While I don’t see a problem with this, the politicians here NJ seem to. There was a bill introduced that would prevent anyone collecting a government (state or local) pension from securing another government job that paid more than $15,000 per year. Even if the new job did not have pension benefits. WTF? Why should I be excluded from applying for a job? What does one thing have to do with the other? These politicos raided our pension fund, failed to pay the money back, stopped paying into the system as required and then blame those who did their time and paid their fair share for budget problems. Its effen unbelievable that they can do it with a straight face. Rant ends.
Are you making a distinction between active duty military and … something else? Have military personal always paid into SS?
In the 1980s the federal government changed the retirement system substantially so that NEW government employees pay into SS. Before that they didn’t and there are still many, many feds who don’t pay into SS. Almost anyone hired before 1982 (or was it 1984?) in fact. This gave SS a nice boost at the time in new, young employees paying in who wouldn’t expect anything from the system until many years later, which is where we are now. On the other hand, the government saved a whole lot of money on the pensions funds of those new employees.
The distinction I’m making there is just what I have experience with. I was first active duty military in 1979 and paid social security taxes. I have no first hand knowledge about guard, reserve or active duty prior to 1979.
The “most (if not all)” part was referring to the fact you cite about federal employees once being exempt and new employees now being in the SS system.. An imprecise term like “most” doesn’t necesarry conflict with imprecise terms “many, many”.
Turns out the military and social security have an odd relationship that I never knew about.
Long story short: Active duty military has paid SS since 1957 but they actually get a small addition to their credits. Inactive military apparently started paying SS in 1988.
I worked for a private company that has (sorry, had) a 30-and-out policy. We used to rag the ones who had been there 30-plus years, that they were working for less than minimum wage. Let’s say the guy earns $50,000. He would get a pension of almost $25,000. So essentially, he’s working for $25,000 a year. But, in Canada, that extra $25K is probably taxed at about 35%, so he’s actually working for $17,500 a year. That’s $8.50 an hour, close to minimum wage… not to mention the cost of using a vehicle to get to work, etc. - expenses not spent when retired. Plus, each extra year added 1.5% to retirement benefits. The only real benefit was if your wages actually went up a lot too, ths improving your “best 5 years” average. How many guys with 30 years in already were in line for a sudden large promotion?
The OP question points out a two-edged sword of retirement benefits. They are offered to induce people to join the workforce, and encourage longterm loyalty; but at a certain point, they are a disincentive for your best and brightest to stay. At about 15 years in, the transfer to RRSP (or 401K in USA) net present value of the pension was about half a year’s salary, and starting over elsewhere meant working to age 65 to get an equivalent pension - a good incentive to stay put. At 30 years, the incentive is to quit and go elsewhere or contract; the benefit of staying a lot more years is pretty low.
Who better to contract for short-term positions (government or private) than people who know the ropes and have 30 years experience with the systems? We had one fellow who was laid off in bad times and got 2/3 of a 30-year pension (Ontario regulations) and refused to come back on as a staff member. WHy should he? He got a substantial pension and they paid him twice what he got as a salary to be a contractor, more than the moron boss who laid him off due to personality conflict. If he came back, his deal was cancelled and he would rejoin the pension plan to collect a normal pension in another 10 years.
OTOH, in Canada we have normal health care for all so who provides what benefits is irrelevant.
Unless you’re in a combat zone, when your pay is tax free. Or at least it was in Vietnam.
Some districts are cracking down on retired teachers coming back to work for the district as substitutes. I don’t remember the justification for this, and I probably didn’t understand it when I first heard about it.
Nope, it still is. Which makes the bookkeeping for Airman Doors’s deployments a lot of fun.
IMHO - I believe the distaste that some people have for this (and the use of the term “double-dipping” to demonize the practice) is this - those of us not in the military, or government employ, who do not have a 30 and out retirement, are never in a position to avail ourselves of this practice.
We can only “retire” (and draw any monies SS or IRA or 401k) once we have achieved an age, not a tenure. Therefore the only people who can engage in this practice are Military/Gov’t Employees - those who have a Pension AND the ability to Retire based after a (in our opinions) short-ish duration of service (start at 18, work 30 years, retire at 48).
For those of us working in private sector, this early retirement/pension and second career are simply not available.
I personally got no problem if local governments or the military have to provide these types of incentives to get the right people to apply and work in these types of positions. However, if there is no shortage of applicants looking for this type of work (military, fire and police officers, etc.) then there is no reason for the government to continue offering these types of perks.
With caveats that my last first hand info with this was 12 to 15 years ago, when Bosnia counted for this exclusion, it was only income tax that was dropped. SS tax was still paid.
Interesting. The statement that the SSA sent me showed no SS tax paid in my first years in the military. Then again, I didn’t make zip.shit back in those days. When your paycheck is only $90/month, it doesn’t leave much for taxes.
I’m looking through Airman’s LESs for the time when he was deployed last, and if I’m reading these right (because I don’t want to go through all of them for one GQ post), he had the tax money deducted on the one end, but refunded on the other end. (Payments show a “tax refund”, but there were still taxes deducted.) I have no idea why the government does it that way, but there you go.
(I told you the bookkeeping is fun!)
as an added note on military retirees double dipping federal retirement, right around the time I went into the army (not sure if it was before or after) the federal government eliminated this possibility. if someone retires from the military and then takes a job at the USPS or other federal employment, and then retires again, they do NOT get two pensions, their time in the military is credited to their retirement from the second federal agency. sooo a 20 yr retirement from the army followed by employment at the USGS say, will make you eligible for a single 30yr pension after 10 yrs at the USGS
Then can we discuss why teachers cannot draw both their pension and social security?
Why can’t teachers draw both their pensions and social security? Did they pay into SS? Were they covered by a pension plan?
At least in Texas, teachers have a pension plan that does not participate in Social Security, so generally a teacher can’t have a pension **AND **draw SS benefits. There are, or were, loopholes to get around this, but those ways I believe have been done away with.
-JR
Not quite. You can take the military retirement OR the other federal retirement after 20 years, OR you can buy back your military time (which isn’t cheap) and apply it to your other federal time to retire early. It’s also different for officers and enlisted. Officers can’t draw military retirement and federal salary at the same time in some federal organizations. Enlisted men have no such restriction.
Some unions don’t have SS taken out of their paychecks. You can’t draw it if you don’t pay into it.
It’s more than just not paying in. Even if a teacher, in another career, drew social security, or is entitled to social security, it is significantly reduced if they also draw a state pension.
So if Suzie works as a lawyer for 15 years and submits the max possible social security, and then quits and becomes a public school teacher, and then retires, her social security checks will be substantially reduced: I think they subtract 60% of the monthly pay out of your pension from your social security. In many cases, that’s all of it.
If Suzie works as a lawyer for 15 years and then quits and lives off her trust fund, she draws all of her social security when she hits 65.
You’ll have to provide a cite for that. There is nothing about teachers being any different on the SS website. Why would a teacher be different than any other job? If you don’t pay in, or don’t have enough taxable income, you’ll receive either none or reduced SS. From the website:
Note that it applies to anybody, not any specific job such as teachers.