About AARP. Acknowledgements

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2 About AARP AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. The AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at Acknowledgements AARP staff from the New York State Office; Community, State and National Affairs (CSN); and AARP Research contributed to the design, implementation and reporting of this study. Contributors include: Beth Finkel, Bill Ferris, David McNally, Erik Kriss, Erin Mitchell, Donna Liquori and Kimberly Spell from the New York State office; Sarah Mysiewicz and Reshma Mehta from CSN; Angela Houghton, Eowna Young Harrison, Brittne Nelson, Kate Bridges, Rachelle Cummins, Darlene Matthews and Cheryl Barnes from AARP Research; and Doris Gilliam, Office of General Counsel. Special thanks to Precision Opinion for the collection and tabulation of these data. For more information contact: Angela Houghton, Senior Research Advisor State Research AARP Research Tel. (202) ahoughton@aarp.org Copyright 2015 AARP AARP Research 601 E Street NW Washington, DC NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 1

3 TABLE OF CONTENTS Introduction... 3 Executive Summary... 4 About the Survey & Report Terms... 7 Detailed Survey Findings... 8 Current Financial Situation... 8 Confidence In Retiring Access to retirement plans (Among employed) Retirement Savings Behavior Retirement Income Expectations Debt and Other Barriers to Saving New York Affordability Support for A State Facilitated Retirement Savings Option Demographic Profile of Respondents Methodology NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 2

4 INTRODUCTION This year Generation X turned 50. With 2.5 million members across the state, AARP New York is the state s leading advocate for the 50+, and we believe now is the time for us to take stock of the financial plans of ers and how prepared they are for their financial future. To that end, AARP New York presents, High Anxiety: New York s and s Struggle with Stress, Savings and Security, a report detailing the findings behind a groundbreaking statewide voter survey of New York voters aged 35-69, Generation X and Baby s together. As Generation X emerges from the long shadow cast by the Baby s, they find themselves sandwiched between raising their children and caring for their aging parents while working longer hours to pay the bills. We found that ers lack the time and knowledge needed to manage and plan for their future. Not building a secure retirement is adding more worry to this most important and stressed population. It is vital that these worries are addressed by our elected leaders because an uncertain financial future for New Yorkers is an uncertain financial future for the state. Last year, we presented a voter survey that showed a majority of working New York Baby s plan to leave the state for their retirement. This year, we found even more members of intend to flee New York 66 percent, compared to the s 55 percent. In fact, one quarter of voters interviewed say they are extremely likely to leave New York when it s time to retire because they don t believe they can afford to stay in the state. Our state s cost of living, including the highest utility bills in the country, may lead to a Gen-Xodus for New York. But it doesn t have to be that way. At AARP New York we believe the critical insights into the economic position of the voters of both generations contained in this High Anxiety report can help serve as a roadmap for fostering better financial and retirement security and independence including access to a new kind of retirement blueprint. One solution that other states such as Illinois and Washington recently created is a statefacilitated retirement plan for those with no workplace pension or 401k, which AARP believes would ease ers and future generations worries. New York s elected officials and state policymakers are in a position to lend working New Yorkers a helping hand by ensuring that all who want to save for their retirement have a simple option for doing so. AARP is committed to ensuring New Yorkers are able to live their best lives as they age, and we believe financial and retirement security are key to that goal. In the long run, helping our citizens plan for their future and help themselves helps us all. Sincerely, Beth Finkel State Director, AARP New York NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 3

5 EXECUTIVE SUMMARY Much attention has been paid to America s retirement crisis. 1 With disappearing pensions, increasing longevity, a culture of spending versus saving and most recently the impact of the Great Recession on wealth and security the very way that Americans retire is changing. While s are at the forefront of this evolution, is the first generation that will fully come into retirement age with a new playbook, having lived the entirety of their working years during the rise of 401k plans and a shift away from traditional pension plans. As the first ers turn 50 this year, survey results reveal that New York s voters are even more anxious about retirement than their pre-retiree counterparts. With lower confidence in Social Security, fewer guaranteed benefits from retirement plans and more widespread debt, has reason to be worried. One-fourth of New York s and aged labor force is not confident they will ever be able to retire. One very big difference between and generations regarding retirement relates to their Social Security expectations. Thirty-eight percent (38%) of ers do not expect to receive any Social Security in retirement, which is nearly three times the share of equally pessimistic s (13%). Moreover, the majority of ers who do expect to receive any Social Security think it will be only a minor share of their retirement income. In spite of weaker expectations about Social Security, ers are only marginally more likely than s to participate in retirement savings. Thirty-seven percent of KEY SURVEY FINDINGS The top personal finance concerns for both and voters are: 1) not saving enough; and 2) not preparing enough for retirement. In both cohorts, a majority feels anxious about being able to have a comfortable retirement and one-fourth does not expect to retire at all. 30 percent of New York ers and 38 percent of s have no retirement savings. workers have significantly lower expectations of Social Security than s. Paying for education and student loan debt are barriers to retirement saving. Seven in ten ers are either current or expected future holders of student debt. ers indicate even stronger likelihood than s to leave New York during retirement 66 percent of compared to 55 percent of s. There is widespread voter support to improve access to workplace retirement plans with a statefacilitated savings option. 1 For more discussion, see and for more economic analysis: Are U.S. Workers Ready for Retirement? Schwartz Center for Economic Policy Analysis NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 4

