Teachers’ Social Security?

Teaching does have its rewards, but in Texas they sure aren’t economic.  

   Folks who have chosen teaching in Texas as a follow-on career, as I have done, must be nuts.  Either this or they just love kids and teaching, as I do, more than they love the prospect of a comfort- able retirement.  This is because of two Federal laws, the Govern- ment Pension Offset (GPO) and the Windfall Elimination Provision (WEP).  It is also because:  Federal tax code restrictions disallow Individual Retirement Account (IRA) contribution tax credits for individuals contributing to a pension plan other than Social Secur- ity; many school districts in Texas do not participate in Social Security, and; teachers in Texas are not given a choice on whether to participate in the state’s Teacher Retirement System (TRS).

   The details associated with this conundrum are complicated and confusing.  Conundrum?  Webster defines it as a question or an intricate and difficult problem having only a conjectural answer, or a riddle whose answer either involves a pun or is a pun.  So, some- body please correct me on all this if my understanding of the situation is flawed, but with so many in the Congress these days hell-bent to screw with it, I think the term, “social security,” is itself a pun.

   The Association of Texas Professional Educators (ATPE), of which I am a proud member, has it essentially right.  The TRS in Texas is a better program than Social Security.  Its monthly benefits paid out to retired participants are substantially greater than those distributed to Social Security retirees.  But this is only true for those who have had a substantial number of creditable years of service as teachers here in Texas.  Those who teach fewer than ten years or are younger than fifty-five and have taught fewer than five years will have wasted their time and money by contributing.  And, did you know that the average male going directly into teaching after graduating from college in Texas only teaches for two years?  It’s true.  The pay and the working conditions in many districts are that bad.  Also on the plus side for TRS are retirees’ health insurance, return-to-work benefits, and life insurance.  But again, these benefits are only available to retirees who complete minimum service eligibility requirements.

   Some believe that making Social Security coverage mandatory would solve the problems that educators experience due to the GPO and WEP.  But I don’t.  Neither does ATPE.  We recognize that this would only serve to damage TRS and other state pension funds.  An alternative not often talked about by ATPE, our other state teacher unions, or our Texas legislators, would be to allow teachers to choose whether or not to participate in TRS.

   At age sixty-two, I’ve been a TRS participant in Texas for three years now.  So, at age sixty-five, as I understand the current rules, I will be eligible for some level of TRS annuity.  Fortunately, I had more than thirty years of substantial income with Social Security contributions being made before becoming a teacher, so my pension from Social Security should not be greatly affected.  Neither will my military retirement.  Thank God for that.  But I’m in an enviable situation; the numbers just happen to work in my favor.  By my rough calculations, however, and I do mean rough because the WEP offset and retirement calculation formulas of both TRS and Social Security aren’t easy for social science majors like myself to follow (they’re also subject to change and no one expects them to become more liberal), I’ll have to work full time as a teacher until after my seventieth birthday to just break even.  This is true even though the Texas 79th Legislature passed a revision to TRS eligibility requirements that obviate the notorious Rule of Eighty for retirees who are sixty-five or older and have at least five years of service.  It’s still true because of income tax disadvantages and the reduction I will incur to my social security income for the years that I do not contribute.  The other advant- ages of TRS, however, the medical and life insurance offered to retirees, plus to return-to-work benefits, I anticipate will help to compensate for this lost income.

   The Government Pension Offset (GPO) doesn’t really concern me or my wife.  It’s an offset provision in Social Security law that reduces spousal Social Security benefits for public employees who are eligible for government pensions such as those provided by TRS.  When I am gone, if I live long enough, my wife will have her own retirement income plus a portion of my military retirement owing to the years we have paid into the military retirement Survivor’s Benefit Plan.  The spouses of others employed by the state here in Texas are not so fortunate.

   The tax code that precludes Individual Retirement Account (IRA) contribution tax credits does impact us, my wife and me.  As a hedge against the prospect of my not being able to finish a full five years worth of teaching for some reason, I have been contrib- uting monthly to a traditional IRA.  But, even though we are buying our own home, claimed no personal exemptions, had extra money deducted from both our salaries, had substantial profes- sional expenses, and contributed generously to our church and other qualified charities last year, we did little better than break even on our income taxes.  Tax cuts?  Apparently not for those of us in the middle class, thank you very much Mr. Bush.  Given our joint income tax bracket, the IRA tax credit, for which we would have been eligible the past three years had I not been contributing to TRS, would have helped a lot.

   Before I conclude this little crying session, on behalf of all state public servants in this country, I want to publicly thank The Honorable Howard (Buck) McKeon, United States Congressman from California, one of the primary sponsors of the Social Security Fairness Act (a resolution for the full repeal of the GPO and WEP), the 321 other members of the House of Representatives who support this bill, and 28 bipartisan senators who support a similar resolution in the Senate.  For more information on this and to find out what you can personally do to help Congress get this bill out of committee and onto the floor for a vote, CLICK HERE to visit the National Education Association’s website.

   Again I say, if I’ve not stated things as they really are for teachers here in Texas, or if someone has a different take on this reality, I will gratefully accept correction.  Otherwise, please go to the polls in November with your public servants in-mind and give no heed to politicians’ rhetoric claiming to have done teachers a great service anytime in recent history.

   Now, if I can just live long enough and stay well…  hmmmm, school starts again in just little more than a week.  Then I won’t have so much time on my hands for all these blog postings. Do I hear a HOOAH out there!

