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More than 1 million Maryland residents have zero retirement savings, report says

More than 1 million working Maryland residents have virtually no retirement savings, contributing to a looming public calamity that report released Tuesday called a "silver tsunami."

"We have a disaster -- a crisis -- facing us," said former Lt. Gov. Kathleen Kennedy Townsend, who chaired the state task force that issued the report.

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Authors of the state report described a wave of problems as those residents reach retirement age without the resources to support themselves, forcing families to take in older members and the state to step in to help.

"If Maryland doesn't act now, Maryland taxpayers will face higher costs for decades to come, as retirees are forced to turn to state assistance instead of living on their own savings," the report said.

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The report said more than a third of people expected to retire within 10 years have saved less than $10,000, and 40 percent of families within a decade of retirement have no retirement plan. Fears about being unprepared for retirement is the top economic concern of Americans.

The number of small businesses that offer retirement plans to employees, meanwhile, has dropped from two-thirds 15 years ago to 57 percent today, the report said.

The bipartisan task force, convened by former Gov. Martin O'Malley, a Democrat, during his final years in office, did not offer a specific way the state should address the problem of lackluster private retirement savings.

But its release Tuesday coincided with a hearing on a bill that would require small businesses to give workers the option to deduct retirement savings from their paychecks. It would also create a state non-profit retirement program for the public, which would work as a 401k-type program for any worker to invest their own savings.

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The report said other states have already passed programs that make it easier to save. Illinois, for example, passed a law requiring small businesses to automatically enroll in a state program.

Proponents of a state-sponsored system in Maryland said residents lose millions in potential retirement savings each year the state waits to create a way to make it easy and affordable to save.

Republican Gov. Larry Hogan has not offered an opinion on the bill. Its supporters said they plan to pitch it as a way to save taxpayers money later by making it easy for residents to save for their own retirement now.

"We're not going to be, as a society, letting people as they once were, eating cat food and going cold and doing that sort of thing," said Democratic Sen. Rich Madaleno. "This about letting people take personal responsibility while we still have a chance."

ecox@baltsun.com

twitter.com/ErinatTheSun

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