Can i collect texas teacher retirement and social security

I am a retired teacher with 31 years of service in the Waxahachie, Texas School District and during my tenure as a teacher I also worked part time in the non teaching periods of each year. Do I qualify for Social Security benefits? I have heard rumors that you also conduct Social Security workshops as well as Medicare Workshops. My question to you is can I draw my TRS pension as well as my Social Security check and benefits? Thank you and keep up your columns as they are helpful to us all.

Tina

Waxahachie

Oh Tina,

The short answer to your question is, it depends. You can’t imagine how many teachers I talk to at my workshops both here in the Houston area and the workshops we give throughout Texas, asking the same question. Many teachers and school district employees are told by their school districts, “No, they cannot draw both.” That answer isn’t necessarily correct.

For you to draw both TRS pension and partial Social Security benefits two conditions will allow this to happen:

1. You must be qualified to receive your own benefits.

2. Or collecting benefits that are based on your spouse’s working history.

To be eligible for Social Security benefits, you must have earned four credits per year for 10 years. There is no partial credit for credits less than 40 credits - it’s all or nothing.

When you retire and start receiving your TRS pension and you are eligible to receive Social Security, you will not be able to draw the full amount of both pensions. The Social Security Administration will take in account the amount of your TRS Pension payment and will reduce your Social Security amount you are able to draw. This is known as the Windfall Elimination Provision (WEP). WEP can’t totally eliminate the amount of Social Security you will draw but it will take a big chunk of it.

Explaining the formula that is used to figure out how much the reduction is for a person working in non-Social Security employment for the majority of their career and only working a few years in SS covered jobs, this is how they figure it out. SSA separates the average earnings into three amounts. Then the SSA multiplies each amount by a percentage, known as a factor.

1. The first $606 of your average monthly earnings is multiplied by 40 percent

2. The 2nd $3,046 is multiplied by 32 percent

3. The remainder by 15 percent

Tina, keep in mind that the reduction imposed to your Social Security benefit by the Windfall Elimination Provision, may be no more than one half of your TRS Pension.

NOTE: For those filing for Social Security benefits, if you go to your local Social Security office for advice about the “best” way to receive your maximum Social Security benefits, they will not give you advice and tell you of four combinations to choose from and in reality there are over 729 combinations available. Proper Social Security planning is advised.?

First Woodlands Area Confused about Medicare Workshop-Tuesday, August 25, 6 to 8 p.m. at the Integrity Bank-Woodlands, 1699 Research Forest Drive, Suite 100, Shenandoah, TX 77380. Reservations are required as space is limited. Please RSVP to 832-519-TONI (8664)

Confused about Social Security Workshop at the Toni Says office-Thursday August 27 from 4 - 6 p.m. SW Houston office located at 10998 S. Wilcrest Dr., conference room, Houston, TX 77099. Limited space please RSVP to 832-519-TONI (8664).

Toni King, author of the new Medicare Survival Guide®, which is a simple guide explaining Medicare is on sale at Tonisays.com. Email questions or to schedule a personal consultation to Tonisays.com/ask-toni.

Many educators that participate in the Teacher Retirement System of Texas (TRS) are unaware of two provisions of Social Security Law that affect their social security benefit.

The two provisions are the Government Pension Offset and the Windfall Elimination Provision. Most school districts in Texas only withhold for TRS and their teachers do not pay into Social Security, which means these provisions apply to most Texas teachers. A few districts in Texas and most higher education institutions pay into both TRS and Social Security, in which case these provisions will not apply.

Windfall Elimination Provision

The Windfall Elimination Provision (WEP) can lower an individual’s social security benefit that they would receive from their own previous work history paying into social security.  WEP would apply to teachers who worked in other careers prior to teaching or during the summers and could reduce their social security benefit by as much as $498 per month.*

Government Pension Offset

The Government Pension Offset (GPO) affects an individual’s potential spousal or survivors benefit that they would receive from their spouse’s social security work history. Typically, an individual can claim 50% of their spouse’s social security benefit as a spousal benefit while their spouse is alive and can claim 100% of their spouse benefit as a survivor benefit upon their spouse’s death. If the individual receives a pension from employment not covered by Social Security, such as TRS, their spousal and survivor’s benefit will be reduced by as much as 2/3 of their TRS pension.

Planning Ahead

Know if the WEP and GPO apply to you

Check with your Human Resources department if your employment is covered by just TRS or both TRS and Social Security. Remember if you pay into both, WEP and GPO do not apply. Another quick way to check is by looking at a recent pay stub. If you pay into both, you should see deductions for Social Security and TRS.

Earn 30 years of Social Security work history

WEP does not apply to individuals who have 30 years of substantial social security work history and is reduced for those with 20 or more years. For teachers that have consistently worked over many years during summers or have earned income outside of their TRS employment for many years, there may just be a few years left to reach this 30-year threshold. Earning income from a Social Security covered job for a few more years after retirement can reduce the effects of WEP or eliminate it altogether.

Save to supplement retirement income

If you are a teacher affected by WEP and GPO, consider being proactive and save an additional bucket of funds to supplement your retirement income. Many school districts offer 403(b) qualified plans. These retirement plan types allow you to defer a portion of your income tax-deferred until retirement. In 2021, you can defer up to $19,500 a year ($26,500 a year if you are age 50 or over). Depending on the 403b Plan Provider, these funds can be invested in either mutual funds or annuities, with the potential to grow during the deferral period.

To learn more about the GPO and WEP, you can visit the Social Security Administration website at the link below and contact our office. We would be happy to help you determine if these two provisions apply to you and can help develop a savings strategy and financial plan to mitigate their effects.

*Please see the chart published on the SSA website linked here for the Maximum Monthly Amount Your Benefit May Be Reduced Because Of The Windfall Elimination Provision (WEP) https://www.ssa.gov/benefits/retirement/planner/wep.html#limit

https://www.ssa.gov/benefits/retirement/planner/wep.html
https://www.ssa.gov/pubs/EN-05-10045.pdf
https://www.ssa.gov/benefits/retirement/planner/gpo-calc.html

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with eh tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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