How do you find out how much Social Security you can get when retiring if you worked in the private sector?
If you’re a CalSTRS member, you don’t pay Social Security taxes on your income as a California educator. Instead, you pay a higher percentage of your earnings into the CalSTRS fund (8% as of 2011, compared with 6.2% that workers pay into Social Security, although that was reduced to 4.2% for 2011 only) to provide income when you retire. Therefore, you do not qualify for Social Security benefits at retirement based on your employment as an educator.
You may qualify for Social Security benefits through another job. But if you do, those benefits may be reduced by the Windfall Elimination Provision (WEP). This provision is intended to eliminate an advantage that existed before it took effect in 1983 for retirees who receive both pension benefits and Social Security benefits. The WEP may affect you if you earn a CalSTRS pension and you also work in other jobs long enough to qualify for a Social Security retirement benefit. In most cases, that means working at least 10 years in another job.
You can learn more about the Windfall Elimination Provision in the Ask the Advisor section at CTAinvest.org. You may also want to use the online calculator from the Social Security Administration to estimate your benefits.
Important Note: CTA does not give tax, legal or investment advice. You should meet with your tax, legal, and/or investment advisor to determine the best fit for your situation.