The baby boomer generation, 76 million strong, is proving itself to be a force to be reckoned with – a fact that is becoming painfully obvious to the state of New York.
Earlier this month, AARP New York hosted its "Boomtown" forum in Manhattan, focusing attention on survey results that show that many New Yorkers aged 50 and older plan to leave the city when they retire.
Boomers plan their own "Escape from New York"
The AARP noted that, of the 1,400 respondents surveyed, 53% said that they plan to leave New York City when they retire. Of those who are certain of their retirement plans, 64% report that they will retire elsewhere.
These retirees will be sorely missed. The Association estimates that resident boomers spent more than $70 billion in 2011, an amount that would easily top $100 billion if they chose to stay in NYC.
Even worse, the segment most likely to leave is the middle-class boomer. These retirees, unlike the richest cohort, feel priced out of the city – and, unlike lower-income boomers, can afford to move to another locale.
Why the exodus?
To be fair, many boomers are leaving U.S. cities as they retire to areas where life is less harried. In addition to NYC, Chicago, San Francisco and Los Angeles are also experiencing boomer flight. The AARP's focus on NYC and its 50-and-over population, however, brought out some specific reasons for the exodus from the Big Apple.
Affordability is a big issue, with 54% calling the lack of affordable housing a "major problem". In addition, 62% feel that NYC's economy is in poor shape, and 35% believe that their own financial profile has deteriorated from four years ago. Older residents worry about safety, noting that being a pedestrian in Manhattan is downright dangerous. Working boomers complain about age-related discrimination in the workplace, with 48% saying that they have either witnessed or been the target of such behavior in the past.
Though not mentioned in AARP's survey, high taxes likely play a role in the decision to leave the city, as well. Tax experts say that city, state, and local taxes combine to put a cumulative annual tax burden of almost 13% on those who live there – the highest in the country.
Long Island: selling out
Boomers on Long Island are moving on, too. Small business owners are plentiful here, with operations with fewer than 100 employees making up nearly all of the 95,399 businesses in Long Island's two suburban counties of Nassau and Suffolk. As boomers prepare to enter retirement over the next decade or two, many analysts are concerned about the fate of these businesses, fearing sales that will move these employers out of the area.
Can New York stem the tide of emigrating retirees? The city has been working with the AARP to overcome the complaints regarding affordability, safety, and workplace equity, but much needs to be done. Unfortunately for the economy of New York City and its environs, boomers are not inclined to wait around for change.
How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.