When I Retire, Can I Collect My Pension AND Social Security?

Retirement from teaching brings with it many complex financial questions. One of the most common is “Am I entitled to collect my pension and Social Security?” Two scenarios could allow you to receive both.

1. Being qualified to receive your own Social Security benefits
2. Collecting Social Security benefits based on your spouse’s working history

However, even if you fall into one of these categories, there are some provisions that make sure you don’t “double-dip” into both a government pension and the Social Security system. Let’s take a closer look at each scenario.

Question: Can you collect your own pension and Social Security benefits?

Teachers in some states benefit from the state’s independent pension plan, while other states offer only coverage in partnership with Social Security. Teachers in the latter states have an easy answer to the question of double-dipping into pension and Social Security. They’re simply the same thing, so double-dipping is not possible.

Teachers who may find the rules more confusing are:

1. Those who teach in states with independent pension plans
2. Those who’ve worked in a capacity besides teaching and have paid into Social Security through that work

If you fall into either of these buckets, you may be eligible to receive benefits. However, you must first qualify. Qualifying is based on earning income credits. For every $1,300 you earn, you get one income credit. But you can only earn up to four credits per year. Forty total credits are required to qualify for Social Security benefits, which means you’d need to earn four credits per year for 10 years to be eligible. There is no partial benefit, it’s all or nothing.

Answer: If you are eligible for Social Security benefits based on your own earnings history, you will receive some benefits.

Let’s look at an example of a teacher in Illinois—a state with an independent pension plan. Upon retirement, she will receive her TRS pension. But she also worked in the corporate sector before becoming an educator and earned 40 credits. Thus, she is eligible for Social Security. Will she receive it?

Some of it, yes. She will not be able to collect the full amount of Social Security as listed on her statement, due to the Windfall Elimination Provision (WEP) which does not allow a person to collect two full government retirement incomes. The amount that she can collect is determined by this calculator. It takes into consideration the amount of your pension and then decreases the amount of your Social Security by a factor. While WEP cannot completely eliminate your Social Security benefit, it can reduce it to a very small amount.

Question: Can you collect your own pension and spousal or survivor Social Security benefits?

Again, the answer will depend on the amount of your pension and the amount of the Social Security benefits. The Government Pension Offset (GPO) applies to individuals who want to collect spousal or survivor benefits but receive a government pension. Like WEP, GPO will prevent you from double-dipping into government funds.

The main difference between WEP and GPO is that GPO is based on someone else’s employment history. That means that the cut-off for being denied Social Security benefits is quite low. The provision states your potential survivor benefits may be reduced by two-thirds of your current pension amount.

Using the GPO calculator is quite simple. You enter the amount of your pension and the amount of spousal benefits you are entitled to. Then you’ll find out how much Social Security benefit you may receive. It’s a 2:1 reduction, so once your pension starts to go above the amount of your Social Security entitlement, the benefit you’ll actually receive starts to decline rapidly.

Answer: It depends on the amount of your pension and your spousal or survivor benefit.

Traditionally when a spouse passes away, the survivor is entitled to collect 100 percent of the deceased’s Social Security benefit, if it is larger than their own. However, a spouse is only entitled to receive 50 percent of living spouse’s retirement benefit. That’s why it is rare for teachers to receive any spousal benefit if their spouse is alive. Their pension is usually larger than 50 percent of their spouses’ Social Security benefit.

So let’s say a teacher wants to collect her deceased husband’s benefits. She already receives $3,500 per month from her teaching pension and her husband’s Social Security benefit was $1,750 per month. She would not be eligible to receive anything. Why? Her pension is too large. In order for her to receive benefits, her pension would have to be closer to $2,500 per month. And even if that were the case, her survivor Social Security benefit would be under $100 per month.

Every teacher’s retirement scenario is a little different. It’s important to be aware of the rules so you don’t have any surprises upon retirement.