This supplemental retirement savings program allows eligible Ohio public employees to set aside a portion of their salary before taxes. These pre-tax contributions grow tax-deferred, meaning taxes are not paid until funds are withdrawn, typically in retirement. For example, a portion of an employee’s paycheck designated for the plan is deducted before income taxes are calculated, reducing current taxable income. This program offers several investment options, allowing participants to select investments that align with their individual risk tolerance and financial goals.
A key advantage of this type of program is the potential for greater long-term savings due to the tax-deferred growth. By reducing current taxable income, participants can potentially lower their annual tax burden. Furthermore, the availability of diverse investment options allows for personalized portfolio construction. Historically, these programs have become increasingly popular as individuals seek greater control over their retirement planning and aim to supplement traditional pension plans.