Do you pay into Social Security at work?

[Calliaz]

It isn't just a certain class of people, i.e. teachers, that are exempt. The employer must qualify to be exempt and choose to do so. My husband worked for an employer where he and they both paid into a 403b instead of SS. The employer recently decided to switch and now those employees and the employer pay into SS.

My DH will have enough time worked to qualify for SS even though he worked 5 years at an employer where he did not pay SS tax.

 

[bettymae1121]

I WISH I could opt out of SS. That is money I will never see.

The person who thinks it will be fixed- only by borrowing more. Contrary to what our government seems to think, the line of credit WILL be cut off eventually and they will HAVE to stop spending somewhere.

Anyone under 30 ( optimistically) who is counting on having SS when they retire is kidding themselves.

They've fixed it in the past (last time was under Reagan, I believe) so no reason to think they won't again. I all our country's history, we've always had deficits and always had debt (except for a year or two in the 1800's) so going with past history, I think it's a safe bet. Guaranteed? No, but then nothing in life is guaranteed.

I'm not going to solely count on SS, just like I'm not going to solely count on any one income source. But I'm factoring in SS to my overall retirement picture because I feel the odds are good it will be there in some form by the time I'm 62 (I'm 34 now). If it isn't, while I'll be a bit peeved and I won't have quite the income I had expected, it won't change my overall retirement all that much either, because I'm still plowing money into my 401k. I like the idea of having both. If SS goes defunct, I have my 401k and if my 401k goes bust due to bad market conditions, I'll have SS as back up. If both go then I'm up a creek but then so is everyone else, I guess, and the odds of both happening are low enough that it's not even on my radar.

Whether you have a union pension, state pension, company pension, or any other type of pension, NEVER count on it solely for your retirement. Pension funds have in the past and will in the future run out of money and default on their obligations. The Federal fund that takes over failed pensions only pays pennies on the dollar. If you pay into a pension instead of SS, it is still important to have other savings, since you won't have SS as a back up if something happens to that pension. I've never heard of a state run pension defaulting, but just because it hasn't happened yet doesn't mean it won't.

 

[eliza61]

Never knew it was an option. every job I've ever had you paid into it.
I'll be the lone dissenter. I think ss is going to be around for a very long time. this is just based on my 'often wrong" thought process. LOL.

1) I know every one and their mothers says that they would fund their retirement but the reality, at least today is far, far different. I think the last figures say almost 70% of us do not have enough saved for retirement.

2) more and more jobs are getting rid of their traditional pension plans. I know all you young people here are smart cookies but Average joe 25 year old isn't thinking about an IRA.

3) Senior citizen population is growing. See what happens when you even suggest getting rid of ss or medicaid.

4) People have been predicting SS's demise for at least 20 years. It hasn't gone any where yet. It might change but I think it's here to stay for a very long time.

 

[thebeesknees]

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!

It probably depend son your state, then. Here in CO, state workers (teachers, government, etc.) do not pay into SS, but into the state retirement fund called COPERA. DH works for COPERA at the moment, so he does not pay SS (although he has done so at every other job he's had). We also fund our IRA, because we don't want to depend solely on the state retirement and SS. He told me that right now, COPERA benefits are actually better than SS, and a lot of people will work the minimum years necessary to collect COPERA, take the option to "buy into" more years, and then start another full-time job that will give them SS benefits, as well. Seems like double-dipping to me, but at the moment, there is nothing saying you can't do it. I highly doubt the COPERA benefits will be as good by the time we are ready to retire, since we are in our mid-30s right now.. They are doing an overhaul of the system right now that will probably reduce the benefits available by then.

 

[Cindy B]

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

Not all teachers. Certain states (Ohio and Texas that I know of) are two of the exempt states which have to do with date of hire. Prior to a certain date, municipalities were exempt as well. The people I see that don't get SS taken out are certain teacher, firemen, police offiers and some older post office retirees.

 

[eliza61]

Here is a very interesting article from fidelity. They interviewed the CEO of the Employee Benefit research Institution (a think tank). The EBRI goes around conduction surveys on how we view retirement and benefits. some of the things they found...

