In my state, teachers with pensions come out far far ahead of what they would have received if they were making the same money and they only had SS - like 2-3X as much, and you can collect your pension as early as age 55, and that’s not counting the health benefits that they get in retirement either. And it’s only been recently that they’ve had to contribute anything close to the amount that gets contributed for SS.</p>
<p>Perhaps my state, being about as blue as they come, is overly generous. </p>
<p>You could debate about whether they would make more in the private sector, which would offset some of the difference. In my town at least, teachers are paid very well.</p>
<p>
Social security is not a pension plan. It’s an entitlement program with some funny eligibility rules that is largely pay-as-we-go. If everyone could opt out it would be a disaster IMO, unless it was impossible to tap that money before retirement.</p>
<p>The reason for the reduction in SS when you have another government (teaching) pension is that the SS payouts are somewhat progressive. Low lifetime earners get proportionately more, compared to what they contributed, than high lifetime earners. So Thumper’s benefit based just on SS contributions is artificially high, because her total SS wages are fairly low. The offset takes into account that Thumper had another stream of earnings that resulted in a retirement benefit that adds to the SS benefit. </p>
<p>As to the timing of giving kids DPOA over our affairs, I think the trick is to do that before you become incapacitated, so that you are competent enough to be able to delegate power, but that the power continues even after you become incompetent. There are a couple of new threads a day on the bogle heads forum about people wanting to help their parents or grandparents with their investments. In many cases the adult kids think Mom and Dad and Granny are doing it wrong and want to re-structure the portfolio. Yikes. So added to the possibly awkward discussion of what we’re living on and how we plan to make it last our lifetime, we get to have the discussion about whether it is allocated correctly in the first place, and whether by granting POA we are permitting meddling while we still consider ourselves competent. Guess we’ll have to have some talks on investment philosophy before we sign the POA forms.</p>
<p>I guess it has just been shocking to me (and to others) who have not known about teachers/gov’t employees in certain states that do not participate with SS. MIL receives SS in WI - and teacher pensions from WI (small check due to low # of years) and IA (full pension check with lots of years of teaching). I do not know if you could continue to keep two separate teacher retirement situations - my sis had a few years in WI, now she is in IA but will not have enough years for full retirement pay in IA - do not know if she had to transfer her years from WI or not. </p>
<p>Friend/teacher in MN (also fellow HS classmate) was shocked about hearing that IL teachers (or in that particular school district) not participating with SS. He taught a few years in Washington state, and will work until retirement probably in his current job in MN.</p>
<p>The paradigm change now is that some public pensions are in better shape than others; some people may have believed their pension would be enough and did not focus on building up more retirement savings… Some companies (like my husband’s employer) now do not have a retirement plan; some of the older employees with some companies are on a better plan than the younger employees. I know this is also the case with federal government employees.</p>
<p>Right now MIL and FIL are in better financial shape than they were when working and taking care of four growing sons (they went through two loafs of bread a day, lots of peanut butter and milk) - feeding/clothing/educating (all went to private colleges, that actually probably had a better financial situation with financial aid than public universities - esp as there was nothing within commuting range). </p>
I’m working on this now. My kids are 20 and 22, and my wife and I will still be working for years. But I’d still like my kids to have this information as soon as possible.</p>
<p>H worked over 45 years at federal govt. his pension is much better than S’s will ever be, as they changed the law in 1984 for federal employees (tho not sure about those working in Congress). </p>
<p>Financially, since H retired is the most financially comfortable we’ve ever been. He has a good pension (and I will get 55% survival benefit), he gets 66-75% health insurance premiums paid, no tuitions or loans and finished paying mortgage, with good home equity. We have some age-related discounts for real estate taxes as well, which help. </p>
<p>^^It is none of kids business as far as we are concern… We have no plans on such talks and one of mine is in his 40s. I feel that we will be very poor living on SS. We will try to find a cheaper place to live (hopefully!!). If not, nobody will help us as Medical will suck up everything no matter how you look at it. I mean, we do not have $50 mlns. And kids will be paying for their kids’ colleges, so what they got to do with our fanances if they are going to be barely making it themselves. </p>
<p>We’ve only shared approximate numbers (mostly, net worth - value of current home and the fact that we’re debt free) with our kids so far. The main reason for doing that was to reassure them that we’ve recovered, not in full but well enough, from a combination of real estate losses, employer’s stock value devastation, and huge medical expenses. For a while, any gift or loan triggered expressions of guilt and concern on their part and we wanted to put a stop to that when our general reassurances were ineffective. </p>
<p>my brother in GA (guidance counselor) retired at 55 and has never worked a day since, he is now 70. They paid towards their pension plan but no SS. He was able to somehow buy a couple of years working in Va and transfer to Ga so he could go out after 30 years. Nice. IMO. I am still working at 63 for insurance and make more money than he ever did but that’s the trade off for the wonderful benefits for teachers and other certain grades of public servants. What salary they didn’t make was given to them in only working X number of days a year and the great pension/insurance in retirement. At least that is the way I see it. Not that the job isn’t stressful but hey, so is mine. Very stressful. I do often think about my paycheck at the end of it all some days and just keep on keeping on.</p>
