WASHINGTON – In case you missed it, U.S. Senators Chris Coons (D-Del.) and Amy Klobuchar (D-Minn.) published an op-ed in CNN Business about the Saving for the Future Act, landmark legislation they introduced to address the looming retirement crisis and help ensure that Americans are able to afford emergency expenses.
CNN Business: Coons and Klobuchar: Most Americans can't save for retirement. We want to fix that.
By Chris Coons and Amy Klobuchar
By some measures, it's true that the American economy appears to be in good shape, but look a little closer and you'll find that tens of millions of middle-class Americans who are working full time are still just barely getting by.
What do we mean by barely? Four in 10 American adults do not have cash savings to meet a $400 emergency expense, and unfortunately, $400 emergency expenses are pretty common. So, for far too many Americans, a broken bone, a minor car repair or even school supplies could mean that all the bills can't be paid at the end of the month.
For these families, saving for retirement is nearly impossible, and the numbers confirm it: Among families in the bottom half of the income scale, only about 40% hold any kind of a retirement plan.
That's a crisis waiting to happen, and it's why we're introducing an ambitious but achievable proposal to ensure that all Americans are able to prepare for retirement and cover emergency costs.
Our legislation, the Saving for the Future Act, would guarantee that if you're working full time, in addition to your pay, you would receive a savings contribution of at least 50 cents per hour worked, or a little over $1,000 per year. The amount would rise to 60 cents after two years and then keep pace with wage growth after that.
If a worker sticks with their own automatic contributions, which start at just 4% of pay, their savings over the course of a career would grow to more than $600,000 by retirement, according to the think tank Third Way.
To read the full column, click here.