FAQ: TRS and Social Security

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TRS Retirement FAQ 4: Social Security

Can I Draw Social Security and TRS At The Same Time?

Can I draw TRS benefits and also get Social Security?

Windfall Elimination Provision (WEP)

This explains how your social security benefit might be reduced. This provision reduces most educators’ Social Security benefit by about one-half. In other words, if the estimate you get from the Social Security Administration says $1000 per month retirement pension when you reach “full retirement age,” you can most likely expect to get around $500 to $600.

 There is a rule that says the reduction in your Social Security benefit cannot be more than one-half of your TRS pension. If you have 30 or more years of substantial Social Security earnings, the windfall provision won’t apply and your benefit will not be reduced.  A chart giving a year-by-year breakdown of what the government considers substantial earnings is available at this link.

 If you would like to use the WEP calculator to determine how much Social Security you will receive, here are the directions. 

If you are eligible for Social Security benefits and want to know how much TRS will cause your Social Security benefit to be reduced, follow the steps below.

  1. Goto: http://ueatexas.link/SSACalculator
  2. Scroll down the page until you get to the: Date of Birth
  3. Fill in the Date of Birth blank.
  4. Fill in the Age at Retirement blank.Estimate it if you are not sure.  Your statement from Social Security will tell you the earliest date you can draw Social Security.
  5. Select Today’s Dollars
  6. Non-Covered Pension Amount – For now leave this at 0
  7. Annual Earnings Covered by Social Security- use the statement Social Security mailed you, or if you don’t have that, go to www.ssa.gov and register. You then select earnings record at the top of the page. Be sure to use the column that says: Taxes Social Security Earnings and NOT the Taxed Medicare column.
  8. Now it will ask you to estimate you next two years earnings covered by social security.  You can estimate this or leave it at zero.
  9. Hit the calculate button.  This will give you what would draw if you did not have a TRS pension.

Now let’s see how much you lose because of the TRS pension.

Go back to the blank that said:  Non-covered Pension Amount.  Put an estimate of the gross amount you will draw from TRS per month.   Go to the bottom and hit calculate again.  This is what you will actually get from Social Security.   Compare this to the first number and you can see how much you will lose.

Will TRS affect my spousal benefit from Social Security?

Government Pension Offset Note: This explains how your spousal benefit might be reduced.

You are eligible for one-half of your spouse’s social security if he/she is living, and 100% of the social security benefit if he/she has passed; however, if you are drawing TRS, Social Security will subtract two-thirds of your TRS from the spousal benefit.  NOTE:  You cannot receive both your Social Security benefit and your spousal Social Security benefit.  You will receive the higher of the two.

Example: A teacher draws a TRS pension of $3000. His/her spouse is living and draws $2000 a month from Social Security so the spousal benefit is one-half, or $1000. If we take two-thirds of the TRS benefit ($3000) that comes out to $2000.

 Spousal Benefit = $1000 -$2000 = $0

 There would be no spousal benefit. In most cases, long time educators will receive no spousal benefit.

 Let’s look at a low income TRS retiree who draws $1100 per month and qualifies for the same $1000 spousal benefit. Two-thirds of $1100 is $733.

 Spousal Benefit = $1000 – $733 = $267 so this person would receive a $267 spousal benefit.

General Rule: Most teachers get about 50% of their own Social Security and no spousal benefit.

 An exception – If you have 30 or more years of substantial Social Security earnings, the windfall provision won’t apply and your benefit will not be reduced.

Do I need to let Social Security Know when I begin drawing TRS?

Yes! If you are drawing Social Security when you retire, or when you start drawing Social Security in the future, you should be certain that Social Security knows the amount of your TRS payment.  If Social Security does not lower your payment when you start receiving your TRS pension, then Social Security will reclaim the money from your future Social Security checks.  Call TRS at 1-800-223-8778 for a pension verification letter for Social Security.

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