Across the country, the gap between what Americans currently have in retirement savings and what they will need is a whopping $6.6 trillion. And for New Yorkers, the future looks especially bleak: more than half of our workers are projected to be near poverty or in poverty when they retire and 40 percent of New Yorkers have less than $10,000 saved for retirement.
To put that number into perspective, to simply live at the poverty line for a 15-year retirement, a New Yorker would need to have roughly $215,000 in savings. That's simply to live at the poverty line -- that means no traveling, no eating at restaurants, and no buying presents for the grandkids. Middle-class New Yorkers are saving less and less for retirement, while the cost of living is quickly rising.
This is not necessarily due to a lack of interest in saving for retirement, but rather the fact that over half of working New Yorkers do not have access to an employer-sponsored retirement savings plan - the most common and effective way to save for the future.
And this problem is especially pronounced among minorities and women who are facing a life of poverty and destitution. Only 38 percent of black employees, 30 percent of Latino employees, and 26 percent of Asian employees have access to a retirement plan through their employer, compared to 53 percent of white employees. Two-thirds or more of African American and Latino households have no retirement savings at all. And women have just two-thirds the savings as men. Every hard working New Yorker, regardless of their income, race, or gender deserves an equal shot at attaining retirement security.
And the problem is only going to affect more people, as the senior population projected to increase by 47 percent by 2030. That's why I made it a priority to do more to protect and prepare all New Yorkers for a secure future.
Last June, my office released a report analyzing the challenges New Yorkers - especially women and people of color - face in saving for the future. In that report, we initially recommended that the City create a retirement savings program for all New Yorkers and then introduced a bill into the City Council to create a commission that would examine the feasibility of such a City-wide plan. And in our efforts to better understand the range of issues and obstacles that New Yorkers face in planning for their future, we also hosted town hall meetings in neighborhoods throughout the five boroughs to get firsthand accounts of the challenges.
After nearly two years of analyzing this issue and talking to hundreds of New Yorkers about their fears,, my office, in partnership with Mayor Bill de Blasio, Comptroller Scott Stringer and Council Speaker Melissa Mark-Viverito, announced a groundbreaking program to offer retirement savings plans for all New Yorkers. We are creating, through legislation that I will introduce in New York City Council, an infrastructure for New Yorkers to save for retirement and prepare for the future.
The program is simple: it will require businesses with ten or more employees to establish a retirement account for all employees that they can contribute to or opt out of. The plan will pose no cost to the business, no cost to the City, and no cost to taxpayers. Savings accounts will be comprised of individual employees' savings only, that will easily withdrawn through payroll deductions. It will also reduce the arduous steps and exorbitant fees typically involved in creating a retirement account.
A recent New York Times article estimated the the average American household with a 401(k) will pay $155,000 over their lifetime in administrative fees for their savings accounts. As a city-based program, our proposed plan will have the leverage to bypass some of these fees and the plan would pool accounts together to further mitigate costs too many can't afford.
Retirement shouldn't be making the choice between buying much-needed medication or putting food on the table; making the choice between heating an apartment in the cold winter months or paying rent; making the choice between paying a phone bill or seeing a doctor. This will be game changing legislation for the 3.5 million private-sector employees in the City, who will be given the opportunity to save for their future and no longer have to sacrifice basic life necessities.
Because of our bold action, millions of seniors and future generations won't be forced to fear the future. No person should live in poverty after a life of hard work. A comfortable retirement should not only be a luxury for the wealthy, but a reality for every New Yorker. We all deserve to live our golden years in dignity and because of this retirement plan, millions of New Yorkers will finally have a future they can look forward to.