NYC African American Baby Boomers and Gen Xers Financially Stressed, Reveals AARP Survey

RetireToday at Red Rooster restaurant in Harlem, NY, an AARP State delegation met with members of the press, financial experts, entrepreneurs, Harlem business owners, and officials from Governor Andrew Cuomo?s office to release troubling findings from a recent survey that revealed that African American Baby Boomers (born between 1946 and 1964) and Gen Xers (born between 1961 and 1979) are worried about the same financial issue: retirement security ? or the lack thereof.

The survey, entitled, ?High Anxiety: New York City African American Gen X and Boomers Struggle with Stress, Savings and Security? is a sampling of research conducted via telephone of African American voters aged 35-69.

?The first Generation Xer turned 50 this year, which is the age that AARP membership begins. We wanted to understand the wants and needs of our new members, so we drilled down into metro areas and key multicultural markets in New York, which is a key constituency in NY. When we started, we knew there would be some surprising, “A-Ha” findings but we did not expect the phrase ?high anxiety,?? Beth Finkel, State Director of AARP in New York State, told in an exclusive interview.

She continues, ?What really popped for us was that 74% of African Americans are concerned about affordable housing in the future. That was the highest number of every segment we interviewed. They were also concerned about student loans for themselves or their children. We know that education is really important to African Americans and they are committed to making that happen for their kids – even if they go into debt doing so.?

According to Finkel, 52 percent of all New Yorkers who work for private industry don?t have a pension plan or a 401-k plan.?

?Unless your savings is automatically deducted, you are less likely to save. But if it is deducted automatically, you are 15 times more likely to save for retirement,? she notes.

Other findings indicate that:

???? 68% of African American Gen Xers and 61% of African American Boomers worry about not saving enough to live comfortably in retirement.
???? 73% of African American Gen Xers are either current or expected future borrowers of student debt; 61% of borrowers say these loans make it even harder to save for retirement.
???? 74% of African American voters in both generations worry that they will not be able to afford their monthly cost of housing in the coming years.
29% of African American Gen X and 21% of Boomer voters do not expect to ever retire.

Aside from the private sector employees, there?s a great number of African American New Yorkers who work for small companies and in many cases these companies just cannot afford to provide pension or 401k plans due to the administrative costs and the fiduciary responsibility.

Says Finkel, ?These employees will be retiring with no savings, which will be a colossal, perilous time for New Yorkers. They miss out on the power of compounding when they don?t have 401-k plans.???

To this end, AARP is pushing for the government and the private sector to agree to a state-facilitated savings program.

?We want Governor Cuomo to introduce a ?work and save? model, savings program. The good news is that President Obama told the federal Department of Labor at a recent conference for the aging to look at the rules, allow states to take on the responsibility of such a program, and overcome any barriers surrounding it. And voters we spoke to have said that they would support the plan, too. We?re hoping states will take it on in 2016,? she says.

The cost to small businesses would only be $10 for each employee. Nikoa Evans-Hendricks, executive director and founding member of Harlem Park to Park, could relate to the challenges small business owners face in trying to provide retirement packages to their employees. ?As a small business owner, sometimes you incur debt just trying to get your business open. There are loans…maybe you might put your house up for collateral?you are often robbing Peter to pay Paul in order to stay afloat and have capital reserves. 2008 was a scary time. It?s important to have reserves which is why it?s difficult to offer pension and 401k plans to employees,? she shared during the panel discussion portion of the event.?????????

Finkel?s colleague, Reggie Nance, AARP Associate State Director of Multicultural Outreach, weighed in and said to, ?In the African American community, we talk about ?the generational curse? whether that means a cycle of poverty or that we don?t own our own businesses or that we have no savings to pass down?and when I think about that, I wonder which generation will break the cycle. So, while this survey provides great, compelling research, there must be action and viable solutions. We want people to be able to retire in a way that honors and dignifies the way they lived.?

?It is alarming to see that African American Baby Boomers and Generation Xers have the same financial concerns. And Gen Xers have even deeper concerns, but this comprehensive study shows that there is hope,? he adds.?

In addition to student loan debt and affordable housing for the future, the segments sampled were also worried about not saving enough (Boomers, 39%, Gen X, 50%) and not having money in times of unexpected emergencies (Boomers, 27%, Gen X, 30%). Worry over not being able to pay utility bills, which are highest in New York City compared to any other city in the United States, also made the list of findings.?? ?

Caring for elders also came up for discussion, although according to Finkel, help is on the way. She shared that Governor Cuomo has just signed ?The Care Act? into enrollment, which will offer support to those struggling to care for parents or grandparents.????

During his remarks, Rawle Andrews, AARP?s Regional Vice President, said, ?Politics is about who gets what, when, where and how much. The stats of the report are startling. The study is real and the numbers are not pretty. Utility bills, caring for the elderly at home, student loan debt and the smartphone that you just had to have?I think the study says that for far too long, too many of us have been trying to just get to the next day or just get through October. And then we say that if we can just get through November…the reality is that there are not enough? arrangements made for the long-term.?