Social Security And Teachers (Startling Facts About Your Future)

Social Security and Teachers (Startling Facts About Your Future)

Are you getting ready to retire or thinking about your future? You may be shocked to discover that your years of teaching may leave you short when it comes to retirement funds.

That’s because many teachers can only collect a percentage of their Social Security payments. Some can’t collect any. This is largely because of state and government laws that affect teacher retirement and Social Security.

Concerns About Retirement

Teachers have several reasons to worry about their ability to retire comfortably. If you’ve been working as a teacher for several years, learn about two government provisions that can affect your Social Security benefits. You should also look at what your state’s pension fund is planning.

Two Government Provisions That Affect Teacher Retirement and Social SecurityCaution sign

Two government provisions can hurt your retirement. They are the Windfall Elimination Provision and the Government Pension Offset.

These provisions are supposed to prevent people from getting double benefits, for instance, getting social security benefits while they’re also collecting a pension.

This only applies if they did not pay social security taxes while working at the job with a pension.

These provisions affect several other public sector employees such as firefighters, state and federal government employees and police officers.

Windfall Elimination Provision

This provision uses a specific benefit calculation formula for retirees who receive pensions from jobs where they didn’t pay Social Security taxes.

The provision protects low-income workers by allowing a different calculation of benefits. This calculation gives low-income workers a larger share of their earnings to their Social Security payments.

As the Motley Fool explains, “Lifetime low-income workers qualify for the highest Social Security benefits as a percentage of their earnings. However, if a worker only paid Social Security tax on some of their earnings, they may appear to be a low-income worker when looking at their Social Security wages, when in reality that isn’t the case.”

Government Pension Offset

This is another law that affects people who get retirement benefits outside of Social Security. It holds that if you’re getting a government pension and you’re also getting survivor Social Security benefits, your Social Security benefits will be lower.

The cut can be significant. The reduction depends on the amount of your monthly pension plan. If it is high enough, you could lose 70% to 90% of your Social Security payment.

State Social Security Agreements

Some states have made their own arrangements with the Social Security Administration. These states have workers who don’t pay into social security and use their own pension plans. They are:

  • Arkansas.
  • California.
  • Colorado.
  • Connecticut.
  • Georgia.
  • Illinois.
  • Kentucky.
  • Louisiana.
  • Maine.
  • Massachusetts.
  • Maine.
  • Missouri.
  • Nevada.
  • Ohio.
  • Rhode Island.
  • Texas.

According to the Social Security Intelligence blog, “If you are a teacher in one of those states, the rules for collecting a Teacher’s Retirement System pension and Social Security can be confusing and maddening at the same time. That’s especially true if you’ve paid into the Social Security system for enough quarters to qualify for a benefit, which is fairly common among teachers.”

It can be especially confusing because teachers often work two jobs. Many teachers started teaching after spending several years in other careers.

According to pension researchers Chad Adelman and Andrew Rotherman, that leaves 40% of all teachers without the chance of collecting their full social security benefits.

Writing at EduWonk, Andrew Rotherman points out that this shortchanges teachers, because teachers are relying on pension plans funded by their states. Some of these plans are solid and well-funded, while others are weak and poorly managed.

“Social Security alone is not sufficient as a retirement plan for teachers,” Rothman writes. “Whether through defined-benefit plans, 401k-style plans, or hybrids such as cash-balance plans, states and school districts must to more to ensure teachers are on a secure footing for retirement security. But Social Security is a portable retirement benefit that works favorably for teachers as part of a basket of supports.”

Problems with Pensions

The problem goes beyond teachers and Social Security. Teachers also have to face the fact that states are trying to cut teachers’ pension plans and replace them with risky 401Ks and so-called cash balance plans.

In 2018, National Public Radio aired a special report focusing on teachers and their retirement struggles. Andrew Biggs of the American Enterprise Institute told the station, “You know, in theory, you could work for 10 years as a schoolteacher, come out with very little on the pension end, but also not have earned any credits toward getting any Social Security benefits.”

Rotherman believes that fixing Social Security to include teachers is the answer, because state pension systems are not designed to work for today’s teachers.

“Teacher pensions face problems that go beyond financial shortfalls. Traditional pensions are increasingly a bad fit for a more mobile teacher workforce and an American workforce where people change careers more,” Rotherman writes at the EduWonk blog.

“This problem is becoming more acute as states increase the length of time it takes to earn a pension benefit to save money. We’re not talking about just a few years. Seventeen states now have vesting periods of 10 years. In 1988, if you asked teachers how many years of experience they had, the most common answer was 14 or 15 years. If you asked the same question in 2008, the most common answer would have been one year, followed by two years. So, there is a design problem and an actuarial one.”

