For many still-working New Yorkers, the so-called golden years in retirement might come with insufficient savings for a lifestyle of comfort and leisure.
Fewer than half of metropolitan New Yorkers in a recent Wells Fargo & Co. survey said they are confident they”™ll have saved enough money to sustain them through retirement.
And 50 percent of those New Yorkers below retirement age expect that they”™ll have to work during retirement in order to afford their lifestyle or simply to make ends meet. That percentage was significantly higher than the national average among investors surveyed last December.
The survey was conducted by Wells Fargo with Richard Day Research, a marketing research firm in Evanston, Ill. Survey respondents were non-students from ages 25 through 75 who are the primary or joint financial decision-maker in households with investable assets of at least $25,000.
The survey findings suggest that the recession and economic downturn, a volatile stock market and dwindling 401K plan earnings and contributions have left still-employed investors facing a long-term future of financial insecurity not seen by current retirees.
Three out of four retirees surveyed in the metropolitan market ”“ which includes Westchester County and Fairfield County, Conn. ”“ were confident that they have the money to sustain the lifestyle they want through retirement. That was slightly lower than the nationwide average in the survey.
Only 8 percent of retired New Yorkers said they continue to work because of financial need, slightly higher than the national average.
A substantial number of both retirees and pre-retirees agreed they need to cut back on their spending now either to save for retirement or to avoid running out of money in what”™s left of their golden years. In the metropolitan New York area, 48 percent of respondents anticipating retirement said personal spending cuts were needed promptly. Among area retirees, 28 percent said they expect to cut back on spending in order to sustain their lives of leisure.
Among pre-retired New Yorkers, men were significantly more confident than women that they”™ll have enough money saved by retirement, by a 54 percent to 39 percent majority.
On average, both retired and pre-retired New Yorkers said they”™d need at least $500,000 in savings to support them throughout retirement.
Among pre-retirees in this area, the median amount currently saved for retirement is about 13 percent of their anticipated retirement need. New York retirees are better prepared, though their median savings is only about 80 percent of their anticipated need.
Among New York respondents whose employers offer a 401K plan, 87 percent have assets in their current plan. However, fewer employers in the New York area provide matching 401K contributions ”“ 53 percent ”“ than the 70 percent of companies nationwide that matched employee contributions. In New York, 83 percent of respondents said their employer match encourages them to save more.
Among all New York respondents, 47 percent said they expect to receive or currently receive a pension.
Both retired and pre-retired respondents strongly supported changes to make investment and retirement planning through 401K plans easier. Favored improvements included a fixed monthly payment option from their retirement accounts during retirement; personal retirement investment advice services provided by employers; automatic enrollment by employers in a 401K or similar plan, and automatic 1 percent annual increases in employee contributions.
Closer proximity to Wall Street apparently does not breed greater confidence in the stock market. Among all survey respondents in the New York area, 59 percent said they are not confident that the stock market is a good place to invest for retirement. Nationwide, 55 percent of respondents lacked confidence in the stock market for their retirement investments.
If given $5,000 today for retirement, 33 percent of surveyed New Yorkers said they”™d invest in mutual funds, compared with 44 percent nationwide.
The next best $5,000 bet for New Yorkers”™ golden years? Gold. Fifteen percent of respondents said they”™d invest in ingots, compared with 10 percent nationwide.
