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Guest Blog: Eight Reasons 'Work and Save' Will Help Marylanders

Piggy Bank Savings Female Half Filled
A woman's hand dropping a penny into a half filled piggy bank.
R Yasick
In early August, Maryland Governor Martin O’Malley appointed AARP Senior Legislative Representative Sarah Mysiewicz Gill to the Governor’s Task Force to Ensure Retirement Security for All Marylanders. (Read more about that announcement here.)

Chosen to represent AARP Maryland and our state’s retirees on this so-called "Work and Save" plan, Sarah will meet with other Task Force members throughout the remainder of this year and issue a report to Governor O’Malley in December 2014.  In the following special guest blog, Sarah highlights the benefits of Work and Save and how these public-private partnerships can help address Maryland’s retirement savings deficit.

Here's a sobering statistic: If things don’t change, nearly 50 percent of baby boomers won’t have the retirement income they need to meet their basic needs. Maryland is a leader in addressing this issue, and is considering offering Marylanders access to a "Work and Save" plan. This innovative concept would be similar to a 529 College Savings Plan, allowing folks to save for retirement at work.

Why do we need a Work and Save plan in Maryland? I’m glad you asked…

8 Simple Reasons why Work and Save will help Marylanders (and the Numbers to Back it All Up):

1. Americans—including Marylanders—aren’t saving enough for retirement.

The vast majority of Americans are unprepared for retirement. According to the National Institute on Retirement Security, the average household has only $3,000 in retirement savings. The worst part? These people are the fortunate ones. Forty-one percent of near-retiree households in Maryland have virtually no retirement savings at all.

2. Social Security was never meant to be the only source of retirement income.

Social Security provides a floor for retirement income, but it was never supposed to be the lone source of income for retirees. The average Social Security benefit in Maryland is about $1,290 per month.

3. Access to a way to save at work is huge problem in Maryland.

One of the main causes of the retirement savings deficit is the fact that 57 million Americans have no way to save at work. Because of this lack of access, only about 52 percent of Marylanders participate in a workplace retirement plan.

4. Workers save substantially more when given the chance.

When employees are given the opportunity to save via payroll deduction at work, they take advantage of it. In fact, just having access to a workplace retirement plan boosts employee savings rates by an impressive 1,300 percent!

Money savings

5. Small businesses want to offer their employees retirement savings plans.

Close to 80 percent of small businesses do not currently offer retirement savings plans to their employees. And yet, most entrepreneurs (82%) agree that employer-sponsored retirement plans attract high-quality employees.

6. Work and Save plans give Marylanders control over their retirement future.

These public-private partnerships allow private workers to save for retirement at work via payroll deduction, much like a 529 college savings plan. Employees can choose how and when to save for retirement, as the accounts are portable and follow workers when they switch jobs.

7. Work and Save plans benefit Maryland businesses without cost or liability risks.

Work and Save is an easy way for businesses to offer their employees a retirement fund, and gain a competitive edge in the marketplace. It provides real value without the added burden and expenses levied onto small business owners. Small businesses have testified in support of Work and Save in West Virginia, Oregon, Minnesota and Maryland. Legg Mason, a Baltimore-based asset management firm, testified earlier this year in support of Work and Save and has praised our Task Force.

8. Work and Save plans will reduce retiree dependence on Maryland government programs.

Last but certainly not least, increasing personal savings will help Marylanders be self-sufficient in retirement. Because Work and Save plans are intended to be self-sustaining and participant-funded, there will be no ongoing cost or risk for states.

Are you currently working, but do not have opportunities to save at work? Or, do you own a small business and currently offer employees an opportunity to save? We want to hear from you! Please contact AARP Maryland's Advocacy Director, Tammy Bresnahan, at or call 410-302-8451. Together, we can make a difference for retirement security here in Maryland.  


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