How is Ohio for retirement?

When it comes to finding the perfect state for retirement, Ohio does not often make it to the list as much as Florida and Delaware. The “Buckeye State” is a hidden gem, and it is a friendly place to retire for people looking to explore outdoor activities, arts, sports, and Midwestern hospitality. As the birthplace of seven presidents and 10 astronauts, there is so much to learn about Ohio.

Ohio is a good place to retire if you are looking for a state with an affordable cost of living, affordable housing costs, world-class healthcare, good weather, and favorable taxes. The state does not tax Social Security retirement income, while retirement incomes like pensions and retirement plan distributions are taxed as regular income at the state income tax rates. Property taxes are relatively high at 1.41%,  while the combined state and local sales taxes can go up to 7.25%.

Is Ohio tax-friendly for retirement?

Ohio is a moderately tax-friendly state for retirees. While the state exempts Social Security from state income taxes, other retirement incomes like pensions and 401(k) distributions are taxed as regular income at the state income tax rates but may still qualify for tax credits.

If your annual retirement income exceeds $100,000, you can claim a credit of up to $200. If you are age 65 or older and your modified adjusted gross income is below $100,000, you can claim an additional $50 credit. Ohio has a graduated individual income tax rate ranging from 2.765% to 3.99%. Local governments may also levy local income taxes.

How much are sales taxes in Ohio?

The statewide sales tax rate is 5.75%, while counties and cities may collect an additional sales tax of up to 2.75%. The average combined state and local sales tax rate is 7.24%, putting Ohio among the states with the highest sales taxes in the nation. The state also collects a gasoline tax of 38.51¢ per gallon, and 47.01¢ per gallon of Diesel.

Seniors may benefit from various sales tax exemptions on select goods. For example, groceries, clothing, motor vehicles, and prescription drugs are exempt from state income taxes.

How much are property taxes in Ohio?

The average effective property tax rate in Ohio is 1.41%, which is higher than the national average, currently at 0.99%. You can expect to pay a median property tax of $1,406 per $100,000 of the assessed property value.

Senior homeowners may also be eligible for the Ohio homestead exemption. To be eligible for the homestead exemption, you must be age 65 or older, and your adjusted gross income should not exceed $34,600 in 2022, or $36,100 if you are applying in 2023. You can also qualify for the exemption if you are permanently disabled or a surviving spouse of a deceased homeowner who previously received the exemption.

The homestead exemption allows homeowners to deduct up to $25,000 off the market value of their home. For example, a homeowner with a home valued at $150,000 can deduct $25,000 off their property value, meaning they will only pay property taxes on $125,000 worth of the property.

Pros of retiring in Ohio

Affordable cost of living

Ohio boasts a lower cost of living compared to other neighboring states like Kentucky and Michigan, making it a good place to retire on a budget. You will generally pay less for groceries, rent, transportation, utilities, and healthcare services.

Four seasons

If you want to experience the beauty of all four seasons, you will get it all in Ohio. Summers are typically warm and humid, fall has colorful foliage, winters are generally cold with snowfall in January and February, and spring brings blossoming landscapes.

World-class health

Ohio has an excellent network of healthcare facilities, including the world-famous Cleveland Clinic, Christ Hospital, OhioHealth System, and several university-affiliated healthcare facilities. The state also has a large number of doctors per capita.

Top Universities

Ohio is home to several prestigious universities that bring a youthful culture, and opportunities for lifelong learning. Some of the top universities include Ohio State University, Miami University, University of Dayton, and Kent State University.

Sports culture

If you are an enthusiastic sports fan, you will find a lot of excitement (and heartbreaks) in Ohio. There are several professional and college sports teams with a strong fan base. It hosts teams that play in the NBA, NFL, NHL, and MLB leagues.

Lots of outdoor recreation

It is easy to live an active lifestyle in Ohio, due to the easy access to outdoor recreation. You can go hiking, mountain biking, and trekking in the mountains, or go fishing, canoeing, and kayaking in the many stunning rivers and lakes. Also, there are many state parks and museums like the Rock and Roll Hall of Fame that you can explore.

Craft brew scene

Ohio has more than 360 breweries dotted across the state, and you will find a wide variety of beer brands and flavors to try. The state is ranked the fourth largest beer producer, and it also contributes greatly to the Ohio economy.

Rich history

If you enjoy history and want to learn about major moments in the world and American history, you will find plenty of history in Ohio. As the birthplace of seven presidents, you can discover and explore the presidential library and museums. The state is also home to 10 astronauts, including Neil Armstrong and John Glenn.

Cons of retiring in Ohio

Harsh summers

While Ohio may not be as hot as Florida, you will typically encounter hot and humid summers from June through to September. Temperatures can often peak to triple-digit numbers, which can often be uncomfortable if you are not used to the high temperatures.

Harsh winters

Winters in Ohio can be brutal, with cold temperatures, plenty of snow, and ice that makes it difficult to explore the outdoors. January is usually the coldest month, and it gets worse as you move further north closer to Lake Erie due to the lake effect snow.

Limited public transport

You will find public transportation options like trains and buses in the three big cities, but they are not as extensive as in other states. If you plan to use public transportation in retirement, you will find it more difficult to get around. You may want to get a car, especially if you plan to retire in rural Ohio or outside the major metropolitan areas.

Political battleground

Ohio is considered a toss-up state, and it is politically divided. During big election years, the political divide brings national attention to the state, and you can expect a lot of lobbying and campaign ads from both Democrats and Republicans. 

No ocean living

The state does not have access to the ocean, and the only large water body is Lake Erie along the northern border. There are large water reservoirs around the state, but most are surrounded by parks and nature preserves. If you want to spend time at the beach but close to the Buckeye State, you can travel to Myrtle Beach, Virginia Beach, and Ocean City.

Natural disaster

While natural disasters like tornadoes and flooding are not as common in Ohio, the state is not immune to these disasters. You should stay alert and watch out for emergency services communications.

Best places to retire in Ohio

Cincinnati

Cincinnati is ranked among the most affordable cities, and you will pay below average cost for groceries, utilities, health, and transportation. Housing costs are also affordable, with median house prices at $167,000 and median rent prices at $1033 per month.

There are many activities to explore, including visiting nearby parks, local attractions like Cincinnati Zoo and Botanical Gardens, or participating in community events. The downtown area has a thriving arts scene, boutiques, bars and restaurants, and shopping centers.

Dayton

If you prefer a more relaxed pace of life, Dayton is an excellent option. You can choose to retire close to the Downtown area or move to a quieter neighborhood outside the city. You will find a range of attractions, including the National Museum of the United States Air Force and the Broadway Theater. You will also find shops, restaurants, and entertainment centers in the downtown area. Dayton has good healthcare facilities like Kettering and Miami Valley.

Columbus

Columbus is the state capital and the most populous city in Ohio. The city has an energetic atmosphere, and you will find dining options, dance clubs, museums, art galleries, and theatres, etc. Columbus is home to Ohio State University, which has many events that are open to the public; it offers opportunities for lifelong learning, and seniors are given a chance to audit classes and attend lectures.

Oxford

Oxford offers a small-town vibe, but it is still close enough to Cincinnati, which has big-city amenities and entertainment options. It hosts Miami University, which provides a vibrant and youthful atmosphere; retirees can attend university events like lectures and sports events. The city’s tree-lined streets, green spaces, and historic architecture create a picturesque setting for the town residents.