6 workers and 48 percent of workers in New York either do not have access to employer-sponsored retirement plans or do not participate in currently available employer plans. Among all voters in each cohort and taking into consideration personal savings in retirement accounts, 30 percent of and 38 percent of s do not have any retirement savings account at all. For both ers and s, a common obstacle to saving for retirement is not having enough money after paying bills, which likely contributes to the lower likelihood of self-funding an individual retirement account outside of work. AARP research shows that workers are 15 times more likely to save for retirement if their employer offers a plan. 2 In New York State, 54% of private sector workers, or 3,621,611 people, are not offered a workplace retirement plan through their employer. 3 Paying for children s education is also an obstacle to saving for retirement, particularly for. Twenty-six percent of voters currently have student loan debt and nearly half (45%) expect to acquire student loan debt in the future to pay for a college education for themselves or their children. With two-thirds of student loan borrowers saying these loans make it even harder to save for retirement, a significant number of ers are at risk of further jeopardizing their retirement security due to student loans. The Schwartz Center for Economic Policy Analysis estimates that 32 percent of New York state s present day near retirees are at risk of retiring with incomes below poverty level. The next generation of retirees has arguably less favorable retirement circumstances, and yet, the majority of expects to retire by age 65. This disconnect suggests a retirement reality gap and demonstrates the need for more public financial literacy as well as new solutions. Without a drastic change in their current retirement preparedness, will be forced to make choices different than their parents generation for their retirement years. Retirement options for many may include resorting to working longer, relying on family and public assistance or by significantly reducing their standard of living. 4 When faced with the reality of having to significantly reduce consumption, concern about the affordability of living in New York may contribute to a premeditated intention to leave the state post-retirement. ers indicate even stronger likelihood than s to leave New York during retirement 66 percent of compared to 55 percent of s, with nearly one-fourth of saying they are extremely likely to leave. Whether for themselves or others, a large majority of voters worry about New Yorkers having to rely on public assistance in retirement because they have not prepared or lack access to plans. Taxpayers and state government will certainly feel the impact of having to provide aid and services to increasing numbers of potentially poor retirees. 5 2 Data compiled by AARP s Public Policy Institute from unpublished estimates from the Employee Benefit Research Institute of the 2004 Survey of income and Program Participation Wave 7 Topical Module (2006 data) The Reality of the Retirement Crisis, January Center for American Progress. 5 The Cost of Retiring Poor. Retiring Poor Impact Study, January Notalyss. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 5

7 A legislative proposal for a state-facilitated retirement savings option that would be available to all workers in New York garners strong support from a majority of all voters in both generational cohorts, regardless of employment status or current access to workplace retirement plans. and voters clearly want New York elected officials to support the creation of a statefacilitated retirement savings option so that more New York workers have an opportunity to save for retirement. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 6

