If you’re a teacher (or other public servant), you’ve probably seen lots of conflicting information on the topic of Social Security and Teacher’s Retirement. There’s no denying that it’s a complex issue, so in this video we’ll take a closer look at the Windfall Elimination Provision and the Government Pension Offset (the two rules that apply to those with a pension from a job where they didn’t pay into Social Security). Additionally, we’ll dive into a few ways to get around these rules.
These rules are not necessarily limited to teachers, but can also include firefighters, police officers and numerous other state, county and local employees.
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⚠️I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government. I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors. 🙇🙇🙇🙇🙇
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Teacher’s Retirement & Social Security [Complete Guide]
There are unique retirement planning challenges that teachers face that many other professionals don’t. This includes things like state-based pension plans, Social Security, and the potential impact of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
This complete guide will help teach you how to navigate this complex landscape and make the most of your retirement benefits as a teacher.
Understanding Your Teacher’s Retirement Plan:
Many teachers have access to state-based pension plans rather than Social Security. These plans often offer a higher benefit than what Social Security provides, assuming you have worked full time for the State for a number of years.
However, this pension does not always cover all of the retirement needs of teachers. This is where Social Security can come into play.
Social Security and the Windfall Elimination Provision (WEP):
The Windfall Elimination Provision is a rule that affects how your Social Security retirement or disability benefits are calculated if you receive a pension from work not covered by Social Security. Teachers, along with other public employees, are among those affected by this provision.
Understanding how the WEP affects your Social Security benefit is crucial to retirement planning. Speak with a financial advisor or use Social Security calculators to understand the potential impacts on your retirement income.
Social Security and the Government Pension Offset (GPO):
The Government Pension Offset affects benefits for those who are entitled to Social Security benefits based off of their spouse’s or former spouse’s work record. Just as with the WEP, it’s important to understand the potential impacts of the GPO on your Social Security benefits as a teacher.
Maximizing Your Retirement Benefits:
For teachers, maximizing retirement benefits includes understanding both state-based pension plans and Social Security. This might include strategies such as working additional years to increase your pension benefit or delaying Social Security benefits to maximize your monthly income.
It’s crucial to consider the potential impacts of the Windfall Elimination Provision and the Government Pension Offset on your retirement income when making these decisions. Working with a financial planner or consultant experienced in teacher retirement and Social Security can help you make the best choices for your situation.
In conclusion, teachers face unique retirement challenges with their state-based pension plans and Social Security benefits. Understanding the potential impacts of the Windfall Elimination Provision and the Government Pension Offset on your retirement income is crucial for maximizing your benefits.
If you’re a teacher planning for retirement, it’s important to seek out professional guidance to help you navigate these complex issues and make the most of your retirement benefits. By doing so, you can better prepare for a comfortable and secure retirement.
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Thank you Devin for this video. My wife is a teacher here in Texas and will retire in December.
We paid a TRS/SS expert to go over our retirement estimations and she explained how SS will be reduced for my wife, greatly, for the years she worked paying into SS.
I was upset about that but my biggest concern was the survival benefit that is rightfully mine/ours on the money that I paid into SS, that for some reason SS will not pay her upon my death. This infuriates me to no end, that's money is due me but the government will steal it from my widow!
Is there any movement happening to correct this?
Can you explain their thinking of how they think it's better to keep the money that I earned and we both sacrificed for and will help a widowed teacher, and use it for Lord knows what?
I wonder what the incentive for being a teacher is in their eyes.
I worked 30+yrs and have my full points w/ SS, and have taught the past 8 yrs contributing to TRS… keep it simple for stupid here… do I get my full SS benefit and TRS or is something reduced?
