Consumer Alert: New Yorkers are among Americans least ready for retirement. Here’s what you can do about it
ROCHESTER, N.Y. – We’re number two! That’s the chant we, as New Yorkers, can make following the release analysis ranking the states with the least savings. The personal finance site, Dollar Geek, analyzed public data and created two lists, the top ten states with the most savings and another top ten with the least. New Yorkers are saving the least, second only to Hawaii. The state whose residents have the most savings is Kansas.
Here in New York, the recommended retirement savings adds up to almost $1.3 million. Jarrett Felton, News10NBC personal finance expert and Managing Director of Invessent, says to think about how you want to retire. Do you want to kick back and do nothing? Do you hope to travel? Do you want to eat out more? Where are you going to live? Then look at how much you’re making now, and how much you’re going to need annually when you’re no longer getting a paycheck. Felton says that your annual retirement salary needs to be 3% of the amount you’ve saved.
“Think about it,” said Felton. “If we’re pulling out 3%, your investment should be giving you more. Otherwise, we’re taking from our principle and not from our interest and growth and gains. So the numbers can get pretty staggering. If we have $2 million and we’re taking at 3%, that’s a $60,000 salary. And you’re trying to pull out about 3% to be safe to be sure you don’t run out of money. You need $2 million dollars saved.”
You may be thinking, “I’ll have paid off my house, so I won’t need $60,000 a year.” So, if you plan to draw $30,000 a year, you’ll still need to have saved a million bucks. There are some changes as part of the Omnibus Bill passed in December to help you reach your goals. The measure is called Secure 2.0
· The age that you’re required to start drawing from your retirement savings increases this year to age 73. That’s good if you haven’t saved enough and need time to catch up.
· In 2025, workers aged 60 to 63 can sock away an extra $10,000 a year in the company 401k (or 50% more than the regular catch-up amount) That’s up from $6,500.
· And part-time employees who work at least 500 hours a year are eligible to participate in the company’s 401k after two years.
I wrote two stories earlier this month about changes in the budget bill designed to help young workers save for retirement. One involved the need to begin saving while in college and the other concerned changes in Secure 2.0 that make it possible to pay off student loans while saving for retirement.
Listen, when I was a kid, my parents poured all that they had into me. and said I was their retirement plan. My dad loves living with us, and I’d like to think they’ve invested wisely. But while we love our kids, not everyone wants to spend their golden years living with them. Tomorrow is today. Save now.