8 ABOUT THE SURVEY & REPORT TERMS Terms In This Report : Age 35 to 50 : Age 51 to 69 In Labor Force: Currently employed or unemployed and looking for work Workers: Currently employed With Access to Retirement Plans: Currently employed and have access to an employer-sponsored retirement plan Without Access to Retirement Plans: Currently employed and do not have access to an employersponsored retirement plan Except where otherwise noted, data in this report is from a telephone survey of registered voters in the State of New York aged 35 to For analysis purposes, the sample was sub-divided into two generational cohorts:, age 35 to 50; and, age 51 to 69. The majority (76%) of survey respondents is currently in the labor force based on stated employment status, which is defined in this report as either currently employed or unemployed and looking for work. Nearly nine in ten (88%) voters are in the labor force; and while comparatively fewer s are working or looking for work, it remains a majority of them (63%). About one-fourth (26%) of all survey respondents, or a third of all in the labor force, is an owner or employee of a small business. As a share of labor force participants, s are more likely than ers to be small business owners or employees (41% vs. 31%, respectively). Small business was not defined in this survey. 7 Total Employment Status of Survey Respondents In Labor Force Retired Other Out of Labor Force 63% 76% 88% 2% 10% 28% 15% 9% 8% Type of Labor Force Participation among Survey Respondents In Labor Force (NET) Employed Small Business Owner/Employee Self Employed Looking for Work 26% 26% 26% 14% 14% 13% 6% 5% 6% 76% 88% 63% 56% 68% 44% Total s 6 Additional details on the research methodology can be found in the Method section of this report. 7 The fully annotated questionnaire can be found at NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 7

9 DETAILED SURVEY FINDINGS CURRENT FINANCIAL SITUATION According to the Bureau of Labor Statistics, the Great Recession ended in June 2009 after a 19- month economic decline 8. Since its end, the unemployment rate has decreased, the stock market has returned to pre-recession levels and home values are increasing. Despite these economic improvements, many still feel financially insecure. Nationally, as many as 35 percent of workers and 40 percent of workers believe the Great Recession has not yet ended and only one-fourth of either cohort say the economy is recovering or has fully recovered. 9 Among surveyed New York voters age 35 to 69, nearly four in ten are dissatisfied with their personal financial situation 24 percent are somewhat dissatisfied and 13 percent are very dissatisfied. Of note, a larger share of ers than s report dissatisfaction with their personal financial situation (40% vs. 33%, respectively). In a list of personal financial concerns that include saving, debt, expenses and employment opportunity into older age, the two things both and s worry about most are saving and planning for retirement. Nearly three-fourths (73%) of ers worry about not saving enough and two-thirds (67%) worry about not planning enough for retirement. Among s, six in ten worry about not saving enough (62%) and more than half (55%) worry about not planning enough for retirement The Retirement Readiness of Three Unique Generations:Baby s, Generation X, and Millennials. 15th Annual Transamerica Retirement Survey of Workers, April 2014, Transamerica Center for Retirement Studies (TCRS) NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 8

10 With the single exception of older worker security, is more likely than their counterparts to worry about personal finances across the board, in particular about not saving enough, not planning for retirement, having too much debt and not being able to pay bills. Despite their theoretic longer time to plan for retirement compared to s, this particular worry holds a top of mind presence as often for as it does for s. : How frequently do you worry about... when it comes to your personal financial situation? Base: New York State Voters Often Sometimes Not saving enough 41% 33% 74% Not planning enough for retirement 30% 37% 67% Having an unexpected emergency that you won t be able to pay for 23% 35% 58% Having or taking on too much debt 24% 31% 55% Not being able to pay your bills 21% 26% 47% Not being able to keep or find a job because of age 9% 14% 23% : How frequently do you worry about... when it comes to your personal financial situation? Base: New York State Voters Often Sometimes Not saving enough 32% 30% 62% Not planning enough for retirement 30% 25% 55% Having an unexpected emergency that you won t be able to pay for 22% 30% 53% Having or taking on too much debt 18% 24% 42% Not being able to pay your bills Not being able to keep or find a job because of age 19% 18% 37% 14% 16% 29% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 9

11 CONFIDENCE IN RETIRI NG As further confirmation that retirement, or rather lack of sufficient retirement planning and saving, is a source of stress and anxiety, there is also lagging confidence in being able to ever retire or to do so comfortably. Among both and voter cohorts in New York, one-fourth of those in the labor force is not confident they will ever be able to retire and another one-third is only somewhat confident. A similar proportion of each age group feels anxious about not having enough money to live comfortably through their retirement years, with slightly more likely to be anxious than s. It is clear that a substantial share of each generation is facing a tough reality of working indefinitely and/or having to reduce their standard of living to below what is currently considered comfortable. 80% 60% 40% 20% How confident are you that you will be able to retire at some point and no longer work for money? Base: New York State Voters in the Labor Force Age 35 to 69 Extremely Very Somewhat Not too Not at all 14% 17% 14% 22% 24% 32% 33% 25% Not Confident 14% 12% 11% 25% Not Confident 13% How anxious do you feel about having enough money to live comfortably through your retirement years? Not anxious at all Not very anxious Somewhat anxious Very anxious 62% Anxious 55% Anxious 43% 35% 23% 25% 19% 19% 20% The fact that confidence levels in this regard among are equal to or worse than s suggests that retirement circumstances are not going to improve for younger generations. Although has more time to accelerate savings and planning before a hoped-for retirement age, they are not any more optimistic than s. In brief, decreasing retirement confidence implies a future shift toward the importance of earning potential, job opportunity and work security during one s later years. 0% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 10

