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For example, I worked for the state of Florida for 10 years and part of my pay went to FICA and when I moved north and worked for a state institution in IL they did not collect FICA taxes (i.e., I didn't pay into Social Security) for the two years I worked for the state.
Some think it's good not to pay into Social Security so you have more take home pay but then I think of all those people who worked for the state of IL and the state pension plan has been in shambles in recent years, thereby decreasing your social security benefits or if you worked for the state of IL all your life you haven't contributed to social security at all, and therefore won't get any SS benefits.
But ironically, IL is one of 13 states which don't tax social security retirement income.
Thanks, I just find that a disadvantage for those state employees, like I said particularly in IL if those state employees don't receive their pensions until the state gets out of the hole.
that aside, if you know going into the job the employer doesn't pay into it, it's on you to put money aside for the future, and not getting that amount taken out of your pay gives you more money to invest.
that aside, if you know going into the job the employer doesn't pay into it, it's on you to put money aside for the future, and not getting that amount taken out of your pay gives you more money to invest.
True, you should be saving or investing that money in a manner that reduces your tax liability (pre-tax deductions). Ironically, you gave me a link that shows 13 states that DO tax SS, but the link I gave earlier is 13 states that DON'T tax SS. All different states but ironically there's 13 of each, so what's with the remaining 24.
that aside, if you know going into the job the employer doesn't pay into it, it's on you to put money aside for the future, and not getting that amount taken out of your pay gives you more money to invest.
And good luck with that! Most people will just spend that extra $300 a month take home. Investing, sure. But how much growth will it take to give you $1600 a month for life (plus COLAs) and free part A Medicare?
IME many of the jobs/employers that don’t pay into Social Security are state and local government entities (many are LEO and fire departments) and the idea is that the money will be directed toward a defined benefit pension instead. But that has been evolving and will continue to evolve as those entities switche to defined contribution and TSP-type plans instead of pensions, with Sovial security becoming part of the retirement equation for those employees affected. (i.e., the feds’ shift from CSRS to FERS).
And it can be a very small group within a larger entity. I worked for a state corrections agency. The bargaining unit security staff were in a non-SS plan but the rest of the agency paid into SS.
The folks who are going to have a real problem are the individuals who seek the clergy exception to SS and fail to save anything in lieu.
The folks who are going to have a real problem are the individuals who seek the clergy exception to SS and fail to save anything in lieu.
That has been discussed among many different denominations, especially the Southern Baptist Convention. Non participation in SS also means no disability coverage as well as no retirement coverage.
Some independent churches try to push their pastors into NOT taking social security as it saves them the 7.65% portion of the payroll taxes. However, the pastors that I have counseled have been told to participate in SS unless they are very independently wealthy ... which is unlikely.
By the way, that is just scratching the surface of the issue.
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