Do you pay into Social Security at work?

[Cindy B]

He teaches in Bexar County which isn't close to any of those counties. He has never taught anywhere close to those counties. He started in Webb County in Laredo in 1990 and didn't pay into SS there and then in 1994 we moved to San Antonio. He doesn't pay into SS here either. I work for the State of Texas and started in 1994 and I do pay into SS as well as to the state pension plan.

Hmm.. like I said before, not too familiar with Texas teachers. Ihve seen some of claims in class, but nothing often. I have analyzed examples but not actually worked Texas teacher claims. (studied them in class) Wish I could tell you more.

Nope. She worked a total of two years when she was young, then she stayed at home for quite some time, returned to work in the early 80s, and worked until just a few years ago. You may be well informed about Social Security as a whole, but I'm not wrong about what's going on in my own family. We talked about it when she retired, and I know what's going on with her situation.

Interesting. The old timers in the office talk about how the municipalities/states changed once the withholding rules went into effect. . I will say on the whole it is odd that my cubemate won't get a SS check and I will.

My husband works for the railroad and they do not pay SS. They pay into a railroad account. Once he retires, he will not be eligible for anything but that. Then once I retire, I will get SS plus 1/2 the amount that he gets from the railroad. I guess they figure they should compensate the spouses for the crazy schedule they have to work.

The railroad system is very generous. I do get the dual claims.. spouse with ss and 1/2 the RR claims.

 

[speedyf]

I always wonder if these articles about the savings rates in America include 401k and other retirement accounts. I work in Payroll at my company and just about everyone that qualifies is in the 401k program. I understand that not all companies offer 401k, but even lower paying jobs like Wal-Mart and McDonalds offer some type of stock plan. Does this count as savings? I wonder if they are just looking at actual savings accounts and bypassing these other methods of saving. No one is saving in saving accounts anymore...because they pay .00005%. Then, they try to hit you up with fees and you end up losing money in some cases. Of course, when savings accounts were paying 15% interest back in my childhood days, then I'm sure everyone was saving that way rather than in the stock market.

Another point about Social Security...my opinion anyway. I was all for the proposal to take a portion of your social security contribution and privatize it. I was hoping that around 2% of the 12.4% (we pay 6.2% and our employer pays 6.2%) would go into a private fund for each taxpayer. I was thinking that if I pay Social Security tax and work for 50 years of my life and then drop dead the day after I retire, I will have basically thrown all that money away. But, if at least 2% of the 12.4% were going into some type of private account, I could at least leave part of all the thousands of dollars that I paid into Social Security to my kids.

I guess no one ever talks about that aspect much...paying in from age 16 until age 66 and then dying before you get a chance to collect anything back. If you average $40k over a 50 year span, you have paid (along with your employer) around $248,000 to Social Security. If 2% out of the 12.4% were going into a retirement fund, you would have $208,000 paid to the government and another $40,000 in that fund...plus interest or earnings over 50 years. If you pass away and your spouse passes away, at least the $40,000 that you worked your butt off for 50 years could be left to your children.

Just my opinion....if you're going to make part of social security a "forced" retirement plan, then why not let it "act" as a retirement plan and give people the ability to pass the money down to their kids if they pass away.

Speed

 

[buzz5985]

Not everybody. Teachers, Federal and State workers have always been exempt.

Federal workers before 1984 covered under the Civil Service Retirement System. They do pay into Medicare.

Federal employees hired after 1984 - pay into SS. They have a retirement plan called the Thrift Savings Plan - similar to a 401K.

Janis

 

[buzz5985]

im a fed employee and i pay out into SS every pay as well. However if you were under the old federal retirement plan CSRS you do NOT pay into Social Security. There are some old timers here that don't pay into SS.

I'm one of those old timers - I just turned 50. LOL

 

[aubriee]

Working at a county-owned hospital, I don't pay into Social Security, but I do pay into OPERS (state retirement plan).... overall, it's a much better retirement plan anyway, so I'm hoping I can stick with it till I retire. Get 100% of retirement benefits after 30 yrs of working (no matter your age).

But on top of that, I do put money into a deferred comp program as well, so by retirement age, that account should help out a great deal also.

I work for a state hospital. We have to pay into our state retirement plan, but also must pay into Social Security. Until I saw this thread, I thought everyone did. Every job I've ever had, the employer just automatically took SS out. It was never a choice.

