Retirement Readiness of New York City's Workers

New Yorkers need reliable and convenient methods to save for their retirement. Secure pension income benefits the city economy by increasing older residents' purchasing power and keeping social spending down. However, low and decreasing retirement plan coverage rates and the shift from traditional defined benefit pension plans to 401(k)-type plans are threatening New Yorkers' financial readiness for retirement. Only 33 percent of New York City workers were participating in a workplace retirement plan in 2016, down from 39 percent in 2006. Coverage rates in New York City remain significantly below the national average of 37 percent. Declining savings levels among those who have accounts threaten New Yorkers with the risk of lower standards of living or poverty in retirement. The first section of this report describes the trends in workplace retirement plan coverage by employers at the local and national levels. The second section examines financial preparedness for retirement of households near retirement. The findings suggest that low coverage and the shift to 401(k)-type plans are jeopardizing the retirement security of working New Yorkers. Many New York City residents are likely to experience a dramatic drop in living standards as they age.