Pensions, Social Security, 401/403 plans

[leebee]

I've been reading a couple of threads about how much you need in a retirement account and found them helpful. I hope someone here has some information about pensions, retirement, and social security. I worked at "regular" jobs for 25 years, so of course I paid into social security. THEN I worked in a public school system for 9.5 years where we didn't pay into social security. Instead, we were covered by the state public employee retirement system. I have since returned to the "real world" where I once again pay into social security. To add to this, we have money in our 403(b) plans; some might even be 401(k) plans. I have heard many stories about how I'll lose my social security because I have money in the pension plan. I've also heard that I'll lose out on the pension money and social security because of our retirement accounts. I'm just trying to figure out if I'll ever be able to afford to retire, when (I turn 62 this year), and how much more I need to save/work- as well as what I am going to "lose." Can anyone explain to me how these kinds of plans overlaps nd will I really lose my social security money (I worked for that!!!)?

I also have the option of pulling my money out of the pension plan and rolling it into one of my retirement plans. Is that a reasonable thing to do? Any insight is greatly appreciated! (and no, as you probably can tell, we don't have a financial advisor!)

 

[kymom99]

I would take the money out of the teachers pension plan. I am a recently retired teacher. In my state we don't pay SS either. If you draw a monthly check from that teachers pension then you can't get the full amount of your SS. It is drastically reduced. You also cannot draw your spouse's SS upon their death if you draw from your teachers pension in my state. I would take that money out and invest it.

 

[runwad]

Yep something called the Windfall provision https://www.ssa.gov/pubs/EN-05-10045.pdf

Your Social Security retirement or disability benefits can be reduced The Windfall Elimination Provision can affect how we calculate your retirement or disability benefit. If you work for an employer who doesn’t withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any retirement or disability pension you get from that work can reduce your Social Security benefits.

My DH works for a county government, he doesn't have enough credits for social security anyway but if he did it would be reduced because of the link above. It's kind of thought of as double dipping, taking from two tax payer funded accounts, you can't do that. I don't know all the particular's cause like I said he doesn't have enough ss credits anyway, but I'm sure there will be someone who will come along and explain more.

 

[Alexle2007]

I've been reading a couple of threads about how much you need in a retirement account and found them helpful. I hope someone here has some information about pensions, retirement, and social security. I worked at "regular" jobs for 25 years, so of course I paid into social security. THEN I worked in a public school system for 9.5 years where we didn't pay into social security. Instead, we were covered by the state public employee retirement system. I have since returned to the "real world" where I once again pay into social security. To add to this, we have money in our 403(b) plans; some might even be 401(k) plans. I have heard many stories about how I'll lose my social security because I have money in the pension plan. I've also heard that I'll lose out on the pension money and social security because of our retirement accounts. I'm just trying to figure out if I'll ever be able to afford to retire, when (I turn 62 this year), and how much more I need to save/work- as well as what I am going to "lose." Can anyone explain to me how these kinds of plans overlaps nd will I really lose my social security money (I worked for that!!!)?

I also have the option of pulling my money out of the pension plan and rolling it into one of my retirement plans. Is that a reasonable thing to do? Any insight is greatly appreciated! (and no, as you probably can tell, we don't have a financial advisor!)

As an SSA employee, my advice is to go into a local field office and speak directly to a claims rep on how much SS benefits you may or may not collect. There are online calculators and retirement estimator on the SSA website but if I were so close and concerned, I would speak to a live person who can answer your questions.

 

[DLgal]

Just wanted to point out, the money that you paid into Social Security is not "yours." This is a common misconception.

You were funding current SS recipients during your working years. The benefit "owed" to you will be paid by people working after you retire and is calculated based on your total earnings during your working years.

 

[clh2]

I would definitely make an appointment with a fee-based financial planner.

