Brianne Ledda<\/p>\n Betty-Ann Crimi, 67, owner of vintage store Deja Vu on Main in downtown Babylon, said she plans to step back within the next year or two. She’s looking forward to spending more time with family.\u00a0<\/p>\n \u201cI\u2019ve been here 14 years,\u201d she said. \u201cI have a lot of great customers, but I have two grandchildren now.\u201d<\/p>\n Crimi admitted she has concerns about her future finances as prices continue to rise. She plans to rely on savings and Social Security, and may keep selling goods online.<\/p>\n Ferrantino said strategies like managing expenses and paying down credit card debt can help retirees stay afloat.<\/p>\n \u201cAdvanced planning is key,\u201d he said, \u201cand it\u2019s even more key in New York.\u201d<\/p>\n Brianne Ledda covers personal finance and affordability for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.<\/p>\n","protected":false},"excerpt":{"rendered":"Richard Drechsler, 77, is comfortable in his retirement. The Vietnam War veteran said he has paid off the…\n","protected":false},"author":2,"featured_media":169867,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-169866","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/169866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=169866"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/169866\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/169867"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=169866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=169866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=169866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/p>\n
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