12 For the three-fourths of voters age 35 to 69 currently in the New York labor force who expect to retire, the average age of expected retirement is 65 for both and s. However, twothirds of expects to retire at age 65 or before, whereas a larger percentage of older working s are unsure at what age they will retire. 10 Although has more time to build up savings, their expectations seem unrealistic considering nearly one-third of New York State s present day near retirees are at risk of retiring with incomes below poverty level. 11 Expected Retirement Age Base: New York State Voters in the Labor Force Age 35 to 69, At Least Somewhat Confident They Will Retire 60% 40% 20% 40% 30% 26% 17% 16% 18% 15% 16% 7% 7% 0% Under to and over Don't know Having access to an employer-sponsored retirement savings plan makes a significant difference in worker expectations about working into later life. Forty-three percent of those with access to workplace retirement plans expect to retire under age 65 compared to only 17 percent of those without access. On the other end of the spectrum, 31 percent of those without access to a plan expect to work until age 70 and beyond before retiring, versus 12 percent of those with access to a plan saying the same. Expected Retirement Age by Access to Workplace Retirement Plan Base: New York State Voters in the Labor Force Age 35 to 69, At Least Somewhat Confident They Will Retire 60% With Access Without Access 43% 40% 20% 17% 24% 22% 31% 11% 9% 12% 9% 18% 0% Under to and over Don't know 10 Similar results reported nationally: workers are significantly more likely than workers to expect to retire at age 65 (36% vs 18%) Are U.S. Workers Ready for Retirement? Schwartz Center for Economic Policy Analysis NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 11

13 ACCESS TO RETIREMENT PLANS (AMONG EMPLOYED 12 ) Which of the following ways to save for retirement does your current employer provide? Base: Currently Employed New York State Voters Age 35 to 69 Both Defined Benefit and Defined Contribution DC Only DB Only None Total 42% 42% 21% 25% 10% 10% 24% 20% NET PLAN ACCESS Defined Contribution Total = 63% = 67% = 56% Small Business = 37% Small Business Owner or Employee 40% 16% 11% 29% 24% 13% 5% 52% Defined Benefit Total = 52% = 52% = 51% Small Business = 29% In New York, 20 percent of workers and 29 percent of workers have no access to a workplace retirement savings plan. While many in both generations have access to both Defined Contribution and Defined Benefit plans, Defined Contribution plans are much more common for workers. For small business owners and employees in the state, half of them (52%) have no access at all to a workplace retirement savings plan - a level comparable to that of all private sector workers in the state. 13 How confident are you that you will be able to retire at some point and no longer work for money? 56% Base: Currently Employed New York State Voters Age 35 to 69 With Access to Workplace Retirement Plan Extremely/Very confident 46% Not too/not at all confident 20% Retirement confidence is correlated with access to retirement plans. Among and workers in New York without access to plans, nearly one in three (31%) is not confident they will ever be able to retire compared to one in five (20%) among those with access. Without Access to Workplace Retirement Plan 29% 31% 12 Survey data includes both public and private sector workers. 13 Fifty-four percent of private sector employees or 3,621,611 New York workers had no access to retirement plans through their employer (average ). NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 12

14 RETIREMENT SAVINGS B EHAVIOR 80% 60% 40% 20% Workplace Retirement Plans (Among Workers)* Base: Currently Employed New York State Voters Age 35 to 69 No Access to Workplace Retirement Plan 24% Do Not Participate in Workplace Retirement Plan 41% 20% 37% 29% 48% 65% 52% Taking into account plan participation, overall workplace retirement saving is even less common. Thirty-seven percent of workers and 48 percent of workers are not saving through a workplace retirement plan. Among small business owners and employees, the rate of non-participation is comparatively lower. Yet, due to limited availability of plans, nearly two-thirds of small business owners and employees are not saving for retirement through a workplace plan. 0% Small Business Owner or Employee Total Small Business Owner/ Employee Total Retirement Savings (All Voters) Total 28% 34% 48% 39% 30% 38% 35% 35% 46% 51% 50% 54% None 0% 20% 40% 60% 80% Personal Employer sponsored Without workplace retirement plans, it is even more important to build up personal savings through an IRA or other retirement savings plan. However, just under half of surveyed New York voters age 35 to 69 have done so. When taken together and on net, 30 percent of voters in New York and 38 percent of s have neither a work sponsored nor a personal retirement savings plan. A similar share of small business owners and employees is not saving at all (35%) and just over half are saving in personal retirement savings accounts outside of work. *Note: Survey data includes both public and private workers. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 13