Q. Is it time for Americans to wake up to the financial responsibilities of funding their retirement?

Mr. Salisbury: Let's first look at today's retirees. About 25% get all their income from Social Security, and for two-thirds it is their primary source of income. And, the number of workers who are being asked to pay for health insurance is on the rise. So, it is time for Americans to realize that if they do not choose to save today they may have to work longer. But many simply do not have much money to save. Half of American families earn less than $40,000 per year.

Mandatory savings—Social Security—is the only way many will ever save. Social Security will provide a meager income, however. So, for most workers, getting the retirement they hope for will be their own responsibility. For retirees today, 22% get a pension from a past private-sector employer, and 13% from a past public-sector employer. That leaves 65% of today's retirees who are on their own. For today's workers the percentage will be higher, as fewer will have that pension annuity.

Q. By their own admission, 72% of workers surveyed say they could save an additional $20 a week for retirement, while 54% of those who do not save also say that they could save an additional $20 a week. Unfortunately, when further questioned, both groups were not as willing to cut back on spending as they initially said they were.Mr. Salisbury: Correct. The pressure of the ads, peers, and yes, the kids' desire for that new CD gets in the way of savings every day.



Of respondents 18-34 years-old, 35 percent feel “indifferent” when it comes to their retirement preparedness, with 11 percent citing “fear” and another 9 percent responding with “anxiety.” Almost three in four (73 percent) assert that, despite the economy, they haven’t changed their thinking about when they will retire. Additionally, nearly six in 10 (59 percent) of those 18-34 years-old confess they are not currently saving for retirement. Among savers, an average of just $23,000 has been set aside for retirement purposes.



https://www.mysavingsatwork.com/atwork/1080912163747/1100788684437/1114170575932.htm

It's not entirely objective, but it's got some interesting points on how we think and spend money.

 

[lovemygoofy]

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

My husband is considered a federal employee and pays into SS every month.

 

[Cindy B]

My husband is considered a federal employee and pays into SS every month.

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.

 

[Pigeon]

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

Dh is a public school teacher and I'm a state employee. We both pay SS.

 

[G's mommy]

I'm a state university employee in GA. We pay into teachers retirement and social security, no option to opt out of SS.

 

[Cindy B]

From dear old wikipedia

Groups not covered by Social Security
There are a number of groups of workers who are exempted from having to pay Social Security taxes:

Federal employees hired before 1984 who elected to continue to participate in the federal retirement program instead of receiving part of their retirement under Social Security coverage.
State or local government workers (police officers, firefighters, and teachers) hired before March 31, 1986 and participating in their employers' alternative retirement system.
Ministers may choose whether or not they will participate in the Social Security program.
Self-employed workers with annual net earnings below $400.
Election workers earning $1,000 or less a year.
Household workers earning less than $1,500 per year.
Minor children with earnings from household work but for whom household work is not their principal occupation.
College students working under Federal Work Study programs, graduate students receiving stipends while working as teaching assistants, research assistants, or on fellowships, and most postdoctoral researchers.
Individuals who are members of certain religious groups such as the Amish and Mennonites.
Before the 1983 changes, three counties in Texas (Galveston, Brazoria, and Matagorda) opted out of the system and now use an Alternate Plan, a private pension plan created and administered by First Financial Benefits, Inc.

In 1983, the U.S. Congress closed a loophole in the original Social Security Act that allowed municipal governments to opt out of the Social Security system, and also brought all civilian federal employees whose employment began in 1984 or later under the system.

 

[3boymthr]

As PP noted, I believe Catholic priests, monks and nuns are also exempt. They don't get a "salary" so they can't pay a portion of said salary into SS. The catholic church does ensure that they are taken care of into their retirement.

You technically don't have to pay all that long into SS to be able to collect SS. In her 67 years of life my mother only worked for 4 years and she collects. I think 11 consecutive quarters of payments into SS qualifies you to collect and because my DF paid more money into SS when she hit SS age she is able to collect at his level of payment.

