What does retirement look like in Maryland?

Written by Ari Parker — Updated: Wednesday, March 13, 2024

Learn about retirement in Maryland, from taxes and income to lifestyle choices

Deciding where to retire is a big, and even overwhelming, decision! There are so many factors to consider before settling down. If you’re considering retirement in Maryland, you aren’t alone! The population of retirees is quickly rising in Maryland. The Maryland Department of Aging reports that 23% of Maryland’s population is over the age of 60, and that percentage is expected to rise to 27% by 2040!  Maryland is a popular retirement destination for those looking for a small town feel all while in a centralized location. 

In this article, we’ll dig into a few pros and cons of retiring in Maryland, so you can make an informed decision about living there. 

Key Takeaways:

  • Maryland is a moderately tax-friendly state for retirees.

  • There are 75 senior living communities in Maryland, but many choose to live with the general population.

  • Maryland is close to several large metropolitan areas that are accessible by train and car.

  • Housing and the cost of living are more  expensive than the national average.

  • Maryland is ranked relatively high on quality and access to health care for older adults.

Pros and cons of retiring in Maryland

When thinking about where to retire, you should consider how tax-friendly a state is, what the retirement community is like, how affordable the housing is, what the climate is like, and what your healthcare options are. We’ll explore each of these factors below.

Retirement taxes in Maryland

Maryland is a moderately tax-friendly state for retirees. Here are a few key points to keep in mind about its income taxes:

  • Social Security income is not taxed.

  • Withdrawals from retirement accounts, (401(k)s and IRAs), are partially taxed. 

  • Wages are taxed at normal rates. Your marginal state tax rate is 4.75%.

  • Public pension income is partially taxed, and private pensions are fully taxed.

Maryland is aptly called a “moderately” tax-friendly state because Social Security isn’t taxed, but withdrawals from retirement accounts, pensions, and wages are taxed. Also, Maryland is the only state in the country with an estate and an inheritance tax. Maryland retirees are also eligible for some tax credits, such as $1,750 for retirees earning less than $100,000. 

Retirement communities in Maryland

There are 75 independent living communities in Maryland. Retirees settle throughout the state, but the most popular areas include: Ocean City, Bel Air, and Annapolis. There are also a variety of 55+ communities across the state for those looking for less hands-on care. These retirement communities make it easier for you to find a social scene that suits your lifestyle. 

While some people choose to retire in a community, many Marylanders choose to experience the state outside of a senior living community. Regardless of your choice, you can still experience all Maryland has to offer! 

Affordable retirement communities in Maryland

There are affordable retirement community options available all across Maryland. Of the low-cost options for senior living communities, prices range from the lowest priced 1-bedroom apartment at $655 in Randallstown, MD to a two-bedroom apartment at $2,970 in Silver Spring, Maryland. Finding an affordable retirement community in Maryland requires research and comparisons. The cheapest place may not be the best choice. You can start your research by:

Climate and outdoor recreation in Maryland

Climate is an important factor when deciding where to retire. In Maryland, you'll experience warm and sometimes humid summers and mild winters. The weather is especially nice during the spring and fall. Those who don't want to experience all four seasons might not enjoy the changing weather. If you like sunny weather year-round, you can look into retiring in Florida or Arizona. 

One of the biggest benefits of retiring in Maryland is its centralized location. From Maryland, you can access big metropolitan areas like Washington D.C., Philadelphia, and New Jersey. Even better, you can get to these prime locations via train. Maryland also boasts natural beauty especially near the coast. Ocean City and Sandy Point are popular destinations for those looking to spend time at the beach. If you’re interested in both outdoor activities and weekends in the big city, Maryland has you covered. 

Housing and cost of living in Maryland

Because of its proximity to a variety of big cities, Maryland has a slightly higher cost of living than average. The cost of living in Maryland is 16% higher than the national average. According to Zillow, the average home value is $401,305, which is slightly higher than the national average of $342,941. 

The Maryland property tax rate is 0.55% while the national average is 0.99%. Maryland offers a Homestead Exemption, which offers property tax relief for residents over 65. 

Quality of healthcare in Maryland

Maryland ranks 9th in overall health for older adults. Additionally, U.S. News and World Report ranked Maryland first in health care quality, and 9th in health care access. Maryland has a variety of world renowned hospitals, including Johns Hopkins and the University of Maryland Medical Center. More than 1.1 million adults in Maryland are enrolled in Medicare, which is about 13% of the state’s population. Learn more about Medicare in Maryland below. 

Medicare in Maryland

Health insurance is important for anyone planning to retire. Signing up for Medicare in Maryland is easier than you might think.

You can enroll in Medicare once you turn 65 years old. You’re eligible to enroll in Original Medicare during your Initial Enrollment Period, which is a 7-month window around your birthday. It includes your birth month, 3 months before your birth month, and 3 months after.

Once you sign up for Medicare, make sure to compare additional coverage options to get the most out of your healthcare. There are a few options to consider, such as Medicare Supplement plans, Part D (prescription) plans, and Medicare Advantage plans. Learn more about additional coverage options here. 

Lastly, make sure you get the best value from your Medicare plan by using all parts of it (like free, preventive appointments and extra benefits). We also recommend that you regularly review your healthcare needs and other coverage options to ensure you're always receiving the best coverage. If you have any other questions about Medicare in Maryland, get in touch with our Maryland Medicare Advisors. 

Retiring in Maryland

Maryland has much to offer, including the accessibility to bustling cities and top tier medical centers. It’s no wonder so many people want to retire in Maryland! Still, understanding the whole picture is important when deciding if you should settle down there. Find out if Maryland is the right place for you to retire by exploring the state and examining if the high cost of living is right for your budget.

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