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Published in: on July 27, 2006 at 4:25 pm  Comments (13)  

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  1. Thank you Kent for bringing this up again. I spoke to a student group in April and they were in shock when I explained this issue. I have my quarters in and will only get 1/3. I have just retired at 55 with 25 years in and will get 56% of my “retiring” salary – $55,000. By the way, a new teacher in Houston will be making $41,000 as a beginning salary. My husband has worked since 1974 in oil and gas and has a hefty amount in social security. I, again, will only get about 1/3 if he predeceases me. I would have gotten more if I had not worked at all. I went to my district a year ago to ask what it would cost the district to opt into social security – over 5,000 employees – $12.79 million a year – with the way things are now for school districts – do you think any school district could afford that? NO! Only about 50 school districts in Texas are currently contributing to social security. More used to but dropped off. Just another example of our fate as an undervalued profession working with our undervalued future – children. By the way, I have filed for state rep in the Houston area – check out the website at sherriematula.com. Only one other educator is really speaking out on our behalf – Alma Allen from Houston.

  2. I have been a special education assistant for my district for 15 years. As a stay at home Mom for most of my adult life, I did not worry about Social Security benefits much since I would get spousal benefits from my husband. Now at age 58 I considering my options at retirement. If I retired right now I get less than $300 a month from TRS and the insurance would cost about $200 of that. I have been told that because of my empolyment and contributions to TRS that I am not eligible to receive any SS benefits from my husband’s SS. I am having to consider going to work in another field at nearly 60 to get the quarters I need to qualify for even a portion of SS benefits.-Gloria Bailey, Fort Worth

  3. This is a question for kent or anybody else who is reading and can give me some advice. I have been a teacher for 6 years in Houston. I resigned and requested my retirement because I planned to stay home with my children. Unfortunately, my husband got injured and now disabled, so I decided to apply at another school district just last week. If I get hired, can I still get my retirement out? Can I choose not to contribute to TRS if I start at a new district?

  4. I am an engineer, who has 25 years experience, currently 49 years old. I have made a good living and have contributed a lot to SS. I am looking into teaching for the next phase of my career, and heard tonight about this for the first time, and got concerned. I will not be in teaching that many years (15 years or less), and will not get a good TRS retirement. I have no clue how to understand what this will do to my retirement…. where do I turn to understand this more? Someone told me that I would have to abandon my SS to go into teaching, that it essentially evaporates…. Mike

  5. Like Mike I’m seriously considering teaching as a bridge career to retirement. I’ve paid a lot into SS and don’t want to throw that away. Why would anyone give up their SS late in career life? Loosing SS will be a deal breaker for me. I’m disappointed.

  6. My advice to all considerng teaching in Texas is Don’t Do It! I have my quarters in SS from working for 14 years in other states at low salaries, so I will only get $296. a month and will have no spousal benefits. If I had known this before becoming a teacher in TX in 1992, I would have moved back to Florida. My mother in law, who never worked a day of her married life, got more in SS than I ever will. Politicians have been paying lip service to the problems with the WEP and GPO for years, but I have not seen any changes come about. There is no way anyone can live on a TRS pension, minus insurance premiums, unless they had a career ladder system earlier in their teaching career and were making lots more than I do at retirement. Just thinking about how unfair this whole situation is makes me so depressed that I could cry. Worked all through college and graduate school at part time jobs, paid into SS, and this is how I get rewarded at the end of it all. Texas teachers get screwed all the way around!

  7. A question: I taught for 27 years, then in 2001, I quit my teaching job and went to work for the summer at the University of N. Tx., which takes out both teacher retirement.(That was one teaching year before that “loophole” was closed, so that we teachers wouldn’t get comfortable drawing from something they had paid into. I have since worked part-time jobs to gather my own Social Security quarters. Am I eligible to draw Social Securioty when I finish my remaining quarters?? (Not entirely relevant: I received my Social Security statement, and it had cut off the first 6 quarters that I worked when I was young. They said it was my problem to come up with the W-2 forms that were over 40 years old!! I dug up the Social Security’s own statement of my work history from about 10 years old and am going to talk to them next week. I fear I will have an anger management problem.) Any way, does anyone have information about me drawing my own Social Security benefits when I finish gathering them???

  8. Michelle… I had no problem with Social Security whatsoever when I retired this year. I think/hope that they will likewise accespt your documentation without question.

  9. I am a nurse and currently back in school to get a degree to teach (k-6). I have 20 years in as a nurse and plan to keep my license and work PRN in the summer. Was planning to teach for at least 10 years. So I will be contributing to ss and TRS every year.

    When I am ready to retire I will have paid at least 40 years into ss and 10 years to teacher retirement.

    Will I be elegable for both?

  10. Yes, Catherine. Although your Social Security payments may be affected slightly. For a definitive answer, you would have to discuss with an agent of the Social Security.

  11. I commend the informative article you provide in your articles. I’ll bookmark your blog and have my friends curb up in your blog frequently.

  12. Whatever you have authored in Teachers� Social Security? � The World According to Opa is simply not just great but usually amount of important. I know the bulk of people don’t really cleansing for health these types of. However when you offer a similar experience to me and provide suffered from slimming down or addiction or a couple of the things you truly can think about I usually tend to appreciate what I read since it is really the sole method to gain in knowledge without actually doing the things. That’s been why I enjoy reading through other peoples points of vistas and experience.

  13. This topic is one that’s a hard pill to swallow for many teachers. Working with them to understand their finances, many do not know they can be eiligible for both TRS and Social Security, and if you have eanred 40 credits in the Social Security system you will at least get some benefit.

    What is worrying though is the lack of education around the topic. Teacher pensions are far better than Social Security, which maxes out at ~$30,000/yr. Many teacher pensions are higher than this, so teachers do come out ahead (most of the time). However, it is an emotional worry when people see the benefits they’ve earned in previous years disappear because they decided to become a teacher.

    I write more about the eligibility of TRS and Social Security on my company blog here: http://financeforteachers.com/can-i-collect-trs-and-social-security/

    – Dave Grant, CFP(R)

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