<p>In NJ teachers and most other government workers contribute to both the pension and social security so they receive both. The contribute 7% to the pension and 6.2% to ss.</p>
<p>Anxiousmom…I believe you are incorrect. I DO collect SS…but there is a significant reduction on my SS. Wen fit because I am collecting a teachers pension from a state where teachers do NOT contribute to SS.</p>
<p>My benefit is reduced by 2/3. And I can never collect on my husband’s SS record. This has NOT been changed…but there have been attempts at changing this.</p>
<p>Absolutely your mother could collect a SS benefit. And if she worked more than a certain %age of time under SS, then her benefit is not reduced. </p>
<p>I worked for 10 years contributing to SS, and 32 NOT doing so. Thus, my benefit is reduced.</p>
<p>Here we go! 14 states have these provisions.</p>
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<p>Both the government pension offset and the windfall elimination provision are still in effect.</p>
<p>I found out recently that I too will be penalized by SS due to the “windfall elimination provision” – and I only taught at a local university as an adjunct for 3 courses --TOTAL! I was also working elsewhere, and contributing to SS at the same time. My state required that we contribute to the teacher retirement system, even for that small amount. I made an appointment with the SS office, and they could not tell me how it will be calculated. I also called the teacher’s system, and they too could not give any estimates. Both told me I would be penalized, but could not (or would not) determine by how much. Very frustrating. If my SS benefit is reduced by 2/3, or if I can not receive 1/2 of my spousal benefit, I will be very upset, as that penalty would be significantly more than the very tiny amount I have in the teachers’ retirement system for only 3 courses! How and where can this be determined if neither agency has the answers?</p>
<p>Tom1944, thanks for that nj info.
Our son teaches in nj and has asked me about contributing to his 403b through work.
He’s very vague about his contribution to pension % and whether he will collect SS.
Of course, he should know these minor life details but hey, he’s 20something so this stuff is low on his priority list.</p>
<p>The magic of compounding IS magic so I hope to get him to focus sooner rather than later.
I work in healthcare, have a cash balance employer paid pension, a 403b with 15% contribution and hopefully SS. Plan to retire at 62, after 40 yrs working. </p>
<p>I do not envy anybody who retire at 55. But one positive thing - they let somebody else to have their position. I am much more selfhish, my job is my privilige, I will hang to it for as long as I possibly could. One benefit for others - I am not claiming my SS. </p>
<p>@Miamidap, I don’t envy them either, but unfortunately some people don’t ever get a job that really engages them, and they can’t wait to retire. Some others were laid off and retirement was a better option than year after year of depressing rejections for employment. </p>
<p>I consider becoming a SAHD a sacrifice I made for my wife and children. It has been very rewarding, but I liked my job, too. Whether that counts as retirement is a debate for another day. </p>
<p>Btw, not taking your SS is not what I would do. If you don’t need it, donate to charity, create a scholarship for some deserving kid, etc. Just my $0.02. </p>
<p>Kjof…you need to check YOUR state teachers retirement board website. </p>
<p>In CT, for example, folks who work substantially MORE in SS contributing jobs CAN collect social security. </p>
<p>For example, if someone works in a SS contributing job for 30 years, and then works in the schools here for 10 years after…they do not face that reduction. But then…their teacher’s pension would be quite a bit less.</p>
<p>If you only taught three courses in your whole career, AND worked at SS contributing jobs the rest of your career, you could be OK. </p>
<p>How many years of employment does it take to be eligible for a pension? In my state it is 10 years… after only three courses you won’t even be eligible for a pension.</p>
<p>The maximum reduction is currently $408/month, which requires a state pension of at least $816/month.</p>
<p>The SS office should certainly be able to tell you <em>how</em> it is calculated, the formula is not a secret. They can’t tell you an exact amount at this point, because your future earnings are unknown.</p>
<p>You can make some assumptions about the rest of your career and use this calculator:</p>
<p>Nice summary, Notrichenough…and you are totally correct. A person who on,untaught three courses in their entire work career would not be eligible for a pension. In that situation, I would withdraw MY contribution and put it in another tax deferred account. </p>
<p>Plus…a person only deals with WEP reduction if they actually DRAW a pension as a teacher. </p>
<p>I am not an expert in these things, but it is my impression that people often unfairly think that they’re being “penalized” for some uncrossed t or undotted i. Most of the rules were put in place to reduce the amount of double- and triple-dipping going on; my parents told me stories about their neighbors in Florida who were getting pensions in amounts that would make your head spin. </p>
<p>It’s easy to get riled up, but there usually is a rhyme and reason. Find out about things, and never sign up for things you don’t understand. </p>
<p>“I do not envy anybody who retire at 55. But one positive thing - they let somebody else to have their position. I am much more selfhish, my job is my privilige, I will hang to it for as long as I possibly could.”</p>
<p>I don’t know why you are always stuck on this, it’s not like you’re working as a fashion model or an actress. As a computer programmer, if you love what you do and are still competent, you can work as a contractor until the day you die. If you feel there is age discrimination and you will get fired and not rehired at some point, just work as a contractor at home. They don’t have to know how old you are. The only thing stopping you from working till you die is yourself.</p>