15 RETIREMENT INCOME EXPECTATIONS In spite of lagging participation in retirement plans or savings accounts, both ers and s are most likely to expect their largest share of retirement income to come from a retirement savings plan. But, when it comes to expectations of Social Security, there are significant differences between the generations. Nearly eight in ten (79%) ers say their savings will provide the largest share of their income in retirement either from a retirement plan or their own personal savings outside of a retirement plan or account. Just 14 percent of No Access to Workplace Retirement Plan Percent Expecting Each Source to Provide the Largest Share of Retirement Income A retirement savings plan, like a pension, 401k or IRA Social Security Personal savings or investments not in a retirement plan Other/Don't Know 5% 9% 12% 9% 18% 18% 14% 7% 9% 12% Role or Expected Role of Social Security in Retirement Income Only Source Major Source Minor Source None 62% Any SS Income 48% 30% 28% 18% 11% 24% 50% 35% 56% 49% 38% 87% Any SS Income 78% Any SS Income 61% No Access to Workplace Retirement Plan 0% 20% 40% 60% 80% 13% 22% say that Social Security will be their largest share of income. Furthermore, 38 percent of voters in New York do not expect to receive any Social Security income at all. Among s, twice as many (30%) say Social Security will be their largest share of income in retirement and just 13 percent do not expect to receive any social security income at all in retirement. Among workers without access to workplace retirement plans, about half have personal retirement plan accounts such as an IRA (54%) - only slightly more than all workers in the 35 to 69 age cohort (48%). However, just one-third of workers without access to workplace retirement plans expect their retirement savings to be their major source of income. Somewhat larger shares expect personal savings outside of retirement accounts or Social Security to provide their largest share of income, but a fairly sizeable portion (22 percent) do not expect to receive any Social Security income at all. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 14

16 Workers currently without access to retirement plans at work see the value of such plans. Nearly seven in ten (69%) positively affirm they would participate in a way to save for retirement at work if their employer offered it. workers in particular are even more likely to take advantage of employer-offered plans to save (80% likely) with a majority indicating the strongest degree of likelihood. Fifty-nine percent of workers without access to a workplace retirement savings plan would participate in a plan at work if one became available. A similar majority of small business owners and employees (63%) also would take advantage of a plan to save for retirement if one were available to them through work. If your employer offered a way to save for retirement, how likely would you be to take advantage of it? Base: Currently Employed New York State Voters Age 35 to 69 Without Access to Workplace Retirement Plan Very Somewhat Not very Not at all Not sure/don t know 69% Likely Total 54% 15% 6% 14% 10% 80% Likely 63% 17% 4% 9% 7% 59% Likely 45% 14% 8% 18% 12% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 15

17 DEBT AND OTHER BARRI ERS TO SAVING Despite high levels of anxiety about not saving or preparing enough for retirement, current expenses are considered financial barriers for many New York voters age 35 to 69. The most reported obstacle is not having enough money left after paying bills more than half (56%) report this as an obstacle; and nearly half (49%) are hindered by paying for their children s education. Two in five say losing a job or taking a pay cut (41%), facing a major health need (41%), or having to pay off debt (40%) are Major Obstacles to Saving For Retirement Years No money left after paying for bills Paying for children s education Losing a job or taking a big pay cut Facing a major health need Having a lot of debt to pay off New home purchase or move Caring for an elderly parent or relative Decreased home value Any other type of loan or debt 44% 36% 37% 32% 34% 32% 32% 32% 42% 44% 39% 38% 43% 59% 54% 56% 0% 20% 40% 60% 80% Types of Loans or Debt Currently Held Any Loan/Debt (NET) Credit card Home loan Auto loan Student loan 21% 26% 15% 11% 10% 11% 39% 44% 33% 55% 59% 51% 53% 59% 46% 80% 85% 74% Total obstacles to saving for retirement years. Other major obstacles to saving for retirement are moving or purchasing a new home (34%), caring for an elderly loved one (33%), and decreased property value (32%). On all items, is more likely than s to cite them as obstacles to saving for retirement, save one: facing a major health need or problem. In its ongoing Retirement Confidence Survey, the Employee Benefit Research Institute (EBRI) has consistently found a relationship between the level of debt among workers and their retirement confidence. 14 In New York, the majority of and aged voters (80%) have some form of debt. When asked about types of loans or debt currently held, credit cards (55%) and home loans (53%) were the most reported. For nearly all types of debt included in the survey, ers are more likely to have it than s Retirement Confidence Survey, Employee Benefit Research Institute. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 16

