Your Social Security by Tom Margenau

Q: I am wondering if you can help me with a midlife career decision. I am in my early 50s and am thinking of giving up my current job to do what I've always wanted to do: go into teaching. I've read a column you recently wrote about how a teacher's pension can reduce a Social Security retirement benefit. You explained the reasons for the reduction and I agree they make sense. But I still want to know how I will be impacted. I have worked and paid Social Security taxes since I was 20 years old. I hate to think that all the money I put into the system will go to waste if I take a teaching job. What should I do?

A: You should pursue your dreams and not worry about Social Security. If you take the teaching job, there may be a very slight reduction in your eventual Social Security benefit, but I don't think it's enough to give up a chance at fulfilling your lifelong career wish.

First of all, there would be no reduction at all if you take a teaching job that pays into the Social Security program. Most teaching jobs are covered by Social Security. But because your e-mail address shows you live in Texas, I'll assume you're talking about a teaching job in the Lone Star State. And Texas is one of the few states where teachers do not pay into Social Security.

As I explained in the column you mention in your question, the law says that if you collect a pension from a job that was not covered by Social Security, but if you also paid enough Social Security taxes in other jobs to also qualify for a Social Security retirement benefit, that benefit will be reduced because of the non-covered pension.

The reduction can be as high as almost 50 percent. In other words, if the annual computerized estimate of retirement benefits that you currently receive from the Social Security Administration says you can expect to receive $2,000 per month, you might actually be due only $1,000 per month if you also collect a Texas teacher's pension.

BUT — and this is a really big BUT — the law says that the more time you've spent at jobs where you paid into Social Security, the less the reduction will be.

In fact, if you have 30 or more years of "substantial earnings" under Social Security covered jobs, there would be no reduction at all. The Social Security Administration produces a fact sheet that lists a year-by-year breakdown of what they call "substantial earnings." You'll find it on their website at www.socialsecurity.gov/pubs/10045.html.

But just to give you an idea: in 2008, SSA said that an income of $18,975 per year was substantial. And 30 years ago, in 1979, they said that $4,725 was a substantial annual wage.

You said you've been working since you were 20 years old, so my hunch is that you have 30 years of "substantial" Social Security-covered earnings. That means you will be able to collect your full Social Security benefit and your teacher's retirement pension.

Even if you don't have quite 30 years of substantial Social Security earnings, you'll still be OK. The reduction gets smaller and smaller the closer you are to the 30-year benchmark. If, for example, you have 28 years of substantial Social Security earnings, your Social Security retirement benefit might be cut by only 5 percent or so.

And whatever reduction, if any, you might see in your Social Security benefit would be more than made up for by the amount of your teacher's pension.

So enjoy life and fulfill your dreams and become a teacher.

To find out more about Tom Margenau and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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