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There might not be a better place to retire than in the northeast – a region with lots of rural lands, beautiful scenery (did we mention that you would be along the Atlantic Coast?), and is an overall well-established area. Among the many states, Delaware and Maryland are among the most popular for retirees. But how do you know which one is better?
Delaware is a better state to retire compared to Maryland. Delaware is more tax-friendly, less heavily populated, and surrounded by peaceful retreats (including 28-mile coverage of beaches along the coast). That’s not to say that Maryland doesn’t have benefits, because it certainly does.
While considering retirement, the best thing to do is explore certain factors that would affect your retirement place. In this article, we will explore Delaware and Maryland advantages and disadvantages and discuss the benefits and factors that make up the act of retiring in the Northeastern United States.
Northeastern United States
The northeastern United States is one of four defined regions of the U.S. This region is bordered by Canada, the midwestern states, the southern states, and the Atlantic Coast. It is the most socioeconomically developed region in the U.S. and is home to five major metropolitan cities, which include Pittsburgh (Pennsylvania), Baltimore (Maryland), Boston (Massachusetts), Washington (D.C.), Philadelphia (Pennsylvania), and New York City (New York). Further, the Northeastern states are classified as the most culturally diverse region.
While the northeastern states might not be the cheapest region to retire in, many benefits outweigh that cost.
First, the proximity. You wouldn’t have to travel long to get to any of the five major cities. Not to mention, there are so many sources of transportation to get there like the Amtrak or a ferry ride. Or even if you just want to take a ride in your car. All are easily accessible.
Second, culture. No matter what state you are in in the northeast, you will find many historical sites, such as the statue of liberty or the Washington monument. You will also find a variety of different foods, entertainment, and scenery.
Third, the region is far more progressive than the rest of the nation. It is a region with the best healthcare, education, public transportation, job markets, and low crime rates. This isn’t to say that anyone state is more progressive but simply determines that the region as a whole is progressive.
With that being said, let’s look into the advantages and disadvantages of the states of Delaware and Maryland.
Delaware
Population
According to the U.S. census, Delaware is the second smallest state in the U.S. (followed by Rhode Island) and the sixth least populated state. Further, the most recent data has estimated Delaware’s population to be approximately 982,895 people. It is also estimated that 19.4 percent of the population is composed of people 65 years and older. When you’re looking to retire, the fewer people, the better right?
Tax and Economics
It may be a surprise to learn that Delaware has great financial benefits, such as lower taxes and lower living costs. In fact, Delaware is one of the tax-friendliest states because there are no local or state taxes, no taxes on Social Security benefits. For anyone over the age of 60, there is a $12,500 exclusion on pensions or other eligible retirement income.
Further, homeowners aged 65 or older may qualify for a tax credit of $400 for property taxes. And depending on income, the state income tax rates can range from 2.2 percent to 5.5 percent if your income is less than $60,000 and is 6.6 percent for incomes higher than $60,000.
Geography
Climate. One great thing about Delaware is the nice, moderate temperature year-round. Typically the temperature ranges from 32℉ to 76℉ monthly, and the average temperature in the summer is 74.3℉. Not too hot, not too cold. You can’t ask for better weather than that!
Environment. Delaware lies on the Eastern Seaboard of the U.S. – surrounded by the Atlantic Ocean and the Delaware Bay. Along the coast is the lowest elevation of the state. And a fun fact: there are 28 miles of the coast to love and enjoy. If you wonder what the natural, highest elevation in the state is, it is the Ebright Azimuth. The state is also bordered by New Jersey, Maryland, and Pennsylvania.
Best Cities to Retire in
New Home Source has labeled six of the top best places to retire in Delaware. Here is what they came up with:
- Wilmington
- Dover
- Milford
- Smyrna
- Newark
- Middletown
Wilmington is an urban city with many attractions to offer, and you can walk on the riverfront. This list didn’t mention that each of these cities has a great piece of history. Delaware was named the first state in the U.S. with over 400 years’ worth of historical sites.
Maryland
Population
Maryland’s population is more than 6 times that of Delaware. The most recent data from the U.S. Census Bureau estimates that approximately 6,045,680 people are living in Maryland. Further, the people that are 65 years or older are approximately 15.9 percent of the population.
Tax and Economics
It’s no secret that living in the Northeast can be relatively expensive, but luckily Maryland is more tax-friendly to the retirement community. For example, it doesn’t tax social security benefits, and some retirees are eligible for a $29,000 exclusion on their pension. Another great thing is that Maryland’s income tax rate doesn’t go beyond 5.75%.
However, even with these financial benefits, Maryland has still been rated as the worst state in the U.S. to retire. It especially ranks low in affordability rates, as the living expenses are more expensive.
