A staggering 70% of African American Gen Xers say they may leave New York City when they retire, saying high debt, housing expenses and healthcare are hampering their ability to save, according to a new survey of African American city voters commissioned by AARP.
The survey was released at a panel discussion today in Harlem, with speakers including Rose E. Rodriguez, Chief Diversity Officer, Office of Governor Andrew Cuomo; Rawle Andrews, AARP’s Regional Vice President, Brittne Nelson, Sr. Advisor for State Research at AARP, Beth Finkel, State Director of AARP in New York, and Derrick Holmes, AARP NY Executive Council Member.
As Gen Xers started turning 50 this year, AARP conducted its first city survey of the generation, High Anxiety: NYC Gen X and Boomers Struggle with Stress, Savings and Security. AARP then created a supplemental report, High Anxiety: NYC African American and Black Gen X and Boomers Struggle with Stress, Savings and Security, to take a deeper look at what is driving the financial stress of African Americans in the city.
African Americans will be a large part of a looming “Gen-Xodus,” with large numbers of other New Yorkers also deeply concerned about being able to retire comfortably in NYC. In comparison to the African American numbers, 66% of the total population of Gen Xers, and 56 percent of Boomers say they may flee the city. Hispanics are equally as concerned as African Americans, with 71% of Gen Xers saying they may leave New York.
The poll of 800 city voters, split between Gen Xers and Baby Boomers, found that while financial anxiety is high among Gen Xers and Boomers of all races and ethnicities, African Americans in those age cohorts are feeling financial insecurities more widely.
Larger shares of African Americans worry about unexpected emergencies they cannot afford (66% Gen X, 64% Boomer) and not being able to pay their bills (62% Gen X, 58% Boomer).
The top financial worry for African American and Gen X (79 percent) and Boomer (68 percent) voters is not saving enough, followed by insufficient retirement planning (68% Gen X vs. 59 percent Boomer).
Compared to the total Gen X and Boomer voters in New York City, African American voters are more likely to experience obstacles to saving, particularly due to paying debt (54% African American vs. 44% total), family caregiving responsibilities (46% vs. 36% total), health needs (51% vs. 46%), and the cost of moving or changes in housing (46% vs. 38%).
African American voters in these generations also expressed higher concerns about affordable housing (74% vs. 62% total).
“These survey results should serve as an alarm that we to need find solutions that can help ease the financial pressures that African American New Yorkers are facing, while also helping them access savings vehicles through their employers that can help them build retirement savings,” said Reggie Nance, Associate State Director for African American Outreach at AARP New York.
“Gen Xers and Baby Boomers have more in common than one might have guessed if they live in New York City,” said Beth Finkel, State Director of AARP in New York State. “Neither generation thinks they can afford to retire in the city.”
The survey, and independent research, show coming retirement savings troubles among both Gen Xers and Boomers citywide. The average 401(k) account balance in New York was only $30,811 as of last year, according to the National Institute on Retirement Security – which found that in 2013 the average American household had just $3,000 in total assets in savings, and just $12,000 for those nearing retirement.
Among private sector African American workers age 18 to 64 in the state of New York, more than half (52%) are not covered by a workplace retirement plan – that’s nearly 440,000 people.
Yet the survey found 71% of African American Gen Xers who are in the labor force and confident they’ll be able to retire say they plan to stop working by age 65, despite the high levels of worry. This disconnect between a lack of savings and expecting to retire at 65 or younger suggests a retirement “reality gap,” and points to a need for more public financial literacy and new solutions.