Retiring: NYC style

New York City is the finance capital of our country.  Except for the cut off the top that Washington takes in taxes and payoffs to politicians, it is where the money is at.

So you would expect that the people of New York City would be a little better off than the rest of us.  Understandably, not everyone in the city is a financier, but top Administrative Assistants make $70,000 a year, and much of the work force is unionized.

Well I lived in New York City for a couple of years when I was a youngster.  And just as with much of the country, there are two New York Cities:  The financial sector and the rest of the place.

New Yorkers Face Downward Mobility

Elizabeth Ody, Bloomberg 26 January 2012 (hat tip: NC)

About one third of New York City residents nearing retirement age won’t be able to quit or will have to rely entirely on Social Security because they have less than $10,000 in savings, according to a study released today.

“It’s going to mean a generation of retirees will do worse than their parents and grandparents,” Teresa Ghilarducci, the [Center for Economic Policy Analysis] director, said in a telephone interview. “This means a lot more downward mobility.”

About 36 percent of households near retirement had less than $10,000 in liquid assets and about 19 percent had $10,000 to $99,999, according to the report. The median net worth of New York households where the head is nearing retirement, defined as age 55 to 64, was $442,450 including home equity, for married couples. It was $46,000 for single people.

For those households with less than $10,000, “that gives you probably a movie every couple of months,” said Ghilarducci.

The numbers are a little hard to parse out.  The $442 K in assets for the mid-point (median) sounds pretty good.  But if you notice the much lower $42,000 for the single people (who are more likely to be apartment dwellers) and you release that very little of that is likely to be in cash.  $500,000 gets you a little house out in Queens: maybe.

In an ideal world, they could sell their houses and move to Apex or Wake Forest, North Carolina and buy a nice little house in a safe neighborhood for $180,000.  Many people do.

But unless the dollar gets to the point where a loaf of bread costs $30, how many people are going to buy the little houses in Queens for ½ million dollars?  Certainly New York City is a vibrant and exciting place, but that is an awful lot of houses that would need to be sold.

To summarize:  the bulk American citizens living in the city that absorbed the greatest amount of money from the finance boom of the last decade are as in poor economic shape –maybe even a tad bit worse given the cost of living– than the rest of the country.