Maryland Retirement FAQ: Your Guide to a Fulfilling Retirement in the Old Line State

Maryland Retirement FAQ – Quick Links

• 1. What is the retirement age in Maryland?
• 2. Will Maryland state retirees receive COLA?
• 3. What is Maryland state retirement pickup?
• 4. Does Maryland tax retirement income?
• 5. What are the rules for Maryland state pension?
• 6. Is Maryland a good state to retire in?
• 7. Does Maryland tax federal retirement pensions?
• 8. How does the Maryland retirement tax elimination act work?
• 9. What does it cost to retire in Maryland?
• 10. What are the benefits of retiring in Maryland?
• 11. Where is the best place to retire in Maryland?
• 12. How much do you need to retire comfortably in Maryland?
• 13. What are the property taxes like in Maryland for retirees?
• 14. Are there specific tax benefits for retirees in Maryland?
• 15. What is the typical cost of living for retirees in Maryland compared to other states?
• 16. What kind of outdoor activities are popular among retirees in Maryland?
• 17. How is the healthcare system for seniors in Maryland?
• 18. Are there many senior centers or wellness programs available for retirees in Maryland?
• 19. What's the difference between a 55+ community and a CCRC in Maryland?
• 20. How can I find a retirement community that fits my needs in Maryland?
• 21. Are there volunteer opportunities for retirees in Maryland?

Maryland, with its rich history, diverse landscapes, and vibrant culture, is an attractive destination for many retirees. However, navigating the state's retirement laws and financial implications can be daunting. This FAQ addresses common questions to help you plan your Maryland retirement.

1. What is the retirement age in Maryland?

Maryland doesn't have a mandatory retirement age for most professions. However, state employees and public safety personnel may have specific retirement age requirements based on their pension plans. While the standard retirement age under the state's system is 65, you have the option to retire earlier, similar to Social Security. However, choosing early retirement will result in a decrease in your state pension benefits.

2. Will Maryland state retirees receive COLA?

Yes, Maryland state retirees receive a Cost-of-Living Adjustment (COLA) annually. The COLA is designed to help maintain the purchasing power of pensions in the face of inflation. The 2024 COLA increase for Maryland state retirees is 4.22%.

3. What is Maryland state retirement pickup?

Maryland state retirement pickup is a program where the state pays a portion of an employee's mandatory retirement contributions. This benefit increases the employee's take-home pay and enhances their retirement savings.

4. Does Maryland tax retirement income?

Maryland does tax retirement income, but there are certain exclusions and deductions available. Social Security benefits are not taxed, and a portion of pension and retirement annuity income may be exempt for those aged 65 or older or totally disabled. Learn more about taxes in Maryland for retirees.

5. What are the rules for Maryland state pension?

The rules for Maryland state pensions vary depending on the specific pension plan and the employee's years of service and salary history. Details can be found on the Maryland State Retirement and Pension System (MSRPS) website.

6. Is Maryland a good state to retire in?

Maryland can be a good state to retire in, offering diverse living options, rich cultural attractions, access to quality healthcare, and proximity to major cities like Washington, D.C. However, the cost of living can be high in some areas. The key is to determine if the benefits of living in the state make the cost worth it (and if you’re already living in or around Maryland, the cost of living won’t impact you in the same way as moving from a lower cost of living location).

7. Does Maryland tax federal retirement pensions?

Maryland does not tax federal retirement pensions, including military pensions. This makes Maryland an appealing option for federal retirees.

8. How does the Maryland retirement tax elimination act work?

The Maryland Retirement Tax Elimination Act gradually phases out state income taxes on retirement income. This act benefits retirees by reducing their tax burden and increasing their disposable income. A state income tax credit provides savings by reducing your tax bill, but it won't result in a refund if it exceeds the amount owed.

9. What does it cost to retire in Maryland?

The cost of retiring in Maryland varies depending on location, lifestyle, and housing choices. Some areas, particularly around major cities, can be expensive, while others offer more affordable options.

10. What are the benefits of retiring in Maryland?

Maryland offers a variety of benefits for retirees, including:

• Diverse living options: From bustling cities to charming small towns and scenic coastal areas.
• Rich history and culture: World-class museums, historical sites, and cultural events.
• Proximity to Washington, D.C.: Easy access to national landmarks, museums, and government services.
• Quality healthcare: Renowned medical centers and hospitals.
• Senior-friendly communities: Many active adult communities and retirement communities catering to various needs and budgets.