Geography
Climate. Generally, Maryland has hotter, humid summers and colder winters. Average temperatures in July can range anywhere from 65℉ to 87℉, depending on the region. On the other hand, January temperatures range anywhere from 20℉ to 40℉, again depending on the region.
Environment. Although the temperatures aren’t as moderate as those in Delaware, Maryland’s land makes up for it as it ranges from high mountain tops to deep blue oceans. You can have it all in one state. Another great factor is that Maryland is also close to other major cities. So, you have beaches, mountains, cities – everything!
Best Cities to Retire in
According to New Home Source, the five cities below are the best for retiring in Maryland:
- Columbia
- Washington, D.C.
- Baltimore
- Chevy Chase Village
- Chevy Chase
Maryland has so much to offer with its diverse culture and foods, beautiful scenery, and important historical sites. Although it is ranked the worst place to retire (from one source), Maryland has many benefits that you might find appeal to you more than Delaware.
Conclusion
Between Maryland and Delaware – Delaware comes out on top for the best state to retire. There is no denying that Maryland has many great features important to the retirement community, but in terms of which state offers the best benefits, Delaware has more. Delaware is very tax-friendly, has a smaller and comfortable population, offers better temperatures year-round, is close to all the major cities, has a great deal of history, and, well, it borders the Atlantic Coast. Overall, it is more appealing for retirees.
Sources
- Landlords Solutions: Top Reasons to Live in Maryland
- Acts Retirement: Want to Retire to Delaware
- U.S. Census Bureau: MD
- U.S. Census Bureau: DE
- Wikipedia: Northeastern United States
FAQs
Is Maryland or Delaware better for retirees? ›
Delaware is a better state to retire compared to Maryland. Delaware is more tax-friendly, less heavily populated, and surrounded by peaceful retreats (including 28-mile coverage of beaches along the coast).
What state is most favorable for retirees? ›According to Bankrate's study, Florida is the best state for retirement in 2022, followed by Georgia, Michigan, Ohio and Missouri. Alaska, on the other hand, held last place in our ranking. The state was dragged down by back-of-the-pack scores in affordability and weather.
Is Maryland a good retirement state? ›Maryland is moderately tax-friendly toward retirees. Social Security income is not taxed. Withdrawals from retirement accounts are partially taxed. Wages are taxed at normal rates, and your marginal state tax rate is 5.90%.
Is Delaware a good retirement state? ›Delaware has plenty to offer retirees. In fact, it consistently ranks among the best cities to retire. First, Delaware is known for its laidback lifestyle. Its proximity to the coast gives the state a beachy vibe filled with relaxation, country vineyards, beautiful estates, and outdoor adventure.
Is Maryland income tax higher than Delaware? ›On a per capita basis, Maryland residents had a higher state and local income tax burden than Virginia, Pennsylvania and Delaware, according to the Tax Foundation's analysis.
At what age do you stop paying property taxes in Delaware? ›be an owner or part owner of the property; 2. be at least 65 years old before the beginning of the tax year on July 1; 3.
What is the best state to retire in 2022? ›The top two states to retire in according to our formula are — drumroll please — Alaska and New Hampshire! Special mentions go to Delaware, Virginia, and Washington, which were all in the top 20 on both lists.
What states to avoid when retiring? ›Alaska, Maine, California, New Mexico and Montana are the five worst states to retire, according to Bankrate, which said they have either a high cost of living, higher relative crime rates or unfavorable weather for older Americans.
Are pensions taxed in Delaware? ›As a resident of Delaware, the amount of your pension and 401K income that is taxable for federal purposes is also taxable in Delaware. However, person's 60 years of age or older are entitled to a pension exclusion of up to $12,500 or the amount of the pension and eligible retirement income (whichever is less).
Where is the best place for retirees to live in Maryland? ›Hagerstown is a thriving community in North Maryland, perfect for retirees who want to live in an exciting urban hub. Hagerstown is home to numerous museums and historical societies, so staying engaged with your city is fun and easy.
Where is the best place to retire in Maryland? ›
- Bel Air. The top spot to retire in Maryland is the town of Bel Air. ...
- Chevy Chase. At 19%, the tax burden you'll face in Chevy Chase is tied for the highest you'll see on this list. ...
- Chestertown. ...
- Ocean City. ...
- Westminster. ...
- Easton. ...
- Rockville. ...
- Annapolis.
Goods and services in the state are 7.7% more expensive than they are on average nationwide, and the average 65 year old should plan on spending $1,219,120 throughout retirement, nearly $99,000 more than the national average. Housing costs are especially high in Maryland.
