What state do you live in? That’s where you need to start, reader. In some states, as you add years into the teaching pension system, you lose years in your social security benefits. You can end up with no social security, all those payments wiped out by something innocuously labeled an “offset.”

Most states are “safe” for that mid-life change. Where teachers are tied to social security, the benefits don’t disappear because of a career change. However, teachers in 12 states — Alaska, California, Colorado, Connecticut, Illinois, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, and Texas — are not using Social Security for teacher pensions. One group of outliers also exists: I have no idea how this works, but in Georgia, Kentucky, and Rhode Island your social security coverage will differ by school district.

So what do you do if you live in the fifteen states listed above? RUN THE NUMBERS. RUN ALL THE NUMBERS AND UNDERSTAND THE NUMBERS. You will have to make some projections, but you cannot simply assume “it will all work out alright.” That’s not necessarily the case. If you have a pension from a job where you did not pay Social Security taxes, your benefit will likely be reduced by the Windfall Elimination Provision (WEP). One very important point: That sheet that social security sends you regularly? It lies.

Social security is not tracking your time or benefits in the public sector. That Social Security statement does not reflect reductions in benefits from the WEP. Not until you file for your social security will the Social Security Administration do the necessary calculations to figure out how much your reduction will be if you appear to qualify for both Social Security and a non-covered pension. In the worst-case scenario, you will lose all or almost all your social security — which may not be problematic if your public pension is good enough, although given that you paid into social security, this whole situation leaves a vile taste in my mouth.

Another term readers should know: Substantial earnings. It’s not enough to have paid $$ into social security during a given year for that to count in your calculations. You have to have made “substantial earnings.” Below is a chart of the substantial earnings by year which would be required to sidestep the WEP. (Teacher’s Retirement and Social Security (2021 Update) – Social Security Intelligence.)

I should note the above-cited website makes the WEP sound like no big deal at times, despite the fact that the WEP has a large impact on some pensions. It’s true that thirty years of substantial earnings into social security and the WEP is eliminated. It starts to be phased out at 20 years. Here’s one takeaway from that fact: If you are at 25 years of substantial earnings into social security and left the private sector to go into teaching late in life, but are not happy with your position right now, it might be a smart move to leave and spend five more years in the private sector to get your full social security benefits. You have to run the numbers to check what the impact will be from returning to your private-sector career choice — but that impact might be worth the move, especially if the stress of your teaching position has been wearing you down.

Eduhonesty: I kind of hate this post. I hate it because I don’t think it will work in many cases. I think Americans often have a regrettable habit of assuming everything will work out somehow when they get older. I remember a discussion I had years ago with my brother about 50-year-old coworkers of his who were suddenly entering a sort of panic mode as they realized that they might be in a world of retirement hurt and they genuinely did not have time to fix their situations. Retirement planning does not allow for last-minute rescues and quick fixes.

Fellow teacher or anybody else out there reading this post?

WHAT IS YOUR RETIREMENT SITUATION?

If you are in those fifteen states listed above, and you will not make it to your full teaching retirement, you should take this month to find out just where you are at. It’s not so simple. Here’s a quirky fact to chew on: Due to my years as a stay-home mom here in Illinois, I would normally benefit noticeably from taking 1/2 of my husband’s social security.* Except I don’t. Due to the WEP, it makes as much sense to use my own benefits because I lose all the benefit from his higher social security due to the size of the offset. I’ll get the same total amount from social security because the extra from his higher benefits gets wiped out. Another little quirk worth noting: Social security uses the time when you apply for social security benefits as the time when they determine the amount of your teaching pension for their offset calculations. That matters because my teaching pension goes up annually. Smaller teaching pension = potentially higher social security.

You have to do the numbers to see how this will play out. One way it might play out is to make retiring earlier under the social security system more attractive. All that talk about how it’s more advantageous to retire at 66 years and two months or whatever the full retirement age will be for you? That talk is for the average social security recipient. The size of your teaching pension affects your bottom-line for social security benefits and in states with annual pension increases, getting your social security sooner may make financial sense.

