Anyone Married to a teacher w/Pension? Have a SS Question

[34rlsa]

Quote:

Originally Posted by Cheesehead Any spouses of teachers who will receive no SS- Are you considering an annuity to make up for the loss of the 50% survivor benefit?

We didn't buy a separate annuity. But we did buy additional years of service to my wife's pension from qualified years at another school district.

[steelyman]

Quote:

Originally Posted by rothlev Old time employees are still under CSRS , ( fast becoming extinct) they did not pay into social security, and receive a larger pension, no matching to the TSP account.

That is/was true for IL state employees, at least those hired when I was (late 80s). No social security, no match, but you could deduct into a 457 (deferred compensation) plan.

[Gumby]

My young wife is a teacher who has not paid into social security and so will receive nothing on her own account and, as a consequence of the GPO, will receive no survivor benefit if I predecease her. The effect on our planning is that I will take SS at 62 to minimize the draw on our nest egg, so that it may be preserved for her use after I die. I also have a paid up whole life insurance policy, which, if annuitized or taken lump sum and properly invested, should make up for the loss of SS income.

[Chuckanut]

Quote:

Originally Posted by 34rlsa I imagine no 2 situations are the same for couples when a teacher's pension is involved. But as I stated above... for us we believe it makes sense to take my SS at 62.

Some teachers have paid into SS. It is the decision of the individual state or government entity.

This article explains what is happening and why

A Social Security Lesson for Teachers by Tom Margenau on Creators.com - A Syndicate Of Talent

Quote:

Bob and Carol both worked all their lives. And they worked at jobs that were covered by Social Security. In other words, Social Security taxes were deducted from both their paychecks. Neighbor Ted also worked at a job covered by Social Security. But his wife, Alice, was a teacher in Dallas. Texas teachers pay into a state teachers' retirement system, but they do not pay into Social Security. Bob retired and is getting $1,200 per month in Social Security retirement benefits. Carol actually made a little more than Bob most of her life, so she's getting a Social Security retirement pension of about $1,500 per month. Carol can't get (and frankly, doesn't expect) any wife's benefits on Bob's record because her own Social Security benefit precludes any spousal payments. In other words, Carol's own retirement benefit offsets any wife's benefits she might have been due on her husband's record. And for that matter, Bob can't get a husband's benefit on Carol's record because his own retirement benefit would offset it. Across the street, Ted is receiving roughly the same Social Security benefit as Bob, about $1,200 per month. His wife, Alice, is getting a $3,000 monthly Texas teacher's pension. Before the pension offset law was in place, Alice would have been eligible for a $600 dependent wife's benefit from Social Security in addition to her teacher's pension. But now, the government pension offset law prevents that from happening. Alice thinks she and other teachers are being singled out for Social Security penalties. What she doesn't understand is the law treats her the same way her neighbor Carol has always been treated. Again, it says that neither woman will get a dependent wife's benefit from Social Security because she is getting her own retirement pension.

[haha]

Quote:

Originally Posted by Cheesehead Ha, What I meant is that if I wait until 66 I will get $ $7700 more per year than at age 62. And if I wait until age 70 I will get $7500 more per year than at age 66. So my feeling is I should take it ASAP for two reasons: • Conserve the nest egg. • Don't give the government all my SS earnings if I die early.

Thank you. I misunderstood this, now it makes sense.

Not sure about your decision, it is complex in more ways than one. Good luck.

Ha

[imoldernu]

I think the situation is dependent on the state pension fund. Illinois has 18 different local agreements, but all fall under the same umbrella.
Overall, the teachers' pensions are generally better than SS.

That said... In Illinois, the Teachers' Pensions are underfunded by 90+ Billion dollars. In Wisconsin, the underfunding amount is about 10 Billion. Therein lies the risk factor.

[martyb]

Quote:

Originally Posted by rothlev The newer federal employees all pay into social security now. They receive a less generous civil service pension , a full social security pension and their TSP savings which are matched up to 5% , I think. Old time employees are still under CSRS , ( fast becoming extinct) they did not pay into social security, and receive a larger pension, no matching to the TSP account.

I fall into the old CSRS category. Just retired 3 1/2 months ago. Although the WEP claims most of my SS(when I file in 5 yrs), I will get a small amount, around $250 or so at age 62. That's because I earned my 40 quarters before going to work for the feds under CSRS. I also paid at least a small amount into SS during the 28 years I was in the military reserves. While not paying enough during those years for any of them to be considered "substantial earnings" by the SSA, maybe it'll count for something...or not. I don't know. But, at least I'll get the $250, which might help with medicare premiums when the time comes. Every little bit helps....

[Telly]

Quote:

Originally Posted by Cheesehead Since my wife is a union teacher who will have a pension in a couple of years upon retirement she will receive ZERO of my SS upon my death. Zilch, nada, nuthin.

Have you carefully worked this through yourself as per the SSA website using all rules of GPO?

[clifp]

Quote:

Originally Posted by Gumby My young wife is a teacher who has not paid into social security and so will receive nothing on her own account and, as a consequence of the GPO, will receive no survivor benefit if I predecease her. The effect on our planning is that I will take SS at 62 to minimize the draw on our nest egg, so that it may be preserved for her use after I die. I also have a paid up whole life insurance policy, which, if annuitized or taken lump sum and properly invested, should make up for the loss of SS income.

