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Something Futuremauian said got me looking into my retirement. This very may be my last year teaching. I worked in the private sector prior to teaching for many years and plan on working until I can work no more, but I think there will be a conflict with PERS and Social Security. I have a 403b and plan on maintaining 401K, but am concerned with the money that I have and will be paying into SS.
Futuremauian responded to a DM I sent about it:
Quote:
My knowledge about this is mostly anecdotal.
One of my friends worked a second job, every summer, that paid almost as much as his teaching job. Because he gets a "full" retirement from CALSTRS, he receives less than $200 per month from SS, even though he paid $1000s into it, over 40 years.
Another friend, who worked most of his life in the private sector, then taught for 5 years, withdrew all of his account from CALSTRS in one lump sum, so he would then be eligible for "full" SS.
A second federal law like WEP also comes into play, but I don't recall the name. There are also variations from state to state. (In Texas, teachers pay into both systems, and then qualify for both retirements.)
It would probably be worthwhile to schedule a meeting with a benefits counselor from your STRS before deciding what to do with the retirement you've accumulated.
I am very concerned about this. One of the supposed benefits of teaching is supposed to be the retirement. If I leave public service now, after 14 years, my retirement won't be that much and I will need every source.
On the second to the last tab, the one that reads, "...and a guarantee" states:
Quote:
If you get a relatively low pension, you are protected. The reduction in your Social Security benefit cannot be more than one-half of the amount of your pension that is based on earnings after 1956 on which you did not pay Social Security taxes.
I am not sure if I am understanding this correctly.
Let's say you receive $1000 per month from your retirement pension and $500 per month from Social Security. Does this mean that you will get nothing from Social Security?
Certainly if you have not been paying in to social security, you have been informed via workshops, pamphlets, something regarding social security windfall elimination provision, if it applies to you?
There is a social security windfall offset calculator somewhere online that we used to figure out the differential before retiring.
I'm not much help, am I? Best of luck!
ps Retirement is great & substitute teaching gives me my kid fix + mad$$. Just bought new skis & boots with my check this month.
Certainly if you have not been paying in to social security, you have been informed via workshops, pamphlets, something regarding social security windfall elimination provision, if it applies to you?
There is a social security windfall offset calculator somewhere online that we used to figure out the differential before retiring.
I'm not much help, am I? Best of luck!
ps Retirement is great & substitute teaching gives me my kid fix + mad$$. Just bought new skis & boots with my check this month.
We have received pamphlets and are required to watch the same video at regular intervals that tell us that our retirement income will not be adequate and that we should invest additionally in a 403b. If the Windfall Provision was in there, I did not pick up it. In order for that to have happened, it would have to have been glossed over, because if I would have heard/read anything having to do with not receiving the SS that I paid in for, that would have definitely sent up my radar.
We have received pamphlets and are required to watch the same video at regular intervals that tell us that our retirement income will not be adequate and that we should invest additionally in a 403b. If the Windfall Provision was in there, I did not pick up it. In order for that to have happened, it would have to have been glossed over, because if I would have heard/read anything having to do with not receiving the SS that I paid in for, that would have definitely sent up my radar.
We made an appointment & went in to talk with the district retirement counselor- extremely helpful in getting a view of the bottom line.
If you paid into social security 30 yrs. of substantial earning, then windfall does not effect you.
We have received pamphlets and are required to watch the same video at regular intervals that tell us that our retirement income will not be adequate and that we should invest additionally in a 403b. If the Windfall Provision was in there, I did not pick up it. In order for that to have happened, it would have to have been glossed over, because if I would have heard/read anything having to do with not receiving the SS that I paid in for, that would have definitely sent up my radar.
I just finished reading the Wikipedia version of WEP's effect, then went to the SS website. It is so complicated that I still don't have a clear understanding.
When I met with a CALSTRS (CA. State Teacher Retirement System) benefits counselor late last year, I learned a lot that I didn't know. Unfortunately, I didn't ask about this issue, since I don't qualify for SS.
I started teaching full-time in 1985. At that point, California teachers didn't pay into Medicare or SS. That same year, we were offered the opportunity to join Medicare only, but I didn't understand the ramifications, and believed I was already qualified, due to past work. When Social Security begin sending annual "report cards", I discovered that I don't qualify for Medicare. Many of the jobs I held earlier in life did not deduct for it. As a result, I have 33 quarters (quarter-years) of Medicare credit, and need at least 40 to qualify. I asked about joining later, and was told "no". For me, this means I will need to find another job after I retire from teaching (sub or tutor, possibly?), to earn at least 7 more credits. If I don't do that, at age 65, I will cease to have ANY medical insurance.
Everything to do with govt. pensions is complicated, and include a myriad of "factors" that must be taken into account for each individual. (Spouse? Kids? Options? Etc.)
The benefits counselor I visited, asked me to encourage all of my fellow teachers to come in early to create plans for their futures. As she pointed out, once you are close to retirement, it is too late to establish a 403B or other supplemental income source. She added that their offices tend to be "slow" in the summer, which is a good time for most teachers. In Ca., there is no charge for this. I would imagine it's free in other states as well.
BTW: It's interesting to note that the WEP was passed by Congress to prevent public employees from "double-dipping". Who is more famous for double, triple, or more, "dipping" than Congress???
One final thought: Retirement formulas vary from state to state. Take the time to become familiar with yours. In Ca. our retirement almost doubles between age 55 and 60. Most people here don't seem to realize that, and think they will quit at 55. It can resign you to a life near poverty.
"(In Texas, teachers pay into both systems, and then qualify for both retirements.)"
Not true. Most districts here pay into TRS, only a few pay into SS.
Thanks for responding!
I read that in a lengthy newspaper article comparing teacher retirements and later, heard it from a friend who moved there. So is it TRS or SS only? Or do a "few" pay into both?
Thanks for responding!
I read that in a lengthy newspaper article comparing teacher retirements and later, heard it from a friend who moved there. So is it TRS or SS only? Or do a "few" pay into both?
Most pay into SS. In San Antonio (where I am), only 1 (non military)district actually pays into SS instead.
Something Futuremauian said got me looking into my retirement. This very may be my last year teaching. I worked in the private sector prior to teaching for many years and plan on working until I can work no more, but I think there will be a conflict with PERS and Social Security. I have a 403b and plan on maintaining 401K, but am concerned with the money that I have and will be paying into SS.
Futuremauian responded to a DM I sent about it:
I am very concerned about this. One of the supposed benefits of teaching is supposed to be the retirement. If I leave public service now, after 14 years, my retirement won't be that much and I will need every source.
On the second to the last tab, the one that reads, "...and a guarantee" states:
I am not sure if I am understanding this correctly.
Let's say you receive $1000 per month from your retirement pension and $500 per month from Social Security. Does this mean that you will get nothing from Social Security?
The second law that affects pensions, is called the GPO, or government pension offset. I couldn't think of the name earlier. Fortunately, it appeared in a link provided by Pobre. This too, can affect your retirement income.
Thanks!
It is so complicated that I still don't have a clear understanding. BTW: It's interesting to note that the WEP was passed by Congress to prevent public employees from "double-dipping". Who is more famous for double, triple, or more, "dipping" than Congress?
I've heard this also about the original intent.
This is concerning and, at least in CA, the information given at the seminars offered isn't always very clear. We had an AP who had worked in the private sector for years before going into education and he said he was not eligible to receive Social Security. Apparently it depends on the amount one makes in the private sector. This is one huge negative about entering teaching in mid-life.
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