Long Island workers approaching retirement face a complex set of choices, made all the more difficult by the region’s high cost of living — and they’re feeling the stress.
Company-paid pensions, long a bedrock of stable retirement income, have become a rarity, replaced in large part by market-dependent savings and investment accounts such as IRAs and 401(k)s. At the same time, longer lifespans mean retirees must prepare for the possibility of living for decades without steady income from work.
Islanders in their 60s said there’s much to worry about when it comes to retirement, including concerns about the strength of their nest egg, the price of health care and long-term care, inflation, where the stock market is headed, and if it will be possible to live on Long Island in retirement.
There’s also the question of whether it’s better to take smaller Social Security payments early, at age 62; hold out for bigger payments at age 67 — full retirement age for those born in or after 1960; or wait for maximum payments at 70 but risk not living long enough to make that choice pay off.
“You really have to start planning for it years in advance,” said Susan Dennehy, 61, a nurse living in Smithtown, who said the process of researching her and her husband’s options for retirement has been overwhelming.
“It’s not very easy to get information, and when you do get it, it’s sort of mind-boggling. There are so many rules,” said Dennehy, who’s hoping to retire in a few years. “Whatever decisions you make, you have to make sure they’re the right decisions. You can’t change it.”
Even with the bureaucratic and financial maze that often confronts would-be retirees, the number of retired Americans has outpaced projections since the COVID pandemic.
While the pandemic led to a large spike in retirements — called the Great Retirement Boom — in recent months the number of new retirees has seen another surge, reaching a post-pandemic record in December. There are now around 2.7 million more retirees than predicted, according to economic forecasts from the Federal Reserve Bank of St. Louis.
Despite that jump, fewer than half of working-age Americans have any retirement savings, according to 2020 U.S. Census Bureau data. A July 2023 report by the Transamerica Center for Retirement Studies found that nearly half of Baby Boomers and around 40% of Generation X workers expect to retire after 70, or not at all.
Mario Melito, 59, a freelance architect from Huntington Station, is with them.
“My reality is … I’m probably going to be working the rest of my life,” he said. “Social Security is not enough to cover my mortgage or even a reasonable rent on Long Island. Medical expenses are high. Utility bills are high. I have to work.”
Working longer is indeed more common on Long Island than in the state or the nation. Nearly a quarter of Nassau and Suffolk residents 65 and older — 23.6% — are still in the labor force, according to Census data. That compares with 19.7% in the state and 18.7% nationally.
George Mahler of Lynbrook is still working at 70, running an at-home window dressing business.
“For the first 25 years or so of my career, I operated a family-owned retail business. It didn’t do as well for me as it did for my parents, and I wasn’t able to save a nickel,” he said. “If I were to stop working, I’d have to be on a tighter budget. You don’t know how long you’re going to live or if your health is not going to hold up. You never feel like you have enough.”
“People are not facing their parents’ and grandparents’ retirement situations,” said Teresa Ghilarducci, economist and policy analysis professor at the New School for Social Research in New York City.
Ghilarducci, who researches the economics of retirement, said the theory that older Americans can simply work longer doesn’t hold up.
“We’re finding the stress of the unknown toward the end of your life is causing cardiovascular disease,” said Ghilarducci, author of a new book “Work, Retire, Repeat,” set to be released next month. “Retirement age has increased, but people’s ability to work longer hasn’t increased as fast.”
Over the last 40 years, with the decline of private-sector pensions, the country has moved “way over on the spectrum of do-it-yourself retirement, of self-reliance,” Ghilarducci said, putting Americans in the position of having to understand the complexities of saving and investing for retirement.
“People in other countries don’t have to spend all this brain power and money for financial advisers because they have very simple and safe places to save for retirement,” she said
Countries like Denmark, Finland and the Netherlands, Ghilarducci said, have better…
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