Why are retirees moving to Delaware? ›Delaware has a favorable tax code for retirees. Delaware has no state sales tax, no taxes on social security income, and allows a $12,500 deduction for income from pensions. What property taxes to retirees pay in Delaware? Delaware already boast of the 6th lowest property taxes in the nation at 0.56%.
Why people retire in Delaware? ›Practical matters like finances are a top concern when it comes to retirement planning. Retiring in Delaware is a smart money move because the state has one of the nation's lowest property tax rates, along with exclusions for seniors on pension and 401(k) income and other tax credits for homeowners over the age of 65.
Does Maryland tax Social Security and pensions? ›Does Maryland tax Social Security benefits? No. Taxpayers affected by the federal tax on Social Security and/or Railroad Retirement benefits can continue to exempt those benefits from state tax.
What is not taxed in Delaware? ›The state has no value-added taxes (VATs), it does not tax business transactions, and it does not have use, inventory or unitary tax. There is no inheritance tax in Delaware, and there are no capital shares or stock transfer taxes.
Are property taxes high in Delaware? ›Delaware boasts the seventh lowest property tax rate of any state in the U.S. The average effective property tax rate is just 0.56%. That means that, on average, a home in the state of Delaware with a market value of $200,000 would have taxes of about $1,120 annually.
At what age do you stop paying property taxes in Maryland? ›Be at least 65 years of age. Use the home as their Principal Residence.
Do seniors pay school taxes in Delaware? ›Homeowners age 65 or over are eligible for a tax credit against regular school property taxes of 50 percent (up to $500). This credit may only be used against property taxes on a primary residence. Have a Delaware Driver's License (60 days by law to change driver's license);
Do seniors pay property tax in Delaware? ›The State of Delaware currently offers homeowners ages 65 and over a tax credit against their school property taxes of 50% (up to $400). The Senior School Property Tax Credit may be used against the property taxes on a primary residence.
What is the number 1 place to retire in the world? ›
Countries in Europe and Central America dominate 2021's Top 10 list of best places to retire. The most popular retirement destinations feature good weather, professional healthcare provision, simple access and affordability. Spoiler alert: Panama tops the list of the world's best retirement spots for 2021.
What are the 3 states that don't tax retirement income? ›States That Don't Tax Retirement Income
Those eight – Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming – don't tax wages, salaries, dividends, interest or any sort of income.
...
The Best Cities To Retire on $2,000 a Month
- Baytown, Texas.
- Parma Heights, Ohio. ...
- Des Moines, Iowa. ...
- Florissant, Missouri. ...
- Longview, Texas. ...
- San Angelo, Texas. ...
- North Royalton, Ohio. ...
...
Best Cities to Retire
- Sarasota, Florida.
- Lancaster, Pennsylvania.
- San Antonio, Texas.
- Grand Rapids, Michigan.
- El Paso, Texas.
- McAllen, Texas.
- Daytona Beach, Florida.
- Pittsburgh, Pennsylvania.
- Alaska.
- Florida.
- Nevada.
- New Hampshire.
- South Dakota.
- Tennessee.
- Texas.
- Washington.
Tax Benefits of Retiring in Delaware
Along with only Alaska and three other states, Delaware has no no state or local sales tax. Also no taxes on Social Security benefits. Plus $12,500 exclusion for retirement income (such as pensions) if you are over 60.
A Delaware Resident is an individual who is domiciled in Delaware for any part of the tax year or maintains an abode in Delaware and spends more than 183 days here.
Is Chesapeake Bay a good place to retire? ›Retiring Here
There are many nice retirement communities in both the Maryland and Virginia portions of the Chesapeake Bay region. Active retirees will enjoy proximity to the Bay for fishing and boating. This region has lots of golf courses and other outdoor recreational opportunities too.
Waterfront Lifestyle
As a matter of fact, there are some really great reasons to retire in Maryland! In Annapolis, Maryland, Baywoods of Annapolis offers one of the few retirement communities overlooking the magnificent Chesapeake Bay.
Is Easton, Maryland a Good Place to Retire? Easton, Maryland, is continually rated as one of the best small towns in America and is quickly growing as a popular retirement destination. Retirees enjoy the balance of small, coastal-town living with accessible urban amenities.
Where is the safest place to live in Maryland? ›
- Ocean Pines.
- Hampstead.
- Glenarden.
- Centreville.
- Mount Airy.
- Berlin.
- Thurmont.
- Taneytown.
In general, the state of Maryland is more expensive than Virginia. The cost of housing, healthcare, and transportation are all higher in Maryland than in Virginia.
What is a good monthly retirement income? ›A good retirement income is about 80% of your pre-retirement income before leaving the workforce. For example, if your pre-retirement income is $5,000 you should aim to have a $4,000 retirement income.
