How large a nest egg do you need to fund a secure, satisfied post-career life in New York and be confident that your assets will outlast your pulse? What is your New York Number? It’s an annoying question, fraught with the things you don’t want to think about: destitution, deterioration, death. It’s therefore a question that’s usually asked at night, almost always silently. How you frame the question depends on your age and temperament.
When you’re in your twenties, sliding from job to job, commuting from Philly because you can’t afford Hoboken, the question is easily dismissed: Old age? Chill. By your thirties, the question grows louder. Unless some miracle occurs—reclusive uncle bequeaths oil ranch—you’re staring at 30 more years of dragging your bones to the office, hoping the bottom doesn’t fall out of your 401(k). A voice inside wants to know: Fuck-you money—how much is enough? In your forties, you put it more decorously: What will it take to get off the goddamn treadmill? By now, the query has elbowed its way from the back of your cranium to the front. It’s time to get serious about—why is it so hard to spit out?—retirement.
At 50, the New York Number is not just messing with your head; it has set the demons dancing. What if housing prices crack and, with them, your fragile nest egg? Are your loved ones adequately protected? What if you wind up in some assisted-living asylum, with no one to wipe the drool?
A lightbulb flickers. What you need is a good, solid financial plan that takes you all the way out to age 100. No, bad idea. Thorough planning takes time, and now you’re panicky. What you need is a worksheet, something that leads to an answer now. Be patient—there’s a quick-and-dirty formula at the end of this story. But before you grab a pencil, you need to think about some other things—qualitative, not quantitative. You need to think about what kind of Number chaser you really are. There are, after all, just four types:
(1) If you’re like most people, you’re a procrastinator. You know you need a comprehensive plan but don’t do anything about it. And it’s not just you: Surveys show that at least one out of three millionaires has nothing like a financial road map to his remaining decades. Why this sloth? Planning is arduous, a pain in the New York butt: You need a shoe box into which you stuff every scrap of evidence pertaining to your financial life, present and future: checking, savings, and retirement-fund statements; grotty little ATM slips; current accountings of your mortgage and credit-card debt; wills and insurance policies; any trusts that may apply; federal, state, and local tax returns, to list a few. The requisite papers are blowing like tumbleweed under your sleigh bed. Anyone got a stick with a nail at the end? Once they’re collected, you have to lug them to a financial planner whom you really don’t know or may not trust.
(2) But let’s say that procrastination isn’t your problem. It may be that you’re a natural-born plucker, one who simply plucks a New York Number out of thin air. “Hmm, $10 mill—that’s what it would take to tell ’em to shove it.” For pluckers, a good, solid New York Number is little more than a blind guess, a wild-assed stab.
(3) Or maybe you’re a plotter, a conscientious soul who stays up late harvesting and crunching data with the help of an online calculator. You study life expectancy (getting longer); projected rates of return (getting harder); projected health-care costs (getting surreal). Compulsively, you try to quantify everything, even your headaches, which are 24/7.
(4) If you’re none of the above, you’re a prober, a person who plumbs the depths of your psyche, sensing that the Number isn’t just about money. The future calls for simplification and enlightened downsizing, a retirement that’s small but beautiful. Yet a bothersome question hovers above your yoga mat: What if I get fed up ordering no-iron travel clothes from a catalogue? Besides, ashtanga doesn’t pay the rent.
There can be, of course, no single New York Number, not in a place where, shamefully and intractably, disparities of income and wealth are as great as anywhere in the U.S. One New Yorker’s retirement lifeline is another’s long weekend. The top fifth of Manhattan’s earners now make 52 times more than the lowest fifth—$365,826, compared with $7,047. The Bronx has a poverty rate of 30.6 percent, outranked only by three Texas border counties. In East Harlem, median income is $9,320 a year. Sixty blocks due south, it’s $188,697. So, for some, the New York Number is indeed fuck-you money: You can walk away while still a pup! For others, the New York Number is food, rent, and medicine money: How much do you need so you won’t starve, freeze, or suffer a long, lonely decline? In between these extremes, there are your friends and mine who, by every mean and median, are better off than most and whose retirement dreams vary widely. These are people on the cusp. Maybe they’ll have enough money, maybe not. Maybe they know what they’re looking for, maybe not. I’ve talked to a lot of people like this, and they sound like these three:
“My dream? A small farm on some land upstate. I’m worth about $500,000 now. My mother has a couple million bucks, but it’ll be split three ways. So—who knows?”
“We’re in our fifties. My husband is an officer in the Fire Department and will retire soon with a good pension and health insurance. He also has a job on the side, which pays $15,000 a year. He’ll probably open a repair shop.”
“Both of us have ten years to go. We try to save at least $7,000 a year. We’re not counting on Social Security. My father-in-law has a young second wife. We’re not counting on him, either.”