 

[racefanof88]

My husband and I have paid SS for the past 30 years and had no choice in the matter. I have a 401K at my job but DH has no retirement at his now. He works for a very small family owned business and they tried to start a retirement account 10 years ago and it lasted about 2 years and then they stopped it. I save as much as I can in my 401, but with the economy as bad as it is I had to decrease my contributions. I normally increase my contributions every year when we get our annual raise, but last year we didn't get a raise, our health insurance went up and they cut out all extras......attendance bonuses, Christmas and Thanksgiving turkeys...... EVERYTHING extra went away. I don't have more money to put in my savings, I have to feed my children now and I may not live to draw retirement, if I don't eat now I defiantly won't. The media keeps saying the economy is getting better, but from where I stand I don't see it .

 

[MrsPete]

Of course, when savings accounts were paying 15% interest back in my childhood days, then I'm sure everyone was saving that way rather than in the stock market.

Yes, investments are more complicated today, and investors today have better information readily at their fingertips. I agree that today's passbook savings are a disappointment, but everyone should have SOMETHING in those accounts; that is, an emergency fund that's readily accessible. In an emergency,invested money can't be touched at a moment's notice.

I was thinking that if I pay Social Security tax and work for 50 years of my life and then drop dead the day after I retire, I will have basically thrown all that money away.

You're exactly right. It's quite possible that some of us will pay into Social Security for years and years, and only draw for a short period of time. If that happens, it's a rotten investment.

But there's another side of that coin: What we think of as Social Security also pays Disability and Children's benefits. So if you suddenly became disabled in your 20s, you could potentially collect for 50+ years after having paid only a short time. Or, if you were to die young, your surviving children could collect on your benefits until they turn 18. In those situations, you'd probably collect WAY MORE than you ever paid in.

Social Security is more like a traditional pension plan than an investment. It's going to pay X amount for as long as you live. People who live a long time will make out like bandits; people who die young will lose. Since none of us can control what we'll get, it's not something to waste time worrying about.

 

[bettymae1121]

I always wonder if these articles about the savings rates in America include 401k and other retirement accounts. I work in Payroll at my company and just about everyone that qualifies is in the 401k program. I understand that not all companies offer 401k, but even lower paying jobs like Wal-Mart and McDonalds offer some type of stock plan. Does this count as savings? I wonder if they are just looking at actual savings accounts and bypassing these other methods of saving. No one is saving in saving accounts anymore...because they pay .00005%. Then, they try to hit you up with fees and you end up losing money in some cases. Of course, when savings accounts were paying 15% interest back in my childhood days, then I'm sure everyone was saving that way rather than in the stock market.

Another point about Social Security...my opinion anyway. I was all for the proposal to take a portion of your social security contribution and privatize it. I was hoping that around 2% of the 12.4% (we pay 6.2% and our employer pays 6.2%) would go into a private fund for each taxpayer. I was thinking that if I pay Social Security tax and work for 50 years of my life and then drop dead the day after I retire, I will have basically thrown all that money away. But, if at least 2% of the 12.4% were going into some type of private account, I could at least leave part of all the thousands of dollars that I paid into Social Security to my kids.

I guess no one ever talks about that aspect much...paying in from age 16 until age 66 and then dying before you get a chance to collect anything back. If you average $40k over a 50 year span, you have paid (along with your employer) around $248,000 to Social Security. If 2% out of the 12.4% were going into a retirement fund, you would have $208,000 paid to the government and another $40,000 in that fund...plus interest or earnings over 50 years. If you pass away and your spouse passes away, at least the $40,000 that you worked your butt off for 50 years could be left to your children.

Just my opinion....if you're going to make part of social security a "forced" retirement plan, then why not let it "act" as a retirement plan and give people the ability to pass the money down to their kids if they pass away.

Speed

That actualy happened to my mother, she took early SS payments at 62, collected about 4 checks and then died of cancer.

But then I look at people like my grandmother, she's going on 93 and has been collecting for almost 30 years now. Heck she may be at the point where she's collected more than she and Grandpa ever paid in, so she comes out ahead.

I understand the theory of privatizing SS, either whole or in part, but I just think it's a bad idea. The average person has no idea how to invest properly. Just look at how many people got wiped out last year when the bubble burst. SS is supposed to be 100% safe, no matter WHAT else happens with the economy, banks, stock market, or even if your mattress stuffed with $50's burns up! SS may not be much, but it's still better than nothing if things get wiped out.

Speaking of "living" on SS, it actually can go a lot further than one thinks, at least as it is today, depending on the rest of your financial picture. My father is retired, owns his (very nice) house and his (very very nice) car out right, in fact he has no debt at all. He lives in a low COL area and his SS check coveres his monthly epxenses just fine. He only has to dip into his retirement account for special things like trips, home improvement projects, things like that. Same with my grandmother that I mentioned earlier. She still gets Grandpa's pension (he died over 20 years ago) plus SS. She banks one and lives off the other! Again she owns her condo outright and lives modestly (by choice too, she could have a million dollars in the bank and she wouldn't change her lifestyle one little bit).