ASK THE REPUBLICAN PARTY WHY THEY KEEP BLOCKING EVERY BILL TO MAKE BILLIONAIRES PAY TAXES BUT THE REPUBLICAN PARTY WILL MAKE THE WORKING POOR AND MIDDLE CLASS AND SOCIAL SECURITY DISABILITY BENEFITS AND ENTITLEMENT PROGRAMS PAY TAXES BUT NOT THE BILLIONAIRE ASK THE REPUBLICAN PARTY WHY THEY KEEP BLOCKING BILLS THAT THE DEMOCRATIC PARTY FROM PASSING AMERICA ASK THE REPUBLICAN PARTY HELLO OR ARE YOU IGNORANT AMERICA
What will happen if the wife pays into social security but gets in divorce 1/2 pension from the teacher's retirement that he did not pay any social security. Would the allowance be received from the ex-husband person with her social security benefits?
Explain to me why I am being penalized when I paid into Social Security. I am a higher education educator and for 17 years I paid into social security and I also worked as a nurse. So why will I not receive both my pension and social security.
Hi I am a divorced, and working for TRS for past 6 years. Previously I worked and paid SS benefits, worked 23 years and paid ss, have enough credits, however, I still work part time, and paying ss but not much, I need to find out how it is going to affect my SS, I am 64 now, still willing to work for school district, and in retail, my spousal benefits are going to be higher than my ss benefits, if I retired at age 69 it will be 10 years of TRS…..is it going to reduce my monthly payment of pension? Should I start collecting my ss now and continue working both jobs, retail and School district, and switch spousal benefits at my full FRA age? Also a my spouse is not collecting his benefits, waiting till 70 . Do I get half of what he gets at age 70?
Hello. Question. I am almost 65. I retired last year from TRS after working 18 years and I earn 1950.00/month. I had previously worked paying taxes with Social Security in and out and I only have accumulated 24 points with Social Security. What do I need to do to avoid getting penalized ? I believe I'm healthy and really don't take medications. So the idea in mind is to try to pay the least ammount on health inssurance do you have any advice for me? Thank in advance.
I worked for 17 years in another field full time. My maximum amount they will take out I think is 500 dollars less. I calculated in future dollars with a retirement age at 70 and I would get 1700 which would cover my mortgage. Our government really hates teachers.
The government makes this way more complicated than it has to be.
Devon I have some money in California State Teacher Retirement system but not vested for pension just for withdrawal. I have 7 years in Arizona state teacher retirement. I am going back to work full time as a teacher. I dont know if I should stick with Arizona State teacher Retirement system or go and get some pension points from a different state. I know better then to go back to California state teacher retirement system. Do you have any ideas for me?
My mom passed away recently and she was retired, I believe for about the past 10 years and was drawing a pension from TRS in Texas. Her spouse has been gone for over 20 years. I have three other siblings. My oldest brother received a packet from social security, wanting information from all of us like, spelling of our names as its on our ss card birthday and address. My question is, are there any benefits due to be paid out to my mothers surviving children. from TRS or social security . Thank you for your help
Thank you for this. When I try to tell people the predicament I'm in with the WEP and GOP (lucky me falls into both of these without substantial income while working part time to earn my degree, raise a family, and help care for an elderly parent), they look at me and say this makes no sense. You paid into both systems, you should be able to get your full amount from both systems. I agree with their conclusions, but until the WEP and GOP are reversed, here I am stuck in the middle. It is my punishment for going back to school when the state was crying for teachers! When I graduated, they were laying teachers off! UGH! Anyway, I decided to retire last year. Now I at least have a video to share for those who look at me like I'm crazy when I tell them this exists.
I thought I was being clever by rolling over my TRS pension of 11 years to a 401k in order to get full survival benefits and (newly learned) spousal benefits…but what I am hearing from you is that only my contributions will be rolled over and my SS benefits will still use the windfall and GPO rules. You mentioned that rolling over to a 401k is not a good idea. Am I making sense and hearing you correctly. Thanks, Debbie
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I am a teacher who has 23 years teaching in CT. I have been receiving social security benefits from previous jobs since the age of 66. I am now 70 years old, and would like to retire. I would like to know if there is any credibility to the saying that my social security benefits will not be affected because I am 70 years old.
