If you’re a mid-career member of STRS Ohio, with five (5) to twenty-five (25) years of service credit, you may be wondering what opportunities you have to plan for your future. After all, most decisions related to your STRS benefits were made as a new member. While the decisions you have to make regarding your STRS benefits may be minimal, there are some important STRS milestones to keep in mind and financial planning opportunities exist beyond STRS Ohio benefits.
First, let’s take a look at some important milestones you may reach as a mid-career member of STRS Ohio:
1. Provided you are at least age 60, you may be eligible for reduced retirement benefits once you reach 5 years of service credit.
2. Provided you are at least age 65, you may be eligible for unreduced retirement benefits once you reach 5 years of service credit.
3. Defined Contribution plan participants that reach 5 years of service become 100% vested in employer contributions.
4. Should a Defined Benefit or Combined plan participant pass away after reaching 5 years of service credit, his or her survivor(s) may be eligible for a stream of income, medical, dental, and/or vision insurance.
5. Should a Defined Benefit or Combined plan participant become disabled after earning 10 years of service credit, he or she may be eligible for a stream of income and/or health care coverage.
6. Participants in the Defined Benefit or Combined plans that retire before August 1, 2023 must have at least 15 years of service credit to qualify for the medical, dental, and vision plans.
7. Participants in the Defined Benefit or Combined plans that retire on or after August 1, 2023 must have at least 20 years of service credit to qualify for the medical, dental, and vision plans.
Next, it’s important to understand the financial planning opportunities that exist beyond your STRS Ohio benefits.
Set or Review Financial Goals
Now that you’ve settled into your career, take the time to set financial goals! If you set financial goals a while ago, use this time as an opportunity to review and update them. Goals will change at various stages of life, but identifying and periodically reviewing them will enable you to remain focused on short and long-term financial objectives.
Save Beyond STRS Ohio
You may be eligible to participate in a retirement plan beyond that which STRS Ohio provides, such as a 403(b), 457(b), or an Individual Retirement Account (IRA). These plans may enable you to set aside funds to supplement the retirement income from STRS Ohio. In addition, be sure to create an emergency fund to cover expenses during an unforeseen life event such as job loss, disability, or death of a spouse.
Understand Your Spouse’s Benefits
Perhaps your spouse is not a member of STRS Ohio? If that’s the case, it’s important you understand how your benefits interact with his or her current and/or future retirement income, health insurance, etc. A question I’m frequently asked is “How will my STRS benefits impact my spouse’s Social Security income?” As a mid-career member of STRS Ohio, now is the time to begin planning for the future so that you may begin to understand your family’s full financial picture, not just the benefits STRS Ohio may provide you.
Get Your Estate Plan In Order
Creating an estate plan is the last thing many people want to think about while working. After all, if we all live a “full life” why should we be concerned with what happens to children or assets upon our passing? The reality is things happen, and a properly drafted estate plan will outline how your assets pass or who becomes guardian of your minor children should you die prematurely. In addition, as part of this process, you should ensure you have sufficient life insurance.
There are certainly other financial planning opportunities that exist at this stage of your career. However, my hope is this post will encourage you to address these areas of opportunity so you may turn your attention towards higher priorities in your life!