8 Mistakes Ohio Workers Make in the Final Stretch Before Retirement

An Ohio state worker sits across from a retirement counselor with a stack of forms and thirty years of decisions riding on their next signature.

Retirement counselors say the final stretch is where a lifetime of good saving habits can get undone in a single afternoon.

These are the mistakes Ohio workers make in the last stretch before they retire.

Note: This is general information, not financial, tax, or medical advice. Pension formulas, tax rules, and Medicare deadlines are subject to change.

1. Assuming Coverage Buys Medicare Time

The Ohio Public Employees Retirement System (OPERS) requires every Medicare-eligible retiree to enroll in Medicare Part A and Part B the moment they qualify, not whenever it’s convenient.

Many workers assume their OPERS retiree health coverage buys them extra time to sort it out.

It doesn’t.

The Medicare Part B special enrollment period runs just eight months from the day active job coverage ends, not from the day a retiree picks a plan through the OPERS Connector.

Miss that window, and Medicare tacks on a 10% penalty for every 12-month stretch a retiree waited, and it never goes away.

The OPERS Medicare Connector helps a retiree shop for a Medicare Advantage or Medigap plan, but it doesn’t stretch that eight-month clock by a single day.

What a Late Medicare Enrollment Costs an Ohio Retiree

The standard Medicare Part B premium runs $202.90 a month in 2026.

An Ohio retiree who waits a full year past their deadline owes a permanent 10% surcharge on top of that, close to $20 more every month.

That adds up to roughly $240 a year, every year, for missing one form.

2. Setting a Retirement Date Blind

An OPERS Traditional Pension Plan benefit comes from a member’s final average salary, but the formula behind that number depends on which retirement group a member falls into.

Many workers finishing out a full career now belong to Group A or Group B, meaning anyone who joined OPERS before 2013, and their final average salary is the average of the three highest calendar years or the last 36 months of pay, whichever comes out larger.

Group C, covering law enforcement and public safety, averages the five highest years or the last 60 months instead.

Only members who joined OPERS after July 1, 2013 use the five-highest-of-the-last-ten-years formula many retirees assume applies to everyone.

A retirement effective date always lands on the first day of the month after the last day worked, and that single date decides exactly which paychecks fall inside that averaging window.

Two weeks can matter.

Push a planned exit past a raise, a stipend, or a longevity payment, and a slightly later date can pull a bigger year of pay into that window.

Retire two weeks too early instead, and that same year falls just outside the window for good.

An OPERS counselor can run the benefit estimate both ways before a retiree signs anything.

3. Rushing the Payment Plan Choice

Every retiring OPERS member picks one of three payment plans for their monthly benefit on the same application as the retirement date itself: A Single Life Plan, a Joint Life Plan, or a Multiple Life Plan.

The Single Life Plan pays the most every month, but the payments stop the day the retiree dies.

Nothing continues.

A married retiree defaults into only a 50% Joint Life Plan for their spouse unless that spouse formally signs off on something different, and the consent form is easy to lose in a stack of retirement paperwork.

Once that first check lands, the choice is locked in for life in nearly every case.

4. Budgeting off Old Social Security Math

The Social Security Fairness Act wiped out the Windfall Elimination Provision and the Government Pension Offset in January 2025, two rules that used to shrink or zero out a public retiree’s Social Security check.

More than 231,000 Ohioans now qualify for a bigger Social Security benefit because of it.

The Congressional Budget Office estimates the average increase runs about $360 a month for a worker’s own benefit, and higher still for an affected spouse or survivor.

Someone finishing out a career now and drafting a retirement budget off the pre-2025 numbers is short-changing their own math.

That’s money already earned.

Psst! Curious how far Ohio’s numbers stretch in retirement? Plug in a few figures below and see how long the savings could last.

5. Skipping the Lump Sum Math

A retiring OPERS member can take a Partial Lump Sum Option Payment (PLOP) alongside a reduced monthly benefit, chosen on the same retirement application as the payment plan.

The payout can run as high as 36 times the retiree’s normal monthly benefit.

That’s a big check.

It’s also fully taxable the year it lands, unless the retiree rolls it straight into a qualified plan or an individual retirement account (IRA).

A retiree who takes the cash without checking their tax bracket first can watch a chunk of that lump sum disappear before it ever reaches a bank account.

6. Skipping Ohio’s Withholding Form

OPERS never withholds a dollar of Ohio income tax from a retiree’s pension unless the retiree asks for it in writing.

That request has to land on a separate form, the Recipient’s Withholding Certificate for Ohio Personal Income Tax (IT-4P), which isn’t part of the retirement application itself and is easy to lose in a stack of paperwork about payment plans, PLOP elections, and beneficiary forms.

Nobody chases it down.

Pension payments, 401(k) withdrawals, and traditional IRA distributions all count as ordinary income on an Ohio tax return, taxed at a flat 2.75% rate above the first $26,050.

A retirement income credit trims that bill, but it tops out at just $200 a year, nowhere near enough to offset a full year of unwithheld tax.

OPERS won’t start withholding until the month after it receives a completed IT-4P, so a retiree who mails the form in weeks after their first check has already banked several untaxed payments they’ll owe the state for later.

7. Counting on a COLA Too Soon

The State Teachers Retirement System of Ohio (STRS Ohio) grants an annual cost-of-living adjustment (COLA), but it phases the raise in by retirement date instead of handing it to every retiree at once.

Retirees who started collecting benefits by June 1, 2022 qualify for the 1.6% COLA taking effect in fiscal year 2027.

A teacher retiring today doesn’t make that cutoff.

It hasn’t happened yet, anyway.

Someone finishing out a career this year and counting on an inflation raise right out of the gate could go years without seeing a COLA.

STRS Ohio has said its long-term goal is a permanent 1% COLA, but a goal isn’t the same as a guarantee for a brand-new retiree’s first few years.

8. Lining up a Comeback Without the Break

OPERS retirees who go back to work too soon can forfeit the very benefit they just started collecting.

Return to any OPERS-covered job within the first two months after a retirement benefit effective date, and OPERS forfeits both the pension and health care coverage for that entire stretch.

Even volunteering doesn’t dodge it.

Even a contract with that same employer years later triggers the same penalty: OPERS suspends the pension and cuts off health care coverage for as long as the new arrangement lasts.

Retirees who negotiate a part-time comeback with their old employer before they’ve even signed their retirement paperwork are setting up that forfeiture months in advance.

A Legal Workaround for the Two-Month Forfeiture

OPERS retirees can sidestep the forfeiture with a brief cooling-off period at a different employer, since the two-month window applies to any OPERS-covered job, not just the employer the retiree just left.

It’s a simple fix.

Retirees eyeing a return anywhere in Ohio’s public sector should get that timeline in writing before they turn in their last set of retirement forms.