If all this math seems daunting, reader, who could you ask for help? I’d like to suggest any readers fuzzy about their retirements take June to find out exactly how they are doing. Check with social security once you get underway, but make sure you get the right help. I did not get the same answers from the two people I asked in social security. I trust Guy #2. It’s sobering that Guy #1 — an individual in the social security office — did not get his numbers right.

Readers on the fence about going back next year, especially if you are older and live in those fifteen states, make retirement part of your planning process. Even if you are younger, sometimes retirement should be in the picture. If I were one year from being vested in a solid system, I might postpone my departure from my district for at least one more year.

This post is rather nebulous, but individual circumstances vary so much I don’t see a way around that lack of concrete detail. Illinois has an excellent public pension system (enough so that people worry about the solvency of the state government) and being part of that system for a long enough period of time definitely beats social security, although new tiers of retirement benefits ensure that new hires don’t do as well as hires of the past. States have their own systems. How yours will work for you will take some sleuthing.

If you came to teaching late, though, that sleuthing ought to be bumped to the top of the to-do list for June. This is especially true for those who stayed home or worked part-time while the kids were small. Part-time may not have reached “substantial” earnings. How can you maximize your retirement? Can you avoid taking a deep financial haircut due to the WEP? Who can you ask for help to figure this out? Will more time in either the public or private sector help substantially? How much time? Should you take social security early retirement, given that you are not the average bear, and your pension may see an effective increase from a lower teaching pension before cost-of-living increases? This is a personal quest. No internet article can do it for you. Too many factors are in play — and you ignore those factors at your own risk.

As you do your calculations, don’t ignore health insurance, the invisible elephant that many people do not appreciate when their employer is providing that insurance. The average cost of health insurance varies widely depending on where a person lives and their age. Bridging the gap until you qualify for Medicare can be pricey. (How Much Will Health Insurance Cost in Retirement? | The Motley Fool) Here is one actual number: “For example, a 62-year-old woman living in Charlottesville, Virginia, and earning $50,000 a year (slightly over 400% of the federal poverty level) would have to pay, at a minimum, a premium of $797 per month, or nearly 20% of her income, for a bronze plan purchased through Virginia’s health insurance exchange.” (Health Insurance Solutions for 60+ Year Olds Not Ready For Medicare – PivotHealth.com) It helps to fall below the poverty line. Subsidies can help rescue a low-income person.**

Here is my eduhonesty honest truth: If I didn’t have a supportive family and I hadn’t married the finance guy, I might be living in a little trailer or a one-bedroom apartment right now. Local cost-of-living would force me to relocate. I’d probably pick a small, rural town with fishing and good thrift shops. The urban areas I can afford on my pension are simply unsafe — crime rates are running too high for a petite senior citizen. I’d be getting an occasional beer at the one small tavern in town, trying to avoid the pricey little convenience store, while waiting for the government pantry to give me my milk, cheese and other groceries on Wednesday. I’d count my teacher’s health insurance as a real piece of luck — one that not everyone out there will be able to duplicate.

I’ve heard far worse plans than that hypothetical retirement above, reader, but I strongly recommend you explore your own retirement options sooner rather than later, especially if you live in those fifteen states listed above. June is a perfect time, this June, right now — before it’s too late to make changes that might make your last maybe thirty-some years easier.

Hugs to my readers, Jocelyn Turner

*If you don’t understand what I just wrote, you have a retirement planning emergency on your hands. Please open up Google and start with something like, “how do social security benefits work,” understanding that if you are a teacher in those fifteen states they DON’T WORK LIKE THAT FOR YOU. But get started on learning how the federal and state systems operate.

** The Affordable Care Act is under attack right now, though, so I would not count on ACA benefits. My Twitter feed is filled at the moment with people who are worried about a SCOTUS ruling on the ACA — both because of possible cost increases and because the ACA did away with the ability of insurance companies not to cover pre-existing conditions. Those pre-existing condition clauses can return. What the government gives, the government can take away.