Get answers to frequently asked questions
Maryland’s new state-sponsored retirement savings program is open right now. It was created to help nearly one million Marylanders who work but don’t have access to employer-sponsored retirement plans. We understand you’ll have questions. Here are the answers to some frequently asked questions. If you have additional questions, we’re here to help.
- Account Access
- Contributions
- Eligibility
- Employer Registration
- Fees and Costs
- General
- Investments
- Linking Bank Accounts
- Saver's Credit
- Security
- Tax Forms
- Withdrawals
- Is the contribution rate based on gross or net income?
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Your contribution rate is based on your gross income (total income before taxes and other regular deductions are taken).
- How much am I allowed to save each year in MarylandSaves?
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Contribution limits for IRAs are set by the federal government. For 2024, you can save up to $7,000 per year if you’re younger than 50 and $8,000 per year if you’re 50 or older, as long as you have earned at least that much. This contribution limit applies across all IRAs you may have (both Traditional IRAs and Roth IRAs with the State and elsewhere). Your MarylandSaves Account will automatically stop accepting contributions if you go above the limits in any year.
If you are contributing to a Roth IRA, you also need to meet certain income levels based on your modified adjusted gross income (MAGI). See this publication from the IRS for more information about how your Modified Adjusted Gross Income determines how much you are able to contribute to your Roth IRA account.
- Is there a maximum amount or percentage of income that can be contributed?
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There is no upper limit on the percentage of income that can be contributed; however, IRAs have annual dollar contribution limits. For 2024, the contribution limits are $7,000 per year ($8,000 per year if you are age 50 or older), as long as you earn at least $7,000 in wages. Roth IRA contributions may be further limited by your income if it is above certain limits. Click here for more information about the limits of Roth IRA contributions that you can make for 2024.
- Why does the program include an auto escalation of contributions?
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MarylandSaves aims to improve access to retirement savings accounts for workers and improve outcomes when it comes time to retire. A savings rate of 5 percent is a good place to start, but employees may need to save more than 5 percent over time to achieve financial security in retirement. Research shows that people are far more likely to save more if their retirement plan includes automatic increases.
- Can I opt out of automatic contribution increases?
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Yes, you can opt out of automatic contribution increases at any time online or by phone. Just visit the “Settings” section of your account.
- Are employers responsible for telling employees when contributions will auto escalate?
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No. MarylandSaves will notify participating employees about auto-escalation prior to any increase.
- If I already have a retirement account, do I need MarylandSaves?
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That depends. Many people have retirement savings accounts, but many who do still think they haven’t saved enough for a secure retirement. MarylandSaves offers the benefits of having a Roth IRA and also gives you an emergency savings feature, which most other retirement plans do not. Before deciding that you don’t need MarylandSaves, you might use the retirement calculator to estimate what your existing plan might pay when you’re no longer working.
- Can I make a tax-free rollover from a 529 (college savings) account to a MarylandSaves account?
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Yes, beginning on January 1, 2024, you can make a tax-free rollover from a 529 college savings account to your MarylandSaves account (or to any qualified Roth IRA). The rollover must be to a Roth IRA account in the name of the 529 account beneficiary, not in the name of the account owner/participant. In addition, the 529 account must have been open for a minimum of 15 years prior to the rollover to qualify as tax-free. Rollover amounts are subject to the annual contribution limits applicable to Roth IRAs. Over a lifetime, you may rollover up to $35,000 per beneficiary tax-free.
Forms to initiate a 529-to-Roth IRA rollover can be found with your 529 college savings plan.