Generally, my advice is to wait until 70 for most people to take SS. Actuarially it is wash at what ever age you get the same amount of money. However, waiting to take SS until 70 is the cheapest longevity insurance out there. In your case that is of secondary importance to preserve the nest egg for the wife.

Gumby is pretty smart guy I'd take his advice. I imagine he has done a pretty thorough analysis (although Whole life?)..

[seraphim]

I'm assuming you have the resources to wait until you're 70, should you live that long. That's the key - how long you expect to live, barring no accidents. Take it early and invest it as padding for your spouse after you pass?

+1 on Gumbys advice...


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[rothlev]

Quote:

Originally Posted by Chuckanut Some teachers have paid into SS. It is the decision of the individual state or government entity. This article explains what is happening and why A Social Security Lesson for Teachers by Tom Margenau on Creators.com - A Syndicate Of Talent

Understanding why and fairness are two different issues. On the flip side should my husband predecease me I will receive 100% of my social security, 100% of my pension and about 55% of his pension. The three pensions are separate entities and having one does not preclude me from the other.

GPO is unfair to many and does drive widowed teachers into poverty at times.

By the way, I am a retired teacher who paid into social security. My DH is a retired civil servant who did not. He is hit with GPO , and WEP which , althou I understand, I do not think totally fair. In our situation neither of us is reduced to one small pension upon death of the other. So, no big deal. Should I predecease him he actually gets a 10% raise in his pension for not needing the survivor clause any more.

[rothlev]

NEA - Stories from real people hurt by GPO, WEP

some stories of affected teachers.
The key as Cheesehead knows is planning in advance so as to minimize financial hardship down the road.

[Tadpole]

I never understand the thinking unless it comes from lack of expertise in the SS system. My husband and I both paid into SS for over 40 years. As the higher earner I will also lose 100% of his SS if he predeceases me. Why should a spouse with a non-SS pension (no contribution) get a better deal than a spouse who did pay in?

[rothlev]

Quote:

Originally Posted by Tadpole I never understand the thinking unless it comes from lack of expertise in the SS system. My husband and I both paid into SS for over 40 years. As the higher earner I will also lose 100% of his SS if he predeceases me. Why should a spouse with a non-SS pension (no contribution) get a better deal than a spouse who did pay in?

Social security pensions and government pensions are not one and the same. Taking away an accured pension is controversial at best. In your example no law is taking away your own personal accured pension. WEP does exactly that.

Some fortunate people do earn more than one pension. Should we then take social security away from high income retireres just because they have other sources of income. ?

"? Why should a spouse with a non-SS pension get a better deal?"

not so, just getting the same deal as every other widow or widower.

Just saying there are two sides to the issue. A very controversial law.

[MikeWillRetire]

I sort of understand that a teacher who didn't pay into SS shouldn't get SS benefits. But aren't housewives entitled to a benefit equal to 50% of their husband's benefit?

[rothlev]

Quote:

Originally Posted by MikeWillRetire I sort of understand that a teacher who didn't pay into SS shouldn't get SS benefits. But aren't housewives entitled to a benefit equal to 50% of their husband's benefit?

Yes, therin lies the unfairness issue. Everyone is entitled to either their own benefit or 50% of the spouses benefit whichever is higher. EXCEPT when GPO takes that benefit away.

[Tadpole]

rothlev, No WEP doesn't do that. It simply attempts to place wage cohorts on the same bend point. But that was not the subject of my comment which still stands in the GPO discussion. In the GPO discussion my comment is the relevant one.

Mike, Yes, you have hit on the big winner in SS if ROI is the basis. It's a legacy of the days when women didn't work and lived longer than their spouses. In today's world where wives of high earners can most afford to stay at home, I wonder though.

This might help:

http://www.brookings.edu/~/media/res...d/20031103.pdf

[photoguy]

Quote:

Originally Posted by clifp Generally, my advice is to wait until 70 for most people to take SS. Actuarially it is wash at what ever age you get the same amount of money. However, waiting to take SS until 70 is the cheapest longevity insurance out there.

I agree and think that the default position should be SS at 70 unless there are other circumstances that would push one to taking earlier SS.

Although SS is designed to be actuarially a wash even taking into account simple factors like race and gender suggest that some groups (especially asian and hispanic females who have the longest life expectancies) should delay.

[Mulligan]

Quote:

Originally Posted by rothlev NEA - Stories from real people hurt by GPO, WEP some stories of affected teachers. The key as Cheesehead knows is planning in advance so as to minimize financial hardship down the road.

Speaking of planning. I knew several teachers hired pre late 1980s who opted out of joining into Medicare (now it's mandatory). They were shocked to know they would have to pay the entire premium now since they do not have enough quarters. Let's see, you don't pay into it, and now you thought you would get it?


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[Ally]

Quote:

Originally Posted by Mulligan Speaking of planning. I knew several teachers hired pre late 1980s who opted out of joining into Medicare (now it's mandatory). They were shocked to know they would have to pay the entire premium now since they do not have enough quarters. Let's see, you don't pay into it, and now you thought you would get it? Sent from my iPad using Tapatalk

My husband worked for a university and his pension is from the teacher retirement system. However, at the university, he paid into social security as well as teacher retirement, and will receive both. When we attended a pre-retirement information session, I was surprised to see many of the teachers present hadn't realized they weren't going to also get social security. In fact, they were angry that the university employees would get it. The session leader tried to explain that teachers had voted not to participate in SS in the 1950's. It was a very heated meeting. I couldn't understand how they couldn't have known this in making their future plans.


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