Life used to be simple. Your community’s deferred compensation plan may have offered only one option. But financial companies have created numerous products over the past few decades and communities have come to realize that the personal financial needs of individual police and firemen vary quite substantially. So, today most communities offer multiple options, each with their own set of investment vehicle choices and accompanying fees. It’s up to you to pick the right plan for your particular situation, regularly monitor your account and then make adjustments as market conditions change in today’s volatile market.
Just as in the private sector, new retirees in the public sector can also expect benefits to be reduced for you and your family. The Ohio Retirement Study Council in their recent Critical Review has recommended changes to all Ohio public service pensions. Even those in retirement may be subject to cost containment initiatives that may reduce healthcare benefits and thus monthly income. Some of the changes that are being discussed include: increasing retirement ages similar to Social Security, increasing employee contributions, reducing cost-of-living adjustments up to 50%, increasing the years of service to determine monthly benefits, lowering DROP annual interest rates and more.
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 retirement.