Many educators that participate in the Teacher Retirement System of Texas (TRS) are unaware of two provisions of Social Security Law that affect their social security benefit. Show
The two provisions are the Government Pension Offset and the Windfall Elimination Provision. Most school districts in Texas only withhold for TRS and their teachers do not pay into Social Security, which means these provisions apply to most Texas teachers. A few districts in Texas and most higher education institutions pay into both TRS and Social Security, in which case these provisions will not apply. Windfall Elimination Provision The Windfall Elimination Provision (WEP) can lower an individual’s social security benefit that they would receive from their own previous work history paying into social security. WEP would apply to teachers who worked in other careers prior to teaching or during the summers and could reduce their social security benefit by as much as $498 per month.* Government Pension Offset The Government Pension Offset (GPO) affects an individual’s potential spousal or survivors benefit that they would receive from their spouse’s social security work history. Typically, an individual can claim 50% of their spouse’s social security benefit as a spousal benefit while their spouse is alive and can claim 100% of their spouse benefit as a survivor benefit upon their spouse’s death. If the individual receives a pension from employment not covered by Social Security, such as TRS, their spousal and survivor’s benefit will be reduced by as much as 2/3 of their TRS pension. Planning Ahead Know if the WEP and GPO apply to you Check with your Human Resources department if your employment is covered by just TRS or both TRS and Social Security. Remember if you pay into both, WEP and GPO do not apply. Another quick way to check is by looking at a recent pay stub. If you pay into both, you should see deductions for Social Security and TRS. Earn 30 years of Social Security work history WEP does not apply to individuals who have 30 years of substantial social security work history and is reduced for those with 20 or more years. For teachers that have consistently worked over many years during summers or have earned income outside of their TRS employment for many years, there may just be a few years left to reach this 30-year threshold. Earning income from a Social Security covered job for a few more years after retirement can reduce the effects of WEP or eliminate it altogether. Save to supplement retirement income If you are a teacher affected by WEP and GPO, consider being proactive and save an additional bucket of funds to supplement your retirement income. Many school districts offer 403(b) qualified plans. These retirement plan types allow you to defer a portion of your income tax-deferred until retirement. In 2021, you can defer up to $19,500 a year ($26,500 a year if you are age 50 or over). Depending on the 403b Plan Provider, these funds can be invested in either mutual funds or annuities, with the potential to grow during the deferral period. To learn more about the GPO and WEP, you can visit the Social Security Administration website at the link below and contact our office. We would be happy to help you determine if these two provisions apply to you and can help develop a savings strategy and financial plan to mitigate their effects. *Please see the chart published on the SSA website linked here for the Maximum Monthly Amount Your Benefit May Be Reduced Because Of The Windfall Elimination Provision (WEP) https://www.ssa.gov/benefits/retirement/planner/wep.html#limit https://www.ssa.gov/benefits/retirement/planner/wep.html Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with eh tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. By working in a position that is not covered by Social Security, the pension you receive (if eligible) may reduce any Social Security benefits you may also be eligible to receive. Examples of positions not covered by Social Security include many federal, state and local government jobs. Any “public-service” position in Ohio that contributes to: the State Teachers Retirement System (STRS Ohio), the Ohio Public Employees Retirement System (OPERS), the School Employees Retirement System (SERS), the Ohio Police & Fire Pension Fund or the State Highway Patrol Retirement System falls into this category. Because your STRS Ohio pension is not from a job covered by Social Security, any Social Security benefits you and/or your spouse may be eligible for from other employment may be reduced by the Windfall Elimination Provision (WEP) and/or the Government Pension Offset (GPO). Please note that regardless of which provision may apply to your situation, as an STRS Ohio retiree your STRS Ohio retirement benefit will not be reduced. Windfall Elimination Provision (WEP)Government Pension Offset (GPO)The Government Pension Offset applies only if you receive a pension for work not covered by Social Security and are eligible for Social Security benefits as a spouse or widow(er) (i.e., dependent’s benefits). Under this provision, your Social Security dependent’s benefit will be reduced by two-thirds of the amount of your government pension. Under the GPO it is possible for a spouse’s or surviving spouse’s benefit to be totally eliminated. For more information about the GPO and how it might affect you:
Additional Questions About Social SecurityIf you have additional questions concerning these two provisions or any other Social Security-related questions, contact the Social Security Administration in one of the following ways:
Please have your Social Security number handy when you call them. Can Texas teachers draw Social Security and teacher retirement?Texas educators eligible for both a spousal or widow/er Social Security benefit and their own TRS pension benefit are subject to the GPO. The GPO reduces the amount such educators are eligible to receive as a spousal or widow/er Social Security benefit by two-thirds of the amount of their TRS pension benefit.
Why do Texas teachers not get Social Security?Most of the public school districts in Texas have TRS as their pension but do not pay into Social Security. So these teachers will get no benefit from Social Security or a significantly reduced one if they haven't paid into it before or after being a teacher. For many teachers, this seems unfair.
What is the most you can get from Social Security when you retire?The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2022, your maximum benefit would be $3,345. However, if you retire at age 62 in 2022, your maximum benefit would be $2,364. If you retire at age 70 in 2022, your maximum benefit would be $4,194.
Do Florida teachers get Social Security and pension?If you are a teacher in Florida, you are likely part of Florida's state pension retirement system. It allows you to access retirement benefits as soon as you hit retirement. Throughout your career, you contribute a small amount to your district's pension plans.
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Can you collect social security and teacher retirement
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