If the federal government can’t get it done and you live in a state is slow to adopt, maybe your city will step up (what’s next, neighborhoods?).
New York City Mayor Bill de Blasio recently delivered his State of the City Address. Among the proliferation of payouts Hizzoner promised in city spending was his plan to provide “retirement security for all” in a city-sponsored retirement plan.
“Fewer than half of all working New Yorkers have access to a plan that can help them save for their retirement years and 40 percent of New Yorkers between the ages of 50-64 have less than $10,000 saved for retirement,” City Hall said in a statement. “These people are mostly lower-income and disproportionately female and people of color. This reality is neither acceptable nor sustainable for the future of this City.”
Adding that New Yorkers are working longer and harder and have “nothing to show for it at the end of the day,” de Blasio said that is why he is proposing to provide access to individual retirement accounts (IRAs) for all working New Yorkers.
Through the program, an employee who makes $50,850 per year (the median wage for a job in New York City) and invests 5 percent annually while earning an average net return of 4 percent would save $146,274 after thirty years of work—more than 10 times the current amount saved by 40 percent of near-retirement workers, the administration claims.
“Mayor de Blasio will work with the City Council to pass legislation in 2019 that requires all employers with at least five employees to either offer access to a retirement plan or auto-enroll their employees in to the City plan with a default contribution of the employees’ own earnings of 5 percent, which can then be increased or reduced by the employee,” it concluded.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.