 

[adkkev]

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

I'm a state worker and I pay SS and into the state retirement system. And I also contribute to a deferred compensation plan through the state.

 

[Cindy B]

.

You technically don't have to pay all that long into SS to be able to collect SS. In her 67 years of life my mother only worked for 4 years and she collects. I think 11 consecutive quarters of payments into SS qualifies you to collect and because my DF paid more money into SS when she hit SS age she is able to collect at his level of payment.

Here's another lovely article on Social security benefit entitlement

http://en.wikipedia.org/wiki/Retirement_Insurance_Benefits

And straight from the source: How you can qualify for Social Security

http://www.socialsecurity.gov/retire2/creditsa.htm

 

[CarlisleMom]

Ditto here. I have worked for 2 different School Districts in PA. Have paid into the retirement system and social security. No choice.

 

[MrsPete]

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

Nope. It depends upon what state you live. I've been paying into BOTH the state teacher's fund AND Social Security for quite a few years.

 

[MrsPete]

From dear old wikipedia

More evidence -- as if we needed it -- that Wikipedia isn't a reliable source. My mom falls into one of those categories, and I am 100% certain she paid Social Security and is now collecting from the program.

 

[MrsPete]

. . . I'll be the lone dissenter. I think ss is going to be around for a very long time. this is just based on my 'often wrong" thought process. LOL.

1) I know every one and their mothers says that they would fund their retirement but the reality, at least today is far, far different. I think the last figures say almost 70% of us do not have enough saved for retirement . . .

I agree that Social Security is going to be around for a long time, BUT that doesn't mean it'll be worth much of anything. I expect that those of us who've saved for our retirement will receive way less than what we've paid in, and everyone will receive progressively smaller benefits.

I don't know anyone who says that they expect(ed) Social Security to "fund their retirement". Instead, most people seem to think that it either won't be there, or it'll be worth about enough to go to McDonald's occasionally in retirement. That doesn't seem to translate into "and so I'd better take care of things myself", but I don't know anyone who really thinks the program's going to take care of things.

 

[Cindy B]

More evidence -- as if we needed it -- that Wikipedia isn't a reliable source. My mom falls into one of those categories, and I am 100% certain she paid Social Security and is now collecting from the program.

Well, to be technical that wiki section was directly lifted from the Social security procedure manual (POMS). I know that because I cross referenced it at work! (Yes, you all know where I work now!)

As for your situation, many people get Social Security retirement (RIB) confused with either SSI or disability. They are three separate accounts or trust funds but still operating under the SS realm. I know nothing about SSI so don't ask me anything about it. If your mom collects under the program but didn't pay out, they she could have qualifed as a spouse of SS claimant, the divorced spouse of a SS claimant, paid out with having children in care of a deceased SS claimant or other situations like that. There are many scenarios which it could be and without knowing the situation I can't say exactly. Disability is very tricky and confusing but the qualifications are "less" than regular retirement questions.

OR it could be that some people opted for Social Security to be taken out. Case in point, older federal workers had a choice to either stay in the CSRS retirement system that didn't take out SS. If they didn't take out SS from their check, they forfeited the right to get SS checks later . However, some decided to go to FERS- the new program-which does take out SS. Now it is mandatory for all new employees be under FERS, hence SS taken out.


As for other social security questions: feel free to look at www.socialsecurity.gov. Many questions or concerns can be addressed there.

 

[deerhart]

As Cindy said,

SS benefits are much more complex then many people think and people can get benefits for a multiple reasons.

For example, my MIL started collecting widow SS retirement benefits at age 60 on her husbands account. When she reaches full retirement age, she will get a higher benefit collecting on her account, so she will switch over.

Also, if you don't pay into SS then you may not be eligible for disability benefits. While a homemaker can collect retirement on her spouses account, she can't collect disability payments if she's disabled (unless she falls into a VERY narrow category of being a widow of a person on disability when they died and she became disabled within 10 years of the person's death.. very rare)