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
- Can I make withdrawals?
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The simple answer: Yes, if and when you need to take money from your account, you can simply make a withdrawal. However, in some instances you should understand that there could be a small cost that you will pay on your next year’s tax return. MarylandSaves itself doesn’t charge any administrative fee for withdrawals.
Your WorkLife Account is legally a Roth Individual Retirement Account. It was designed to help you save for retirement over the long term so in many cases there are tax costs for using it before you retire. For these reasons, investment earnings that you take out before age 59½ and before you’ve had your Roth IRA for five years will be taxable and subject to ten percent penalty. These costs are not large: For example, if you withdraw $100 from your Emergency Savings Fund you could expect to pay approximately about 44¢ in penalties and taxes. You may wish to consult a tax advisor to be sure you understand the impact of any withdrawals you make. You can get more details here.
- Are there additional withdrawal restrictions beyond normal Roth IRA restrictions?
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No. The only withdrawal restrictions for MarylandSaves IRAs are those set by the federal government for any Roth or Traditional IRA. If you’re concerned, you can consult with a tax expert or financial advisor.
- Can I transfer my MarylandSaves money into another retirement savings account?
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Money in your Roth IRA can be transferred or rolled into another Roth IRA only. You should consult with a tax expert or financial advisor first.
- Will Maryland state income tax be withheld from my Roth IRA withdrawals?
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If you are a resident in the state, Maryland income tax withholding applies only to the taxable portion of IRA distributions. Therefore, if your withdrawal is a qualified distribution there will be no income tax withheld. If your withdrawal is not a qualified distribution, then a minimum of 7.75% of the taxable portion (the earnings) will be withheld in the state of Maryland, but you may claim an exemption from withholding, if eligible, or you may elect to have an additional amount withheld, by completing and submitting Form MW507P.
- How long will it take to receive my money?
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Please allow up to 3-5 business days. Distributions will generally be processed within 3 business days of your request. During periods of market volatility and at year-end, distribution requests may take up to 5 business days. For security purposes, there will be a hold of 15 calendar days when there is a change to your address, and a hold of 15 calendar days following a change to your banking information. Distributions of contributions made by check or ACH will not be available for withdrawal for 5 business days.
- What happens to my money if I die with no named beneficiaries?
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If you die and have no named beneficiaries, the account will be payable to your estate under the terms of the IRA. Accounts that become unclaimed property will be subject to applicable law.
- Is there a minimum retirement age for MarylandSaves?
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There is no minimum retirement age associated with the program. There is a federal tax penalty for withdrawing any investment earnings from a Roth IRA before age 59½, unless it’s for a qualifying reason. Please consult with a tax expert or financial advisor.