re: Social Security Fairness Act

Example: As of now Teachers collecting from their Teachers Retirement cannot collect SS even if they have worked in the private sector and earned enough credits.

For my wife she took her 20 year retirement from the Public School System. She went right to work in the private sector and has been ever since. This will allow her to collect on what she paid in.

Ok, thanks for the lesson. I actually feel a bit better.

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Seems like the 3 million government workers shoulda known that their government pension would rule out any social security.

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Yeah this is bullshite.

I worked for nearly 20 years in the private sector before becoming a federal government employee, and have paid into SS the entire time.

Should I just forfeit the money I've put into the pot because I've got a pension plan that doesn't even come close to replicating what I've made my entire working life? Maybe if I could opt out of SS from here on out until I retire in about 25 years, but I've paid in since I was 13 years old.

You can collect federal pensions, state pensions, city pension and military pensions all at once with no penalty. When I left government I wanted to work private because I didn’t want to be a career public employee. I have friends who retired from the state and worked for a city/federal government to be able to collect multiple pensions even though they were offered private jobs. I don’t think it is fair to financially push them to remain government employees. Just treat everyone fairly. Some invested in a government pension and some into 401 k. Would you like your SS reduced because your 401k is deemed to have too large a balance?

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Do you know who pays for that? Others who have government collecting money out of their check who will never see those dollars come back.

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The city I work for pays into our pension fund along with all employees. Yes, that comes from city taxes. But our pay is lower than the surrounding area and almost all firefighters have secondary jobs to make ends meet. I'm retiring next year and my pension isn't what some of the examples here suggest. I'll have to get another job because I'm losing 20+ years of SS I've paid into.

Your employer pays SS tax and passes that expense down to consumers. Consumers will never see that money back that is going to subsidize your SS benefits.

I think it's been pretty well explained, but in case, here's how it works. My wife put in 20 years and receives $22K per year from state teachers' retirement system. She has worked about 19 years self employed after retiring, and pays 12.4% to SS since she is self employed. Her SS, when we retire, would be approx. $1,700 per month (from memory, did not log in). Her Windfall Elimination Provision (WEP) offset would be the max, which is $587 per month, so she would receive a little over $1100 per month from SS. It also affects the amount of SS that she would receive upon my death.

I would love the extra income, and the WEP was not fair to begin with, but I wonder how our broke SS system is going to pay the promised benefits even before eliminating the WEP.

Side note. I know that most teachers seem to be unhappy with their pay, benefits, etc. but we have been collecting a pension for 17 years, and are not yet SS's definition of full retirement age. I think it's a pretty generous pension.

It's especially lucrative for someone who received a promotion/pay increase at the end of their career. SS uses a 35 year average vs teachers' pension which utilizes three highest years. Let's say two people did the identical job and were paid $50K per year toward the end of their career. One of them gets a promotion and a bump to $65K for the last three years. 2.5 x 30 = 75%. One gets $3750 for life, and the other gets $4875. $13,500 per year for what could be 40 years is more than a half million $ for those three years of work. Using a longer period to calculate average salary makes a lot more sense.

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That doesn't sound sustainable.

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For the state of Louisiana workers they use LASERS. LASERS is very very healthy and has been for a long time. They have actually had more than enough money to fund COLA for all retirees, but Jindal shut it down when he was in office because of "perception" during the last recession.

LASERS will always be healthy. It's the retirement the state politicians pay into.

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LASERS will always be healthy.

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Any state system will be healthy if they tax residents enough to pay for it.

I'm speaking more from a public perception angle. Those retirements don't really exist in the private sector any more because they just cost too much.

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They pay 8% of their gross salary for that retirement.

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That's not funding a 75% retirement at 30 years. It's not coming close.

I put these numbers in a Charles Schwab retirement calculator. Someone starts working for the government at 20 and retires at 50 with 75% of their $50k income, and their only retirement account is one they put 8% into.

Here's what it came back with:
Your Savings Plan Needs Adjustment
Based on the information you provided, you will need to save an additional $1,662,4001 to retire at the age of 50 with your current savings plan.

Here are some possible ways you can take to get on track:
Change your retirement age to 75; or
Increase your annual retirement contribution to $21,3002; or
Reduce your spending while in retirement to $7,0002 per year.