How much does the average 70 year old have in savings? ›According to data from the Federal Reserve, the average amount of retirement savings for 65- to 74-year-olds is just north of $426,000.
Is $4000 a month a good retirement? ›Retiring on $4,000 a month will give the average American plenty of options for a fulfilling retirement—and leave some room to splurge on the grandkids and travel. So how do you pick a spot?
Where is the most affordable place to live in Delaware? ›- Wilmington. There's a reason why Wilmington real estate is flying off the market at record speed. ...
- Dover. Surprisingly, the capital of the First State remains one of the most affordable places to live in the state and has many people relocating to Delaware. ...
- Pike Creek. ...
- New Castle. ...
- Camden.
Rehoboth Beach has become one of the best retirement and 55 plus communities in the United States in recent years, with thousands of new residents relocating to the Delaware Beaches from states like New Jersey, New York, Pennsylvania, and Virginia. And it's no secret why.
Is Bethany Beach Delaware a good place to retire? ›Known as Delaware's "Quiet Resort," the beautiful coastal community of Bethany Beach is a great place to retire in the mid-Atlantic region of the United States.
What is the safest place to live in Delaware? ›| Rank | City | Safety Index |
|---|---|---|
| 1 | Newark | 0.23 |
| 2 | Middletown | -0.15 |
| 3 | Smyrna | -0.26 |
| 4 | Dover | -0.5 |
| Rank | Place | County |
|---|---|---|
| 1 | Greenville | New Castle County |
| 2 | Henlopen Acres | Sussex County |
| 3 | South Bethany | Sussex County |
| 4 | Dewey Beach | Sussex County |
Where is the best place to live in Delaware for retirees? ›
- Wilmington. Population: 70,750. % of Population Above 65:4% ...
- Newark. Population: 31,155. % of Population Above 65:3% ...
- Dover. Population: 38,992. ...
- Milford. Population: 12,272. ...
- Middletown. Population: 24,164. ...
- New Castle. Population: 5,499. ...
- Seaford. Population: 8,250. ...
- Georgetown. Population: 7,413.
Congratulations, Delaware – you're the most tax-friendly state for retirees! With no sales tax, low property taxes, and no death taxes, it's easy to see why Delaware is a tax haven for retirees.
How much do you need to retire in Delaware? ›In Delaware, average retirement spending stands at an estimated $1,028,189 – the 21st highest among states. Goods and services in the state are 2.1% less expensive than they are, on average, nationwide, and life expectancy at age 65 is 19.2 years to 84.2, compared to 19.5 years to 84.5 across the country as a whole.
Is it cheaper to live in Maryland or Delaware? ›Maryland is 20.4% more expensive than Delaware.
Where is the best place in Delaware to retire? ›If you're looking specifically for the best retirement communities in Delaware, Dover is likely your best option. You'll find multiple 55-plus communities, as well as some of the best neighborhoods in Delaware overall. You'll also get plenty of dining options and attractions, including sporting and cultural events.
Is your pension taxed in Delaware? ›As a resident of Delaware, the amount of your pension and 401K income that is taxable for federal purposes is also taxable in Delaware. However, person's 60 years of age or older are entitled to a pension exclusion of up to $12,500 or the amount of the pension and eligible retirement income (whichever is less).
Where is the cheapest and safest place to live in Maryland? ›- Arbutus.
- Bel Air.
- Brunswick.
- Easton.
- Glenarden.
- White Marsh.
The state has no value-added taxes (VATs), it does not tax business transactions, and it does not have use, inventory or unitary tax. There is no inheritance tax in Delaware, and there are no capital shares or stock transfer taxes.
What is the safest city to live in Delaware? ›- Clayton.
- Lewes.
- Milton.
- Middletown.
- Newark.
- Smyrna.
- Elsmere.
- New Castle.
Known for its central location, low crime rates, zero sales tax, relatively low cost of living and beautiful clean beaches, moving to Delaware can be a great choice if all of that sounds like what you'll like to experience. Delaware is home to several industries that support both small and large businesses.
At what age do you stop paying property taxes in Maryland? ›
Be at least 65 years of age. Use the home as their Principal Residence.
Is Delaware tax free for retirees? ›Tax Benefits of Retiring in Delaware
Along with only Alaska and three other states, Delaware has no no state or local sales tax. Also no taxes on Social Security benefits. Plus $12,500 exclusion for retirement income (such as pensions) if you are over 60.
Does Maryland tax Social Security benefits? No. Taxpayers affected by the federal tax on Social Security and/or Railroad Retirement benefits can continue to exempt those benefits from state tax.