As a Texas Teacher will I get Social Security?
It depends. There are two critical laws that Texas teachers should know about that can impact whether you will receive Social Security.1
The Windfall Elimination Provision or WEP and the Government Pension Offset or GPO. Both of these laws can reduce or eliminate a Social Security benefit. This will depend upon whether you as a teacher qualified for the Teachers Retirement System or TRS and did not pay into Social Security.
Whether you get it, Social Security can be confusing for Texas teachers since many have held previous jobs where they have paid into Social Security. For example, you could be a teacher who is a career changer from a job that paid into the system for many years and expects some benefit from previous employment.
The sad news is that you really cannot learn whether these two reductions apply to your social security benefit until you apply for Social Security benefits. You will only get a clear idea of what will happen to your Social Security benefit when you retire as a teacher. Hence, it is essential to know what to expect.
Windfall Elimination Provision
The WEP recalculates your Social Security benefit if you have a previous position where you paid into Social Security. The maximum monthly WEP for 2022 is $512 for 20 or fewer years of employment in a covered job. The WEP completely phases out if you worked 30 or more years in a previous job where you paid into Social Security. One way to eliminate the WEP is to work part-time or take on another job after teaching to get the 30 years of required work. A study has shown that this could be worth an additional $100,000 of extra income over a 20-year retirement! 2
Government Pension Offset
The GPO is that if you are entitled to Social Security benefits based as a survivor or spouse and have a TRS pension where you did not pay into Social Security, your survivor or spousal benefit will be reduced by 2/3rds your pension.
For example, if you get a monthly TRS pension of $600, two-thirds of that, or $400, must be deducted from your Social Security benefits. For example, if you’re eligible for a $500 spouses, widows, or widowers benefit from Social Security, you’ll get $100 a month from Social Security ($500 – $400 = $100). If two-thirds of your government pension is more than your Social Security benefit, your benefit could be zero.3
Worst Case Scenario
If you have never paid into Social Security and only qualify for TRS, likely, you will not receive any Social Security benefit. If this is the case, you should prepare ahead of time and save money in addition to TRS for retirement.
What are your options?
If you are a teacher in Texas and do not pay into Social Security, you should be proactive and save extra each month into a 403(b) plan available in your district. Teachers in Texas can defer in 2022 as much as $20,500 per year into a 403(b) plan and an additional $6,500 if 50 and older. You can use this to supplement your retirement pension from TRS.
Other options are working part-time or having enough covered years to eliminate the WEP. To eliminate the WEP, you would need at least 30 years of covered Social Security.
Teachers are well-advised to contact the Social Security Agency to learn more about their benefits. It is also best to talk to a financial planner to see what options work best with your retirement goals. Reach out to me below on the contact page, and I can estimate the WEP and GPO and their impact on your Social Security benefit.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on to avoid federal tax penalties. Individuals are encouraged to seek advice from their tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.