Can You Collect Teacher Retirement and Social Security?

It is common for individuals to inquire about combining retirement benefits from their teaching careers with Social Security benefits. Historically, this area involved specific provisions that could affect the amount of Social Security benefits received. However, significant legislative changes have recently altered this landscape. Understanding the nature of teacher retirement systems and how they interacted with federal Social Security programs provides important context for these changes.

Understanding Teacher Retirement Systems

Teacher retirement systems are typically established at the state or local level, often operating independently from the federal Social Security system. These systems are usually defined benefit plans, meaning they promise a specific monthly payment upon retirement, calculated based on factors such as years of service, salary, and age. Contributions to these plans are made by both the employee and the employer, with a percentage of the teacher’s salary automatically deducted for their pension.

A defining characteristic of many of these public employee pension plans, including those for teachers, is that they do not require contributions to Social Security. Instead, participants contribute solely to their state or local pension fund. This distinction means that for a significant portion of their career, individuals in such positions may not have paid Social Security taxes, which are known as Federal Insurance Contributions Act (FICA) taxes.

Impact on Your Own Social Security Benefits

Historically, individuals who received a pension from employment not covered by Social Security, but also had earnings from Social Security-covered jobs, could see their own Social Security retirement or disability benefits reduced. This reduction was due to a provision known as the Windfall Elimination Provision (WEP). The WEP was enacted to prevent an unintended “windfall” for workers who had relatively short careers in Social Security-covered employment but also received a separate pension from non-covered work. It aimed to ensure that the Social Security benefit formula, which is designed to provide a higher percentage of replacement income for lower-wage earners, did not disproportionately benefit those with substantial non-covered pensions.

Before its repeal, the WEP adjusted the Social Security benefit calculation by modifying the primary insurance amount (PIA) formula. This formula included a 90% factor applied to the lowest band of average indexed monthly earnings (AIME). Under WEP, this 90% factor was reduced, sometimes to as low as 40%, depending on the number of years an individual had substantial earnings in Social Security-covered employment.

However, the Windfall Elimination Provision (WEP) is no longer in effect. The Social Security Fairness Act of 2024, signed into law on January 5, 2025, fully repealed the WEP, with the changes applied retroactively to January 2024. This legislative action means that affected individuals are now eligible for their full Social Security benefits based on their covered earnings history, without the reductions previously imposed by WEP. Retroactive payments covering the difference in benefits from January 2024 are also expected for eligible individuals.

Impact on Spousal or Survivor Social Security Benefits

Another provision that historically affected individuals receiving a pension from non-covered employment was the Government Pension Offset (GPO). The GPO specifically applied to those who were eligible for Social Security spousal or survivor benefits based on someone else’s earnings record, such as a spouse or former spouse. The purpose of the GPO was to prevent individuals from receiving a full Social Security spousal or survivor benefit in addition to a government pension earned from work not covered by Social Security. It aimed to create a more equitable outcome, similar to how Social Security’s dual entitlement rule offsets a person’s own earned Social Security benefit against any spousal benefit.

Before its repeal, the GPO reduced the Social Security spousal or survivor benefit by two-thirds of the amount of the non-covered government pension. This offset could significantly reduce or even completely eliminate the Social Security spousal or survivor benefit, depending on the size of the government pension. The GPO was distinct from the WEP, as it targeted dependent benefits rather than an individual’s own earned Social Security benefits.

As with the WEP, the Government Pension Offset (GPO) has also been repealed. The Social Security Fairness Act of 2024 eliminated the GPO, effective retroactively to January 2024. This legislative change means that individuals who receive a pension from non-covered employment will no longer have their Social Security spousal or survivor benefits reduced by the GPO. This restoration of benefits aims to provide higher Social Security payments to millions of retirees who were previously affected.

Understanding Exceptions to Reduction Rules

Before the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), certain exceptions and conditions existed where these reduction rules might not have applied. For the WEP, a significant exception was tied to an individual’s years of substantial earnings in Social Security-covered employment. If a worker had 30 or more years of substantial earnings, the WEP would not reduce their Social Security benefit. For those with 21 to 29 years of substantial earnings, the WEP reduction was less impactful.

For the GPO, an important exception involved a “last 60 months” rule. This rule stipulated that the GPO would not apply if the individual’s last 60 months (five years) of employment were in a position covered by both Social Security and the government pension plan. These historical exceptions provided pathways for some individuals to receive their full Social Security benefits despite also having a non-covered pension.