Retirement Planning in Ohio

Retiring in Ohio: the starting facts

About 18.3 percent of Ohioans are 65 or older, one of the older age profiles among large states. According to the U.S. Census Bureau, 2020 to 2024 American Community Survey, the median home is valued near $214,800 and about 67.2 percent of homes are owner occupied. Lower housing costs are the state’s biggest retirement advantage. A couple with a paid-off home in Mansfield or Zanesville spends far less than one in a coastal metro area, and the savings go straight to the monthly budget.

The state does have its own challenges: older homes that need repairs, long winters, and a health system that varies from world-class hospitals in Cleveland and Columbus to long drives in rural counties.

How Ohio taxes retirement income

Ohio does not tax Social Security benefits. The state taxes other income, including IRA and 401(k) withdrawals and pensions, at its income tax rates, which have been falling in recent years, and it offers a small credit for eligible retirement income. Because the schedule has changed repeatedly, review the current rates and brackets with a tax professional before you plan a large withdrawal or a Roth conversion.

Local taxes work differently. Most Ohio cities levy an income tax on wages and net profits, and many school districts add one. These taxes generally do not apply to Social Security or pension income, so a retiree can move to a city with a high wage tax and owe little. A retiree who keeps working part time, or who owns a rental, may still owe it. Our tax planning guide explains how federal brackets interact with these layers.

Property tax relief for Ohio homeowners

Property tax is a major cost for retirees who own a home. Three ideas are worth knowing.

• Homestead exemption. Owners who are 65 or older, or permanently and totally disabled, and who meet an income limit can shield part of the home’s value from tax. Apply through the county auditor.
• Rollbacks. Property tax reduction programs lower the bill on owner-occupied homes, and they appear on the tax statement.
• Valuation appeals. Any owner can file a complaint with the county board of revision, usually early in the year, if the valuation looks too high.

Amounts and limits change, so confirm current rules with your county auditor.

Public pensions and Social Security in Ohio

A large share of Ohio retirees worked for government or schools. The State Teachers Retirement System covers most teachers, the School Employees Retirement System covers non-teaching school staff, the Public Employees Retirement System covers most state and local workers, and a separate fund covers police and firefighters. Most teachers in the state do not pay into Social Security through their teaching jobs, which meant that a spouse’s or survivor’s benefit could be reduced by earlier federal rules. The Social Security Fairness Act, signed in January 2025, repealed the Windfall Elimination Provision and Government Pension Offset. Anyone with a pension from work outside Social Security should request an updated benefit estimate.

Public workers often face an election: take a defined benefit, a defined contribution plan or a combined plan, and choose a payment option with or without a survivor benefit. These choices are hard to reverse. A planner can model the options side by side, including how a survivor option compares with life insurance. Our retirement planning guide covers the broader sequence.

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Healthcare and long-term care

Medicare begins at 65. Retiring earlier means paying for private coverage or an employer retiree plan, and premiums can be a significant expense. Ohio has a program called OSHIIP that offers free, unbiased counseling on Medicare choices, and it is worth a call before you choose between traditional Medicare with a supplement and a Medicare Advantage plan.

Long-term care is a larger question. Medicaid pays for nursing home care for people who meet income and asset limits and has a five-year look-back for gifts, so giving property away shortly before needing care can create a penalty. Families can compare long-term care insurance, a life policy with a care rider and self-funding. An elder law attorney can explain the choices.

Turning savings into a paycheck

Most retirement income plans use buckets. Cash and short-term bonds cover the next few years of withdrawals, bonds and balanced funds cover the middle years, and stocks cover the long run and inflation. A retiree with a large pension can usually hold more stocks than one living on savings alone. The order of withdrawals also matters. Many retirees draw from taxable accounts first, then tax-deferred accounts, then Roth accounts, though the right order depends on brackets and required minimum distributions. Our investing basics guide explains diversification.

What retirement advice costs

Choosing a retirement advisor in Ohio

1. Have the advisor explain, step by step, how your savings and pension become a monthly paycheck.
2. Ask about experience with STRS, SERS, PERS and city pension systems.
3. Check the advisor with the SEC, FINRA and the Ohio Division of Securities.
4. Request the full yearly cost as a dollar figure in writing.
5. Make sure they model Social Security claiming ages for both spouses, since the survivor keeps the larger of the two benefits. Ask to see the results as a table you can take home, with the assumptions about inflation, returns and life expectancy listed so you can question them.
6. Interview two or three, and be wary of anyone who opens with a product pitch.

Staying in your home or moving

Many Ohio retirees own homes they have lived in for decades. Staying keeps familiar neighbors, doctors and family close, but upkeep, stairs and winter driving become harder with age. Some households modify the home with a first-floor bedroom, grab bars and a walk-in shower. Others sell and move to a smaller house, a condo or a senior community. Each path has different costs, and a planner can compare them with your income. Selling a home can also release equity to fund care later, and the federal rules on gain from a primary residence can exclude a significant amount for qualifying sellers. If you are tempted to move to a warmer state, test the full budget, including health care access, and count the days you will spend in each place, since a state may claim you as a resident.

Estate documents that matter at retirement

Ohio does not have an estate tax, but documents matter. A will names who receives property, powers of attorney name who can manage money and make medical decisions if you cannot, and beneficiary forms control retirement accounts and life insurance regardless of the will. Ohio allows transfer on death designations for real estate and certain accounts, which can avoid probate for some assets. Our estate planning guide explains each document. Review them when your health, family or finances change.

Social Security claiming decisions

When to claim is one of the largest choices a retiree makes. Benefits can start as early as 62, grow each year you wait until full retirement age and keep growing until 70. For married couples the stakes are higher, because the higher earner’s benefit becomes the survivor benefit. Waiting often makes sense for the higher earner if health and savings allow, while the lower earner may claim earlier. Retirees who stop working before claiming need other income to bridge the gap, which is where savings, part-time work or a pension come in.

Working while collecting before full retirement age can temporarily reduce benefits through an earnings test, and up to 85 percent of benefits can be subject to federal income tax depending on total income. Planning withdrawals and Roth conversions around those thresholds can reduce the tax on benefits. A planner can run several claiming ages for each spouse and show how long you would need to live for each to come out ahead.

The first five years of retirement

The years just before and after you stop working carry unusual risk. A market decline early in retirement, when withdrawals have begun, can do more damage than the same decline later, because you sell more shares to fund the same spending. Holding several years of withdrawals in cash and short-term bonds lets you avoid selling stocks in a downturn. Flexible spending helps too. A household that trims travel or gifts for a year or two after a loss can preserve far more of its portfolio than one that keeps spending the same amount.

These years are also a window for tax moves. If you have stopped working but have not yet claimed Social Security or reached the age for required distributions, your taxable income may be low. Partial Roth conversions in that window can reduce future required distributions and leave more tax-free money to heirs. Good planning treats the first five years as a project with a budget, a withdrawal plan and a tax calendar, not as a vacation with an open checkbook.

Frequently asked questions