Retiring Stress-Free in New York: Preparation and Savings Tips

New York can be a very welcoming state in which to retire. There are friendly communities, rich amenities, cultural diversity, and excellent public transportation. Access to New York City can connect you with many opportunities and luxuries. On the downside, New York can be quite expensive to retire in due to the cost of living and tax rates. If you’re eyeing New York as the destination to hang your hat when your career is complete, you’ll want to know the best practices for a happy and healthy golden years.

Find the Right Retirement Plan

You should take advantage of a retirement plan in New York, especially if an employer offers one. Employers will typically match your contributions to the fund. Retirement plans are often tax deductible or contributed to pre-tax (depending on the plan) to reduce tax bills annually. The most common types of retirement plans are 401(k) or an IRA (individual retirement account). Traditional IRAs are tax-deductible and are then taxed when you withdraw in retirement, while Roth IRAs are contributed with after-tax money, so withdrawals are tax-free. 401(k) plans are typically only offered by employers, but they also have a traditional and Roth option. If you plan to be in a higher tax bracket at retirement, Roth options may be the better choice. If you want immediate tax deductions, then traditional may be preferable. Speak with a financial advisor; they’ll tailor recommendations based on your goals, income, and lifestyle.

Save as Early as Possible

The cost of living in New York is particularly high, especially when you factor in various tax rates. If you’re anywhere near New York City, the cost will rise even more. You’ll need to save as early as possible if you want to be comfortable during retirement. If you haven’t started a retirement plan or fund, you’ll want to get started immediately. Most experts recommend saving at least 10-15% of your annual income for retirement, but if you make more, it’s smarter to save more. There’s no such thing as saving too much as long as you can pay for daily living.

Set Retirement Goals

Knowing what you want to do can make planning your retirement much easier. Figure out where you’ll live and factor in the chance of needing more assistance or healthcare as you age, like in an assisted living community. Determine if you’ll do a lot of traveling or mostly stay in New York; renting or selling your home may be smarter if you travel often. If you plan on living luxuriously, such as dining out or golfing, you’ll want to save more than the average. If you are open to working through retirement, you may not need to save as much. Knowing what you’ll want to do in retirement can help you plan smarter and save more.

Evaluate Housing Options

When you retire, you may need more daily care. While many seniors thrive in their own homes, you may want to consider senior living or assisted living communities. If you go the route of independent or assisted living, you will want to vet and visit any community you’re considering thoroughly. In theory, all communities are dedicated to high-quality care for seniors, but staffing or security issues may cause certain communities to miss the mark. In New York City, you may find some of the worst-rated nursing homes due to large patient populations and inadequate staff to take care of them. When selecting any community, visit them in person. Meet their staff and talk to any residents if allowed—cycle through reviews, especially recent ones, on many different platforms. Evaluate any rating systems, especially official Medicare RUG scores for nursing homes. You don’t want to end up being mistreated or neglected as a senior.

Choose Senior Healthcare Specialists

Not all healthcare providers specialize in senior health. While all doctors are familiar with senior health, you’ll want a healthcare team that routinely and expertly cares for older adults specifically. It’s wise to find specialists who focus on senior patients. They will be the most equipped to care for your health as you age. Learn how to evaluate a doctor’s credentials and browse reviews to see if a practice might be a good fit. You can always switch doctors if necessary.

Delay Social Security

Social Security benefits are a valuable part of retirement funding, and all seniors should take advantage of them. However, the earlier you apply for Social Security benefits, the less you’ll get. The Social Security Administration will lower your payments by 30% if you apply for benefits at the earliest possible (age 62) in order to account for longer payment periods. If you wait until age 65 or later (depending on your birth year), you’ll get your full payments. In New York, with its higher cost of living, full Social Security payments may be the smartest choice.

New York Retirement Fund Taxes

Retirement funds are incredibly useful for retirees, but withdrawals are subject to New York’s regular income tax, which can range from 4% to 11% (with the exception of Roth plans). Taxed withdrawals will reduce your savings, so be sure to factor these tax rates into your retirement savings plans. You may want to consider a Roth plan if you do not want your withdrawals taxed during retirement. New York state and military pensions are not taxed, however.

New York Retirement Costs

Outside of rent, it’s estimated the average retiree will need at least $1,200 monthly to live without financial stress. Living in an assisted living community can cost a few thousand more a month. Make sure you factor in daily living costs outside of housing payments for more financial freedom in retirement.