Baltimore City residents are at high risk of being less financially secure in retirement, according to a nationwide study on retirement standards released Thursday.
Among other things, the study looked at cost of living, home ownership, access to pension funds and household income in Baltimore to determine whether residents could maintain their standard of living when they retire.
Americans for Secure Retirement, based in Washington, D.C., conducted the study, which is titled “The Retirement Readiness Assessment: Are You Prepared?.” It looked at 30 economic indicators for retirement risk in 250 counties across the United States.
The counties were labeled in descending order as very high risk, high risk, elevated risk, moderate risk, less risk and nominal risk. Baltimore City was evaluated along with counties because of its status as a city not within a county.
“The high level of retirement risk in Baltimore City is due to a combination of factors such as lack of access to pension, low income and lack of assets that can be converted into income, which makes it difficult for individuals in the region to extend their resources over the increasingly long span of retirement years,” said William Orzechowski, president of Orzechowski & Walker, the consulting firm that conducted the study.
John Stewart, executive director of the Baltimore City Commission on Aging and Retirement, said he agreed with most of the study?s findings. He added that 18 percent of the city?s seniors live below the poverty level.
But Baltimore City has economic trends in its favor that help mitigate some financial concerns for retirees, Orzechowski said.
For example, of the 250 communities studied, Baltimore has the highest rate of vacant property for sale, putting “downward pressure on housing prices that are often an important asset for retirees,” he said.
Working against residents, however, is the city?s low median household income of $27,580 which placed it close to last ? 243 out of 250 ? among communities.
“Level of income is a critical element in defining whether people have the resources to handle their retirement needs without facing significant declines in standards of living,” Orzechowski said.
Another factor working against Baltimore residents is the city?s education level, the study said.
“Only 6.7 percent of the [Baltimore] population has a bachelor?s degree, which correlates with lower earnings and higher retirement risk,” Orzechowski said.
Nationwide, 52 percent of residents in the 250 counties face high retirement risks.
RETIREE RISK
» Howard County residents are at less risk of insecurity in retirement, the study said.
» Social Security only replaces about 42 percent of pre-retirement income
» 88 million workers either do not have access to, or participate in, a employer-sponsored retirement plan.
