Jonathan Clement's By The Numbers: Social Security Statement

Ted

FYI: ( I earned all of my social security credits through part-time jobs. For most of my career I was a school teacher and did not pay into the fund.)

AROUND THE TIME of my birthday each year, I request a copy of my Social Security Statement. This year, as l reviewed my report, I realized many life stories lie behind the numbers that appear in my earnings record.
Regards,
Ted
http://www.humbledollar.com/2018/07/by-the-numbers/

bee

Many are surprised that teachers salaries are often not part of Social Security system. Though Ted's part time jobs most definitely had deductions for SS & Medicare (teachers do contribute to Medicare), it's doubtful his SS pension is anywhere close to a SS full benefit.

I have accumulated 30 of my required 40 credits by also holding a host of part-time jobs as well. I will continue this until age 70, but my prospects are not good for collecting any Social security on that record. I mainly do these PT jobs for other reasons (added income, retirement contributions, self employment deductions, etc.)

Teachers who have accumulated at least 40 credits with SS face two SS provisions that eliminate or severely reduce a workers SS benefit,

The WEP (Windfall Elimination Provision) and GPO (Government Pension Offset)...explained here:
massretirees.com/wepgpo-explained

Often the teacher pension (a state obligation) wipes out any SS benefit that teachers have earned by holding a series of part time job or having a second career.

From the above article:

Ted

@MFO Members: bee said, "it's doubtful his SS check is anywhere close to a SS full benefit." Bee is correct, it's only about 80%.
Regards,
Ted

bee

@Ted...curious if you waited until age 70 to start collecting SS. Did these provisions impact your decision as to what age to take SS?

catch22

Tangentially related, I do hope.

Lots of strange little things have gone forth over the years regarding pensions, SS and the IRS.

---New York teachers retirement: To the best of my recall from a number of years ago reading; NY teachers (union contract/IRS agreement) were not required to pay into SS and thus not eligible for SS from this employment. Correct me if I'm wrong.

---Michigan teachers and SS

Michigan teachers and SS

---UAW and SS: pension amount paid by company reduced by the amount of SS benefit. Keep in mind that with the pre-market crash UAW contracts were much different than after the GM bankruptcy. Also keep in mind, these "prior" contracts contained a 30 and out pension. During the "hay day hiring", especially in the 60's; an 18 year old could walk into many UAW auto locations and be hired on the spot. These same folks could retire with a smaller pension at age 48. They would receive their C.O.L.A. full pension until beginning SS, when the full pension benefit would be offset by their SS monthly benefit.

Earlier UAW retirees and SS

---During the burn down period/born again period of GM; the company wanted to clean house of the old timers, both blue collar and skilled employees. I recall an electrician being offered a buy out to leave, meaning "will you please retire". The juicy part was that the "buy out" had a special feature, via IRS/GM; that your buy out dollar amount could become "instant" IRA/401k monies for tax purposes. I know of others; not being involved with such a large company with so many employees nationwide also being offered buyouts; but these were small organizations. No special "provisions" for their monies; just take the cash. I can't readily find the IRS ruling info I expected to discover. If I am in error with this; or if you can find info about this; please let me know.

Buy Out Terms

'Course, worse things can happen, yes? During a period of about 10 years prior to the GM and related bankruptcies, two folks in particular, who I knew well enough to discuss stuff noted:
1. GM skilled trade, tool and die maker. Stated that he had not taken advantage of the 401k program and kept all of his invested money in GM stock. Yikes. His reasoning was that GM has always done well. Don't know his fate with this; but can guess that the outcome of this investment choice was not so happy.
2. AC Spark plug/Delphi employee well up on the top tier of management. All of his investments became some form of Delphi stock. The last time I checked during the melt down period (Delphi melted in 2005, basically from corrupt accounting practices and cash problems... a different story), the stock was worth $.17/share. I can not find any historical price data for this stock. He and his wife did have monies in CD's at a bank and paid off real estate and survived monetarily.

#*#% happens, eh???

Regards,
Catch

Old_Joe

San Francisco is (was?) an outlyer with respect to SS and teacher's retirement. Back in the 60s SF teachers were given a one-time choice to either continue contributing to SS, or to quit SS and join the California State Retirement System (STRS). After that time teachers were no longer able to contribute to SS, as is, I believe, the situation nationwide with most teachers.

Fortunately my wife-to-be chose to continue full contribution to SS and join STRS. Evidently she was in a small minority of SF teachers who did so. Consequently we are now very fortunate in having two full SS incomes in addition to our pensions.

That's the main reason why, unlike Ted for example, we are much more conservative with our investment portfolio, and choose to maintain a large cash position at all times. As it turned out, due to additional saving and also maximum contributions to IRA and 401k plans we have never had a need to tap our investment portfolio for actual income. My objective in portfolio management is simply to generate enough income to keep it a bit ahead of inflation.

Ted

Old-Joe: "we have never had a need to tap our investment portfolio for actual income." Does that include dividends and interest:
Regards,
Ted

Old_Joe

Yessir, the dividends and interest are left to accumulate. With no mortgage and no debt we're able to afford SF, and do a fair amount of traveling as well. Although no travel this year, as we spent a fair amount to get rid of a large lawn and install low-water requirement landscaping.

Ted

@Old_Joe We both are very fortunate to have financial security, unlike many others.
Regards,
Ted

Old_Joe

@Ted- Absolutely agree with you on that. Pure luck was a big part of it, with respect to our lives coinciding with a time-frame when you could do very well financially with just a reasonable amount of work and good savings habits. Today's situation is much more difficult for the younger people.