So even if my father's investments became worthless, or my grandmother's pension dried up, both could basicly continue to live just fine off of SS. They wouldn't have much cushion, my dad would have to stop taking trips and perhaps downgrade to a less expensive car, but they'd do okay just on SS because they don't have any debt and live in less expensive areas. As far as a safety net goes, one could do worse than a SS check, at least in their situations.

 

[Kathi OD]

I'm a teacher and pay SS and into the state teachers' fund. So I guess it really does matter where you are a public employee.

DH used to work for CONRAIL and he paid RRT (Railroad Retirement Tax) instead of SS. Not quite sure how those contributions are counted once he actually retires.

Our retirement plan got completely sidetracked in June 2008 when DH's company closed and he's been unable to secure a job since. We were on track to pay off our house before either one of us retired (in about 12 years), but we may have to start hitting the savings we had for retirement just to make our monthly bills if he isn't able to find something soon.

 

[brerrabbit]

The counties mentioned in Texas that are exempt only include the county and city workers. Teachers in Texas are employed by Independent School Districts and covered by Texas State Teachers retirement. My MIL worked for county and state hospitals her entire career and collects from TSTR and SS. I am not sure but the SS may come as a result of her husband who died in 1964. At one time Galveston County which was the first to opt out of SS was the poster child for such a program and were even featured on 60 minutes and some other news magazine type shows because the returns they were making were huge. Therefore their benifits were going to far exceed what ss would have paid. Due to some investment loses and the over all economy the numbers have come back closer to SS.

DW worked for 10 years in the corporate world before staying home with the kids so she qualifies for SS but went back to work in our local school district five years ago and is now builind a Teachers retirement. I hope we get both or at least the chance to choose the larger of the two in retirement. Her SS will be capped when combined with mine because they limit the amount any one family can collect which in many ways is unfair. Based on my latest statement from SS I have pai a lot into the program and if I take a conservative interest rate applied to the amounts paid in over the years and look at what I have in the system it is a huge amount of money. More than I will every see in return in my estimate unless I live to be 100.

But overall I am extremely fortunate to be where I am. My employer puts 10% into my 401 K even if I contribute nothing. I do also contribute so thats making that account grow quickly. Beyond that we also have a traditional retirement account that the company funds 100% of. So if I can just make another 10 years I should do okay in retirement but given the current economy 10 years sounds like forever.

 

[speedyf]

That actualy happened to my mother, she took early SS payments at 62, collected about 4 checks and then died of cancer.

But then I look at people like my grandmother, she's going on 93 and has been collecting for almost 30 years now. Heck she may be at the point where she's collected more than she and Grandpa ever paid in, so she comes out ahead.

I understand the theory of privatizing SS, either whole or in part, but I just think it's a bad idea. The average person has no idea how to invest properly. Just look at how many people got wiped out last year when the bubble burst. SS is supposed to be 100% safe, no matter WHAT else happens with the economy, banks, stock market, or even if your mattress stuffed with $50's burns up! SS may not be much, but it's still better than nothing if things get wiped out.

While I do agree that most people don't want to try to figure out complex investments, I would think that the government could make it easy by having the money invested in something that is safe.

So...even if the money was invested in something that pays 4% interest, it would still "act" like a retirement account...meaning you could pass it on to your kids, spouse, etc. I would still feel better if I had an account with my name on it accumulating money that could be left to my kids or spouse if I pass away too soon.

Heck..if government wants to take over our health care, why can't they take part of Social Security and "force" us to save money for our future.

If Social Security acts like a big insurance policy (disability, early death benefits for underage children left behind, etc)...then why not have it act as an insurance policy that has partial cash value.

Also...sorry about your mother.

Speed

 

[The Iron Giant]

If Social Security does get phased out for all but lowest incomes I really hope that the government at least comes up with some tax breaks for anyone who paid in and won't be getting anything out.

 

[Katnmouse]

Been a public school teacher for 19 years and have NEVER been told I was exempt. It's always been required PLUS I am paying into a state retirement plan!

I too am a TN teacher and so was my mother. As a new TN teacher in the 1950's my mother was able to opt out of paying ss, but that option has been long long gone. We pay into both state retirement and federal ss...what do you want to bet we won't be allowed to benefit from both when the time comes.