18 100% 80% 60% 40% 20% 0% Current and Expected Future Student Loan Holders Current or Future (Net) Current Future 54% 33% 21% 71% 26% 45% 35% 20% 15% Total In What Ways Has Paying Off Student Loan Debt Affected You? Base: Current Student Loan Holders Among New York State Voters Age 35 to 69 Made it harder to save for retirement Made it harder to pay other bills or make ends meet Made it harder to afford a home Make it harder for you to save for retirement Make it harder for you to pay other bills or make ends meet Make it harder for you to afford a home 38% 40% 60% 55% 68% In What Ways Do You Worry that Paying Off Student Loan Debt Will Affect You? Base: Expected Future Student Loan Holders Among New York State Voters Age 35 to 69 65% With regard to student loans specifically, about one in five (21%) of and voters currently have student loan debt. Notably, even more (33%) expect to have student loans in the future this is true for both (45%) as well as s (20%). One-fourth of voters currently have student loans and an incredible 45 percent expect to become student loan holders in the future. Among s, levels are relatively lower but still one-third overall are either current or future student loan borrowers. Two-thirds of current and future student loan holders say paying off such debt has made or will make it harder to save for retirement. Significant proportions also say it has a negative impact on paying bills or affording a home. As might be expected, the presence of debt is correlated with a much higher likelihood to worry about personal finances and at a more frequent rate. While all and New Yorkers worry about saving enough and planning for retirement, student loan holders are 33 percent more likely to worry about these concerns. Furthermore, holders of student loan debt are less likely to be satisfied with their personal financial situation (47% versus 63% satisfied among all 35 to 69 year olds); and are significantly more likely to cite barriers to saving for retirement, in particular having no money after paying for bills (73% vs. 56%); paying for children s education (69% vs. 49%); and having too much debt (67% vs. 40%). NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 17

19 NEW YORK AFFORDABILITY How concerned are you about your ability to pay RENT/MORTGAGE in the future? Extremely concerned Very concerned Somewhat concerned 12% 14% 12% 14% 28% 20% 46% 54% For both generational cohorts, the most commonly cited obstacle to saving for retirement is not having enough money left after paying for bills. For New Yorkers, the affordability of month-to-month housing expenses is concerning to both and voters. Half or more of each group is at least somewhat concerned about their ability to pay rent/mortgage, property taxes or utility bills in the coming years. In general, the level of concern is comparable between the two age groups with little variation or differentiation. How concerned are you about your ability to pay PROPERTY TAXES in the future? Extremely concerned Very concerned Somewhat concerned 14% 17% 27% 58% 15% 22% 25% 62% How concerned are you about your ability to pay UTILITY BILLS in the future? Extremely concerned Very concerned Somewhat concerned 9% 13% 30% 52% 13% 14% 26% 53% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 18

20 Three out of five (60%) New York State voters age 35 to 69 say they are at least somewhat likely to leave New York once they retire. A 2014 AARP survey of New York voters found that 60% of future Baby retirees were likely to leave New York State after retiring, thus creating economic implications for the state economy when retirees take their consumer expenditures elsewhere. 15 Here again in this survey, a near similar proportion of s age 51 to 69 are at least somewhat likely to leave the state in the future (55%). Moreover, presents even stronger intent to leave the state post-retirement. Nearly one-fourth (23%) of voters in New York can scarcely see themselves retiring in the state, reporting extreme likelihood of leaving once they retire. A total of 66 percent of ers consider themselves at least somewhat likely to leave. How likely are you to leave New York State and live somewhere else once you retire/in the future? Extremely likely Very likely Somewhat likely Not very likely Not at all likely 60% Likely Total 18% 17% 26% 19% 20% 66% Likely 23% 18% 26% 18% 15% 55% Likely 13% 16% 25% 19% 26% State of the 50+ in New York State, AARP Research. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 19