11. Where is the best place to retire in Maryland?

The best place to retire in Maryland depends on your personal preferences. Some popular retirement destinations include:

• Annapolis: The state capital, known for its historic charm and waterfront location.
• Ocean City: A vibrant beach town with a lively boardwalk and entertainment options.
• Chestertown: A quaint locale with small-town charm and classic architecture.
• Easton: A picturesque town on the Eastern Shore with a relaxed pace of life.
• Frederick: A historic city with a thriving arts scene and proximity to outdoor recreation.
• Salisbury: The largest city on the Eastern Shore, offering a variety of amenities and cultural attractions.

12. How much do you need to retire comfortably in Maryland?

This answer depends on several different factors. Click here to learn more.

13. What are the property taxes like in Maryland for retirees?

Maryland property taxes vary significantly by county. While some areas, particularly around major metropolitan centers, can have higher rates, the state does offer a Homestead Property Tax Credit that can help limit assessment increases for homeowners. It’s advisable to research specific county tax rates for the areas you are considering. 

14. Are there specific tax benefits for retirees in Maryland?

Yes, Maryland offers a significant "retirement income subtraction modification" for qualifying individuals aged 65 or older, or those who are totally disabled. This allows a portion of eligible retirement income (pensions, annuities, 401(k)s, IRAs) to be subtracted from state taxable income, subject to certain income limitations. Social Security benefits are entirely exempt from state income tax. Learn more on the Maryland Comptroller's page on retirement income exclusions.

15. What is the typical cost of living for retirees in Maryland compared to other states?

Maryland's cost of living is generally higher than the national average, especially in housing and transportation, particularly near the D.C. and Baltimore metropolitan areas. However, some areas on the Eastern Shore or in Western Maryland offer a more moderate cost of living. It's often compared to its neighboring states, Virginia and Pennsylvania, with Maryland typically being more expensive than Pennsylvania but comparable to parts of Virginia. Learn more about comparing cost of living between these three states.

16. What kind of outdoor activities are popular among retirees in Maryland?

Maryland's diverse landscape offers abundant outdoor activities. Popular choices include kayaking and boating on the Chesapeake Bay and its tributaries, hiking and biking on numerous state park trails (like Patapsco Valley State Park or the B&A Trail), gardening, birdwatching, and golfing. The state also boasts beautiful beaches like Ocean City and Assateague Island. Read about hobby ideas for Maryland retirees.

17. How is the healthcare system for seniors in Maryland?

Maryland is known for its high-quality healthcare system, including world-renowned institutions like Johns Hopkins Medicine and the University of Maryland Medical System in Baltimore, as well as excellent hospitals throughout the state. Access to specialized care and a good number of physicians per capita makes it a strong choice for healthcare needs in retirement. Learn more at the Maryland Department of Health.

18. Are there many senior centers or wellness programs available for retirees in Maryland?

Absolutely. Maryland has numerous senior centers across its counties, offering a wide array of programs including fitness classes (yoga, tai chi, water aerobics), educational workshops, social clubs, arts and crafts, and nutritional services. Many YMCAs and community recreation centers also offer programs specifically for seniors. Learn more at the Maryland Department of Aging. 

19. What's the difference between a 55+ community and a CCRC in Maryland?

A 55+ community is an age-restricted neighborhood, offering home purchases (or sometimes rentals), with some amenities and social opportunities provided by an HOA. A Continuing Care Retirement Community (CCRC), such as those operated by Acts Retirement-Life Communities, offers more amenities and social opportunities in a gated community with a full continuum of care, from independent living to assisted living and skilled nursing, all on one campus. This provides residents with guaranteed access to higher levels of care if their needs change, often at predictable costs. Learn more in the article the Pros and Cons of 55+ Communities vs. Aging-in-Place.

20. How can I find a retirement community that fits my needs in Maryland?

Begin by researching communities online, attending virtual or in-person tours, and speaking with residents. Consider factors like location, amenities, services offered, financial structure, and the level of care available (especially if you're looking for a CCRC). Consulting with a senior living advisor can also be helpful. You are welcome to explore the Acts Retirement-Life Communities in Maryland.

21. Are there volunteer opportunities for retirees in Maryland?

Yes, Maryland offers a wealth of volunteer opportunities for seniors. Many organizations, from hospitals and schools to environmental groups and non-profits, welcome senior volunteers. Local senior centers and community organizations can also provide information on how to get involved and give back. Find information on the website of the Maryland Governor's Office on Service and Volunteerism.

Choosing Acts in Maryland

If you're looking for a fulfilling retirement lifestyle in Maryland, consider Acts Retirement-Life Communities. With several beloved campuses across the state, Acts offers independent living, assisted living, and skilled nursing options, along with a wide array of amenities and services tailored to seniors. Don’t see your question in our Maryland retirement FAQ? Contact Acts today to learn more about our Maryland communities and how we can help you achieve your retirement dreams.