It is no longer safe to assume that your Ohio retirement benefits are unlikely to decrease before you retire, and that once you’re officially retired your benefits are safe and “grandfathered.”
Years of living in a challenging economic environment has caused STRS to set in motion cost-cutting measures which will have a direct negative effect on your retirement benefits, making it more important than ever for you to plan accordingly. Consequently, just as in the private sector, new public sector retirees can expect their benefits to be reduced. In fact, on September 26th, 2012, Governor Kasich signed pension reform bills into law that enact the changes the STRS Board has been working on since 2009.
Some of the primary changes that will affect your pension and subsequent retirement include: increasing employee contributions, increasing retirement ages and years of service to determine monthly benefits, reducing cost-of-living adjustments (COLA), decreasing the benefit formula for your pension, and more.
So, before deciding on when to retire, take the time to find out how much money you will need monthly after taxes and insurance to enjoy a comfortable retirement. Obviously, the recent changes mentioned above can have a significant impact on your retirement and your goal should be to minimize the negative effects of these changes. To do so, consider seeking the help of a qualified independent financial advisor to help you put together a thorough plan tailored for your particular situation. Financial professionals can give you access to a wide array of investment options and strategies you otherwise would most likely be unaware of. Ultimately, good financial advisors pay for themselves.