21 SUPPORT FOR A STATE FACILITATED RETIREMENT SAVINGS OPTION PROPOSED STATE FACILITATED RETIREMENT SAVINGS OPTION FOR WORKERS One way to help more New Yorkers save would be for the state to set up a retirement savings plan, similar to a 529 college savings plan, where workers can contribute to a private retirement account that is professionally managed. Workers can choose whether or not to participate, and the account would be portable from job to job. The plan would have low fees and not cost taxpayer dollars. In order to help close the gap in access to retirement savings plans, New York voters age 35 to 69 support a state facilitated retirement savings option for New York. Specifically, about seven in ten strongly (44%) or somewhat (27%) support such a proposal. A state facilitated retirement savings option would most directly benefit those without access to a plan in their workplace, including small business owners and employees who tend to have lower levels of access currently. These two sub-groups of New York workers present similarly strong levels of support for such a solution. More than three-fourths of workers without access to a workplace retirement plan support a proposal for a state-facilitated plan; and 70 percent of small business owners and employees support it. How Strongly do you support or oppose the proposal for a state retirement savings plan? Base: New York State Voters in the Labor Force Age 35 to 69 Strongly support Somewhat support Neither/nor Somewhat oppose Strongly oppose 70% Support Total 44% 27% 12% 5% 8% Without Access to Workplace Retirement Plan Small Business Owner or Employee 42% 45% 47% 45% 73% Support 31% 11% 5% 8% 67% Support 22% 13% 6% 8% 76% Support 29% 10% 4% 7% 70% Support 25% 11% 4% 10% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 20

22 When asked about potential features in a state facilitated savings option for retirement, all features are considered important. The top-ranked important feature is portability. Almost all (92%) believe account funds should be portable so that the money travels with the owner. About nine in ten also say it should be easy to use (90%), have a low cost to taxpayers and participants (89%), provide tax advantages to enrollees (88%), be voluntary (88%) and be available to everyone (87%). Many (81%) also believe it is important for the money to be professionally managed. If New York Were to Implement a Retirement Savings Plan, How Important Would Each Feature Be? Very Important Portability (account can move from job to job) Easy to use Low cost to taxpayers Low cost to participants Tax advantages for enrollees Voluntary enrollment Available to everyone in the state Somewhat Important 82% 74% 76% 72% 66% 68% 68% 10% 16% 13% 17% 22% 20% 19% Professional money management 51% 30% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 21

23 Most (75%) New York voters age 35 to 69 agree that New York elected officials should support creating a state managed retirement savings plan so more New York workers have an opportunity to save for retirement. Forty-three percent strongly agree that this should be a concern of elected officials. Should New York elected officials support the creation of a state managed retirement savings plan? Strongly agree Somewhat agree Neither/nor Somewhat disagree Strongly disagree 75% Agree Total 43% 33% 12% 3% 7% 76% Agree 43% 33% 12% 3% 7% 74% Agree 45% 29% 12% 3% 8% Total How concerned are you as a taxpayer that some New Yorkers have not saved enough for retirement and could end up reliant on public assistance? Very Somewhat Not very Not at all 48% 46% 50% 82% Concerned 34% 81% Concerned 35% 83% Concerned 33% 10% 7% 12% 6% 9% 7% Taxpayers themselves are concerned that New Yorkers are not saving enough for retirement. A majority (82%) are concerned that many could end up relying on public assistance. Almost half of New York voters are very concerned while another third (34%) are somewhat concerned. Although and s are comparably worried, s are slightly more likely to be very concerned that retirees are ill prepared and will become reliant on public aid. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 22

24 RACE AGE INCOME POLITICAL VIEWS PARTY AFFILIATION EDUCATION AARP CIVIL STATUS DEMOGRAPHIC PROFILE OF RESPONDENTS Married or living with a partner Widowed Divorced or separated Never married AARP Member AARP Non-Member High school graduate or less Post high school or 2 year degree 4 year degree Post graduate study or graduate degree Democrat Republican Independent Something else Conservative Moderate Liberal None of these <$30K $30K-<$50K $50K-<$75K $75K-<$100K $100,000-<$150,000 $150,000+ Don't know/refused Asian Black or African American Hispanic or Latino White or Caucasian Mixed/ some other race 3% 9% 15% 24% 22% 26% 25% 26% 36% 24% 23% 13% 28% 30% 21% 17% 9% 13% 16% 15% 16% 14% 18% 29% 21% 26% 23% 1% 12% 11% 4% 72% 69% 74% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 23