 

[amcnj]

That windfall link seems to be saying if you had substantial earnings (it has a table showing what they consider substantial) for thirty years, then you would get the full 90% of that first tier of the three they use to calculate your primary insurance amount. So if you worked 25 years under social security before, and are now doing so again and put another five years into social security this round, you'll have the thirty years, and if they all had substantial earnings, you might not have any penalty. So you would earn social security, get a school pension (assuming they allow one for under ten years of service) and of course use your 401 k funds as you see fit. But to be sure, I would check with social security. I wouldn't think your 401 k money would have any effect on social security or the pension. Did these people telling you this say why they thought it might?

 

[tvguy]

As an SSA employee, my advice is to go into a local field office and speak directly to a claims rep on how much SS benefits you may or may not collect. There are online calculators and retirement estimator on the SSA website but if I were so close and concerned, I would speak to a live person who can answer your questions.

This answer has my vote.

 

[Dakota731]

. In my state we don't pay SS either.

Wow i never knew that happened. Which states aren’t teachers covered by Social Security? My sister is looking for a teaching job in neighboring states and that would be scary to consider.

 

[kymom99]

Wow i never knew that happened. Which states aren’t teachers covered by Social Security? My sister is looking for a teaching job in neighboring states and that would be scary to consider.

Kentucky

 

[yoopermom]

All I can suggest is don't "marry in haste, repent in leisure". Take your time, google to find contact info for each of the entities, call and find out the answers you need (or go in if it's close enough). Get EVERYTHING in writing, and read it carefully! May well be worth the time to pay a professional to help you sort it all out.

DH and I have a similar tangle, I'm vested in two state teacher retirement systems (but luckily still paid into s.s.) and have s.s. DH has a 401k and will have s.s. However we each have employments from "long ago" that I'm worried may have had retirements associated with them that we've lost track of over the years. Something to track down!

Every penny counts!

Terri

 

[Simba's Mom]

Wow i never knew that happened. Which states aren’t teachers covered by Social Security? My sister is looking for a teaching job in neighboring states and that would be scary to consider.

I know that teachers in Texas are exempt from Social Security, and I think in Massachusetts also. I've always wondered why teachers don't pay social security, but all other professions do.

 

[DLgal]

I know that teachers in Texas are exempt from Social Security, and I think in Massachusetts also. I've always wondered why teachers don't pay social security, but all other professions do.

California teachers don't pay social security. It is because the states have their own pension fund for teachers that is usually VERY generous if teachers put in a full 30 year career.

 

[Dakota731]

Our teachers here get 95% of their highest salary plus social security. My neighbors who were both teachers are always bragging about their $180,000 combined pension. It’s a great gig if you can get it but tough on taxpayers.

 

[debknight]

Teachers in the public school system are government employees. No government employees pay into SS. They receive government pensions.

 

[TwoMisfits]

Teachers in the public school system are government employees. No government employees pay into SS. They receive government pensions.

Yeah, that's not right. Current federal employees pay into SS. In some states, state governmental employees pay into SS. Now, some states, yes, their own state governmental employees do not pay into SS...but that is specific to individual states and their rules.

 

[kymom99]

Teachers in the public school system are government employees. No government employees pay into SS. They receive government pensions.

My husband is a government employee but not a teacher. He pays into SS and has a pension.

 

[smiths02]

Teachers in the public school system are government employees. No government employees pay into SS. They receive government pensions.

My DH works for the federal government and pays into social security.

 

[Simba's Mom]

Teachers in the public school system are government employees. No government employees pay into SS. They receive government pensions.

DH receives a pension (not a government employee). So why did he have to pay into Social Security? Sorry, I'm just being grumpy because I don't understand how the government can exempt itself from a retirement system that it forces everyone else to pay into, including those private employees who will be getting a pension.

 

[DLgal]

DH receives a pension (not a government employee). So why did he have to pay into Social Security? Sorry, I'm just being grumpy because I don't understand how the government can exempt itself from a retirement system that it forces everyone else to pay into, including those private employees who will be getting a pension.

They don't. That poster doesn't know what he/she is talking about. All federal government employees pay into Social security.