How Much Do You Need to Retire Comfortably in Maryland?
Retiring comfortably in Maryland, like in many states, depends heavily on individual lifestyle preferences, desired level of spending, and healthcare needs. However, by examining typical expenses and expert recommendations, we can provide a valuable framework.
Maryland is often cited as one of the more expensive states to live in, and this extends to retirement. Key cost drivers include housing, healthcare, and taxes. According to the Genworth Cost of Care Survey 2023, the median annual cost for assisted living in Maryland was approximately $60,000, and for a semi-private room in a nursing home, it was around $130,000. While these are for higher levels of care, they illustrate the general cost environment.
To gauge what's needed for "comfortable" retirement, a common guideline is the "80% rule," suggesting retirees aim for 70-80% of their pre-retirement income to maintain their lifestyle. However, a more detailed approach involves estimating specific expenses.
Several financial planning resources provide state-specific cost-of-living data. For instance, according to a recent analysis by the Economic Policy Institute (EPI) for 2022 (latest available state-level data), a modest but adequate budget for a two-adult household with no children in the Baltimore-Columbia-Towson, MD metropolitan area required an annual income of approximately $57,000 for basic necessities. This figure, however, does not factor in significant discretionary spending or long-term care costs.
For a comfortable retirement, financial planners often recommend a higher income to allow for travel, hobbies, dining out, and unforeseen expenses. Estimates from sources like Fidelity and others suggest that a couple in Maryland might need an annual income ranging from $80,000 to $120,000 or more, depending on their desired lifestyle. This would allow for a mix of basic living expenses, healthcare (including potential long-term care insurance or self-funding), leisure activities, and unexpected costs.
It's crucial to consider the "three-legged stool" of retirement income: Social Security, pensions (if applicable), and personal savings/investments. For those considering a CCRC (Continuing Care Retirement Community), the financial planning would also need to account for the entrance fee and ongoing monthly fees, which can cover many of the routine living expenses, simplifying budgeting in many respects.
CCRCs such as those operated by Acts Retirement-Life Communities offer a functional solution to Maryland’s living costs. Once you move into any of the 28 Acts campuses along the East Coast, you are insulated from the biggest cost inflations such as health services. Included through your initial one-time entrance fee and then ongoing monthly fees are access to exceptional dining options, a fitness center with classes, swimming pool, opportunities for socializing and practicing hobbies, and much more. Plus, your future health services are pre-paid by the entrance fee, meaning should you or a spouse ever need a higher level of care such as assisted living, you will receive it on campus with no increase to your monthly fee.
Ultimately, the exact amount needed will be unique to each individual or couple. Consulting with a financial advisor specializing in retirement planning can provide a personalized assessment based on your specific goals and financial situation. But choosing to move to a CCRC is a surefire way to ensure you can budget properly for your ideal retirement life.