25 s Civil Status Married or living with a partner 72% 64% Widowed 1% 5% Divorced or separated 3% 14% Never married 19% 12% Membership AARP 7% 42% AARP Non-Member 92% 56% Education High school graduate or less 18% 27% Post high school or 2 year degree 26% 25% 4 year degree 27% 23% Post graduate or graduate degree 28% 24% Party Affiliation Democrat 34% 38% Republican 22% 25% Independent 25% 21% Something else 16% 11% Political Views Conservative 26% 30% Moderate 30% 29% Liberal 20% 22% None of these 20% 14% Income <$30K 8% 11% $30K-<$50K 8% 18% $50K-<$75K 15% 18% $75K-<$100K 17% 12% $100,000-<$150,000 18% 13% $150, % 11% Don't know/refused 16% 18% Race/Ethnicity Asian 2% 1% Black or African American 15% 10% Hispanic or Latino 13% 8% White or Caucasian 65% 72% Mixed/ some other race 3% 5% NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 24

26 METHODOLOGY AARP 2015 NY State - Survey Prepared by Precision Opinion for AARP May 2015 SUMMARY: The AARP 2015 New York State - Survey was conducted as a telephone survey among registered voters age 35 to 69 in the state of New York. The survey collected the opinions of New York registered voters on issues related to financial worries and retirement security. The survey was approximately 15 minutes in length. The interviews were conducted in English by Precision Opinion from February 26th to March 12th, Respondents were sampled from a voter list with a total of 801 interviews completed: 400 among 35 to 50 year old voters ( ) and 401 among 51 to 69 year old voters ( ). The sample was split into two strata by age ( and ) and quotas were set in order to achieve a 50/50 split among these two cohorts. In addition, quotas were set by gender within age group in order to maintain the proper representation of males and females. The margin of sampling error for the New York statewide sample of 801 is +/-3.5%. The margin of sampling error for the and samples of 400 each is +/-5.0%. DESIGN AND DATA COLLECTION PROCEDURES: Sample The survey respondents were sampled from a registered voter list provided by L2 (Labels & Lists). The voter list was age targeted to based on L2 s database of registered voters in the state of New York. The sample list was a blended landline and cell phone. A total of 36,178 records were dialed. From this total, 12,329 cell phone records were dialed, from which 98 surveys were completed. Questionnaire Development and Testing The questionnaire was developed by AARP staff. Prior to this project s launch, testing was completed internally at Precision Opinion and additionally by AARP staff. Further, Precision Opinion ran a simulated data set and conducted a full review of said data prior to commencing field work. NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 25

27 Contact Procedures Precision Opinion asked to speak with the registered voter listed on file. If that person was unavailable, Precision Opinion asked to speak with another registered voter in the household aged WEIGHTING The sample was weighted by gender and region within the Generation X and Baby strata. The combined sample was weighted by gender and region to reflect the total population of registered voters in the state of New York age Total 35 to 69 Unweighted Total 35 to 69 Weighted N= % N= % Total Factor Male % % Female % % NYC % % Long Island % % Erie % % Onondaga % % Dutchess % % Monroe % % Capital Region % % Rest of state % % Unweighted Weighted N= % N= % Total Factor Male % % Female % % NYC % % Long Island % % Erie % % Onondaga % % Dutchess % % Monroe % % Capital Region % % Rest of state % % NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 26

28 Unweighted Weighted N= %= N= %= Total Factor Male % % Female % % NYC % % Long Island % % Erie % % Onondaga % % Dutchess % % Monroe % % Capital Region % % Rest of state % % Note: Universe proportions according to L2 database for all registered voters, state of New York age RESPONSE RATE / COOPERATION RATE / REFUSAL RATE The response rate for this study was measured using AAPOR s response rate 3 method. The cooperation rate was measured using AAPOR s cooperation rate 3 method. The refusal rate was measured using AAPOR s refusal rate 3 method. The table below contains these rates. Response Rate Cooperation Rate Refusal Rate Total 11% 92% 4% 10% 93% 3% 12% 92% 5% *Source: AAPOR Outcome Rate Calculator Version 2.1 May 2003 ANNOTATED QUESTIONNAIRE A fully annotated questionnaire and more information about this survey can be found at: NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 27

29 AARP New York 780 Third Ave 33 rd Floor New York, NY Phone: (866) Website: AARP Research 601 E Street NW Washington, DC NEW YORK GEN X AND BOOMERS STRUGGLE WITH STRESS, SAVINGS AND SECURITY 28