Hello,
I have been a teacher for 31 years in California and plan to retire after 32 years. I have also paid into SS through my 33 years of reserve military service for which I am receiving a pension. (And other odd jobs when I was young) I have never considered SS in my retirement plans however I want to know if I will get something and if so, will it be reduced? My wife also qualifies for SS and she will only retire from teaching after only 5 years so her pension will be very small. My CalSTRS will be close to $6k/month and I have opted to take a reduced amount so that my wife can get 100% of my pension when I die. She will automatically receive 55% of my military pension when I die.
Thank you for the informative videos and your detailed explanations. I am 51yrs of age. have been a homemaker raising children for 26 of those years while having a home based childcare business for 9 of those 26 yrs. I’ve paid little into social security. I am completing my bachelors degree currently and hoped to go into education. I’m now concerned with the retirement aspect of that. In Texas there is a yrs of service/age requirement to equal 90 before you can draw a retirement.At this age would I benefit at retirement age being a teacher
In many counties in the SE, you pay into a pension plan ( well we all did back in the day before they changed things ) AND we paid in to SSA.
GPO is a nightmare for my wife. She is a teacher of 18 years, no social security payments. I paid into social security. We are both retired and getting social security. TRB answers are not consistent and Social Security Office requirement for documentation from TRB to determine GPO leaves us unhappily in the middle. Social Security rules say that GPO will not penalize a teacher if her pension is not based on earnings. Here is the question. Why would a teacher's investment in her own gross pension be factored into GPO and thus reduce her Social Security payments? Investments offered such as 1. Cash to purchase a supplemental annuity at time of retirement 2. Cash to buy additional years of service at time of retirement 3. Voluntary contributions to a fixed annuity account while working based on 1% pretax investment from her salary.
Hi Devin, I am a divorced and single public school teacher of 15 years (5 as an Assistant). I am 52 now. I paid into the SS system for about 15 years prior. I was a stay at home mom for a few years as well. Because I got into teaching later in life, I will never get full pension benefits. I have no debt or assets at this time. Is it at all possible for me to retire at age 55? I think that I am now burnt out of the teaching role.
You did not mention anything about how Texas teachers who retired prior to July of 2004 could possibly use the “last day” exemption for the GPO if they met the requirements.
Why? The "why" is rarely included in discussions of WEP & GPO. Most folks know that income tax has bracket, higher income pay at a higher marginal rate. It is unlikely that anyone at a lower tax rate would want to pay a higher tax rate, right? Realize that SS is similar but reversed.
In the calculation of PIA from AIME, there are three brackets, 90%, 32%, & 15%.
As AIME increases, it moves from the 90% toward the 15%, so the higher income person has a marginally lower benefit. For example, the $12K/year person ($1K/mo) would get about $900/mo PIA, but the $120K/year person ($10K/mo) would get about $2,200/mo PIA; 10 times more paid into SS, but only about 2.5 times the benefit.
Consider the person with both a non-SS job and an SS job. While not contributing to the SS bucket for the non-SS work, the middle class non-SS worker earn a pension and they deserve it. But when they do minimal SS paying work, they have a low AIME and look like a very low income person, not at all like the middle class person they really are.
For example, a 10 year $60K worker (so 25 zeros for the other years while they worked in a non-SS job) looks like a lifetime $18K/yr worker that would get $1060/mo PIA. But include that $60K after their non-SS income as if it were taxed for SS and you get something like $560 of additional PIA.
So without WEP, they would appear to be a low income earner and receive a disproportionally large benefit. With WEP, the mixed SS person is moved along the AIME-PIA curve to a point reflecting their true income. If the AIME-PIA curve were flat there would be no need for this.
AIME is effectively the inflated average lifetime monthly income, but is calculated over your best 35 years. Take all of your prior incomes, index them for inflation, select the best 35 years, add those, and divide by 420 (months in 35 years). PIA is your benefits (at FRA). And FRA is Full Retirement Age.
Regards.