From paycheck to pension check

Paying attention to details can simplify the transition

Feb. 2, 2017 — Moving to retirement is an exciting time and one that most Ohio Public Employees Retirement System members look forward to – and plan for well in advance. There are a few things that change when you retire that you might not be thinking about, but, if you did, it could make this transition easier:

  • How often you get paid – While you are working, most of you are getting paid every other week or possibly twice a month. Once you are retired you will receive your pension payments once per month. If you are like most people you pay your bills first and then you know how much you have left for other expenses until your next check.  It’s important to remember that once you retire that next check might not be coming for another 30 days.
  • Deductions – When we provide members with an estimate for their pension benefit, we give the gross amount. It still will be impacted by standard deductions, such as taxes and health care premiums. OPERS will deduct federal and state of Ohio taxes based on what you tell us to do, but you still may owe taxes for other states you might live in and local taxes for your city.
  • COLAs – You will continue to get raises once you are retired, in the form of a cost of living adjustment. The difference is when you are working, your raise is based on your current salary, but the COLA is based on the amount of your original benefit. For example, if your original benefit is $1,000 and your COLA for the year is 3 percent, then you would get an additional $30 in your benefit. If in the second year you also are given a 3 percent COLA, it will be 3 percent of the $1,000 original benefit, not your current benefit of $1,030. Your new benefit amount would be $1,060.
  • Emergency savings – If you had an unexpected expense, such as an appliance breakdown, while you were working you might’ve pulled money from your savings or worked some overtime to make up for the extra expense. Once you are retired you have fewer options to make up for extra expenses. So you need to have funds set aside for them.
  • Health care costs – They’ll likely continue to increase, and unfortunately we aren’t able to predict how much or when. So it’s important to have some extra money set aside to help with those expenses.
  • More time, less money – When you retire you will most likely have less income than when you were working and more available time to spend it. You will, however, have more time to shop for better deals, which is a way to make up for less income.

We hope this list will get you thinking and you will find yourself more prepared for the transition from paycheck to pension check.

Donna Castiglione

Donna Castiglione is the assistant director of Member Services and has been with the Ohio Public Employees Retirement System for more than 13 years. She has extensive experience in customer service management in a variety of industries.

Donna Castiglione

Assistant Director of Member Services

  • Retirement might be exciting for some, but scary for me. Fixed income just doesn’t turn me on. And the health care debacle with PERS is sure not comforting to those of us nearing the date. Used to be a great program even though the actual monthly check was nothing to brag about. Sure a different era now. I do appreciate this forum, good info and generally right on target.

  • It would also be helpful to inform new retirees that their first few checks are interim checks and may not be based on final calculations for years of service, etc. That is what I am experiencing and not sure how long it takes for all the numbers to get finalized. I do appreciate that I received my first pension check the day after I retired which was a pleasant surprise so OPERS is looking out for new retirees as we transition from employment to retirement which can have some surprises.

    • Carolyn,

      Thanks for your comment. We usually tell members to expect to receive their initial retirement benefit 30-45 days after their retirement effective date and that the initial payment might be less than the original estimate. Interim payments are calculated before we receive final salary and contribution information from employers.

      Here’s a link to a blog containing a 12-step retirement checklist that includes this advice.

      –Ohio PERS

      • I am retiring in three weeks and was wondering when I should expect my first check. Seems odd you tell people 30-45 days but two people on this forum are saying they received theirs the day after. Does not seem there should be that much difference.

        • Dennis,

          Thank you for your question. There are several factors that could impact our ability to pay a benefit on the effective date of retirement including verification from your employer that your employment has terminated. We quote 30-45 to set realistic expectations, however we strive to pay the first benefit as close to the effective date as possible.

          I hope that answers your question,

  • Have been retired 18 years. Why are you sending this to me? Don’t you think you should separate those “retired” and those “NOT retired” before sending these out?

    • Dorothy,

      If you signed up to receive notices of PERSpective blog posts you’ll receive an email each time we post a new entry, which we expect to be at least twice a week.

      –Ohio PERS

  • Thank you for the financial tips re: retirement. Even tho I have been retired for ten years, any financial updates re: opers are appreciated. I would strongly suggest to those about to retire to check the number of quarters of coverage they have with social security. Even when I retired, opers was pointing out that medical coverage was a bonus, not a guarantee. Some of my colleagues laughed when they saw me working in a grocery store or at a funeral home, but I finally achieved the forty quarters needed for benefits. My check does not pay for much more than dinner out once a month, but it does pay for part B.

  • After being retired for 3 months now, I must commend OPERS for the service I have received during this transition from employee to retiree. I had my first interim benefit check deposited the day after I retired on November 30, 2016. My final calculations on service credit and final average salary were done in a timely manner and my check adjusted accordingly in February, 2017. I received my PLOP promptly after my 90 day wait period. Overall, I have been very pleased that OPERS makes sure its retirees are receiving accurate and timely benefits. My questions have been answered promptly also and written communications to my home are appreciated that keep me updated.

  • So I have this straight:

    Once retired, expect your first monthly check in 30-45 days.
    Once retired, expect your PLOP after a 90 day wait period.

    Is this accurate?

    • Ms. Hitt,

      The typical turnaround time once all documentation and paperwork is in order, the first benefit will be paid in 30-45 days. PLOP payments are made 90 days after the first benefit has been paid.

      Julie, OPERS

  • My last check had 2 weeks plus vacation and sick making me over 80,000.00 do I get the 3rd stimulus check

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