Are you well-prepared for a comfortable retirement? Your personal savings and investment earnings are essential for securing the lifestyle you want after you finish working. However, the Ohio retirement system is a critical third component that all residents need to understand.
Below, you can learn more about Buckeye State's retirement program and how to successfully navigate it to build your wealth portfolio.
What Is OPERS?
The Ohio Public Employees Retirement System is the state's official retirement system that has been in place since 1935. The main components of this system include the following:
Providing retirement contributions through a Defined Benefit (DB) pension
Giving employees their survivor benefits
Providing disability benefits to qualifying workers
OPERS provides these benefits through either a traditional pension plan, a member-directed plan, or a combined plan. With this structure in place, eligible employees in Ohio are more likely to secure a steady retirement. Why not look into taking advantage of the OPERS pension program and supplementing it with individual savings or Social Security benefits if you’re eligible?
What Is a Defined Benefit (DB) Pension?
Much like a 401(k), a Defined benefit, or DB pension, is a collection of funds that both an employer and employee contribute toward. These contributions accrue throughout the employee's tenure at a job, and a professional asset manager invests them.
Once you reach retirement age, you can start collecting DB pension benefits. The funds should grant you a reasonable monthly income for the rest of your life, so it has alot to offer.
How the Ohio Retirement System Impacts Various Workers
If you're an OPERS member, you do not pay into Social Security but rather make an employee contribution toward the system (your employer contributes too). Over 350,000 public employees contribute to OPERS. However, small differences exist between the type of retirement benefits each worker will receive.
The total contribution toward OPERS also varies between the state and local government divisions, the law enforcement division, and the public safety division. The public safety division has the highest employee contribution and employer contribution across the three categories.
The Ohio retirement system may not permit you to collect Social Security unless you previously paid into it at another job, but it does not prevent employees from opening other types of investment and retirement accounts like an IRA, ROTH IRA, or Individual Borkerage accounts.
While OPERS is the official State Teachers Retirement System, a separate program exists for all school employees who retain a non-teaching position, such as administrators or school custodians. This School Employees Retirement System of Ohio provides eligible workers with a defined benefit pension as well as access to healthcare benefits.
One Of The Best Ways To Invest in Your Future
The OPERS system provides great benefits, but what about when it is paired with IRA accounts, and other tools for building retirement assets? As long as you qualify for these benefits and act wisely with your accumulating investment earnings, a steady income throughout retirement is possible. And this is where a retirement planning professional can help take an existing benefit from an employer, and pair it with other account types for creating retirement income.
Do you have concerns about saving up for retirement? You’re not alone. Contact Lakehouse Family Wealth at (440) 589-7700 to speak with a retirement planning specialist or request a free assessment online today!