What Can You Do?

Get Informed

When it comes to teachers and Social Security, make sure you know where your state stands. Will you have to give up some or all of your Social Security benefits because you have a state-funded pension?

Speaking of that pension, how well is it doing? Is the pension fund well-managed and stable?

Consult a Retirement Specialist

Understanding the details of teacher retirement and Social Security can be complicated. It may be a good idea to consult a financial professional. An expert in retirement and Social Security provisions can guide you toward the right plans for your retirement.

Prepare Yourself

Learn as much as you can about state and federal laws that affect your retirement. Certain factors may be out of your hands, but you can plan around them. Make the adjustments you need to protect your future.

Is Social Security Part of Your Retirement Plan?

Have you signed up for a retirement information meeting yet to see what’s going on with your teacher’s pension? Even if retirement is years off, I encourage you to start asking questions now. It’s never too early to start preparing.

One way to know your retirement is safe and secure is to start an online business of your own. There are several great options that let you begin building now.  You can learn and grow at your own pace, and kiss retirement concerns good-bye!

If depending on Social Security and retirement pensions alone scares you as much as it does me, take a look at my #1 recommendation for escaping the classroom.  It’s a great resource for learning how to promote yourself, your aspirations, and your special concerns.

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8 thoughts on “Social Security And Teachers (Startling Facts About Your Future)”

  1. Wow! Nicely said. I had no clue about this. Teachers that retire depend solely on their retirement fund, which makes this difficult. How will retired teachers live on shortage income? I think Wealthy Affiliate would be a nice alternative for teachers.  They can continue to make money from the knowledge they already have, and build helpful learning sites. Thank you, I will pass this site on!

    • Thanks for the kind words.  You raise a good question.  The answer is that teachers can’t live very well on a pension that falls short of needed funds.  No one could.  It’s true that Wealthy Affiliate is an excellent way to provide the income they while using their great knowledge base.

      Thanks for joining the conversation; I appreciate it!

  2. Wow, this is incredibly eye opening. I had never heard of Windfall Elimination Provision and the Government Pension Offset, and yet they are huge factors in what retired teachers receive during their retirement. I can’t imagine losing up to 90% of Social Security payments. Teacher pensions used to be one of the reasons that made the profession attractive, as overall, many other careers and corporate jobs just don’t provide a pension at all. 

    Thanks for the information… consulting a retirement specialist is a very good idea!

    • From my perspective, teachers absolutely need to get a retirement specialist working on their behalf.  It’s not a straight-forward proposition, and too much is at stake.  

      I’m glad you enjoyed the article.  Thanks for joining the conversation; I appreciate it!

  3. Excellent article you have up here concerning teachers and social security. I never knew anything about this before that retirement is a very dreadful thing for teachers. I think if they can monetize their knowledge by providing help to others through a website, that would be the best possible option for them rather than living on social security. Great post

    • When most teachers hear about these provisions, they’re stunned.  Most people don’t realize that teachers are placed into a special category of citizen when it comes to retirement.  Since there is no such thing as complete disclosure at the beginning of one’s teaching career, the information is pretty disheartening.  

      I’m glad you enjoyed the post.  Thanks so much for joining the conversation; I appreciate it!

  4. Social security and teachers startling facts about your future is worrying and sad information about the state of ordinary teachers and another profession in a similar nature. It is worrying in three major counts teachers about 40% were not able to get any chance of social security in the form of pension. And if it ha, it would never be enough as it is very low. The last thing about teachers plight is there are not enough fresh teachers who have been working as it becomes an unpopular job due to pay. It is indeed important that there must be a drive to let all teachers get the information regarding the state of social security and them. There must be a professional consultant to guide them on what are the things to do on their future retirement so as they could prepare themselves properly and not lose at least the pension they deservedly are getting. Teachers should be given proper attention by authorities and ensure they get just compensation during and after their tenure. They should be recognized and appreciated because they are the backbone of the country’s education.

    • I agree that this is indeed a worrying and sad situation.  I suspect the situation exists because of your final comment.  Because teachers are given such an important responsibility, the education of the future, they should be seen as the “backbone of the country’s education”  Unfortunately, teachers in the United States haven’t been viewed this way for a long time.  People may make statements professing to believe how important teachers are, but you only need to look at the conditions they work under to know that teaching is not seen as a worthy profession.

      Thank you for taking time to join the conversation.  I appreciate it!


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