There’s a common misconception among many Atlanta teachers that their retirement planning will include the three classic sources of income that most pre-retirees use to calculate their cash flow:
- Social Security.
However, Atlanta teachers may not realize that, under the original guidelines of the Social Security Act, they may not be eligible to receive any benefits.
Atlanta Teachers Aren’t Eligible for Social Security
When the Social Security Act was written in 1935, most state workers weren’t included as being eligible for coverage. While many states have since opted into the Social Security program for all of their state-employed workers, several states (or counties) have not. Atlanta happens to be one of them.
Of course, this also means that as an Atlanta public school teacher, you haven’t had to pay into Social Security during your employment. Still, for many educators, this may throw a wrench in how they were planning to fund their retirement.
Are You Eligible for Any Benefits?
This is where some confusion around Social Security benefits eligibility begins. Although you may not be eligible for benefits for your work as an Atlanta public school, or state-funded teacher, there are still other ways you may be eligible for benefits.
For example, you may be eligible for Social Security spousal benefits if you are or were married to someone who is eligible for Social Security benefits in retirement. You may also be eligible for some benefits if you worked as a teacher (or in another role) and paid into Social Security elsewhere.
However, there are two key things to remember about potential benefit eligibility as an Atlanta teacher:
- Even if you’re eligible for some Social Security benefits from past employment, your benefits may be reduced due to the Windfall Elimination Provision if you have access to a state-funded pension. This applies if you are eligible for benefits from personally paying into Social Security through taxes at a previous employer.
- If you’re eligible for spousal benefits through the Social Security Administration, but have access to a government pension as well, your SSA benefits could be reduced through the Government Pension Offset. This only applies to spousal benefits, not benefits you may have previously earned.
These provisions only apply if you are collecting benefits from a non-covered, state-funded pension plan. If your spouse has a non-covered, state-funded pension plan, and you yourself are not an educator, you will still be eligible for your normal retirement benefits, and any spousal benefits from their plan.
How Can Teachers Plan for Retirement Without Social Security?
Your first step to planning for retirement as an Atlanta teacher is to know exactly what you’re entitled to. For example, if you have some Social Security benefits that will be impacted by the Windfall Elimination Provision, or your spousal benefits will be impacted by the Government Pension Offset, it’s important to know what to expect as far as a monthly benefit goes in retirement.
It may not be very much, but it still plays a part in your overall retirement cash flow planning. Next, you can begin to focus on the other two components of your retirement income:
The Teachers Retirement System of Georgia offers a convenient pension calculator to understand your benefits before you begin retirement. It’s likely that your pension will be the largest part of your retirement income – but sometimes distributions from your accumulated savings may surpass the benefit that your pension pays out to you.
The second component of your retirement income will come from your savings through your 403(b) or 401(k). In 2019, contribution limits to a 403(b) or 401(k) are $19,000. However, you may be eligible for additional “catch up” contributions of $6,000 per year if you’re older than age 50. This can be an excellent opportunity to increase retirement savings before taking the leap to retirement.
You can also boost your retirement savings by opening an independent Roth IRA or Traditional IRA. In 2019, contribution limits to a Traditional and Roth IRA are $6,000, or $7,000 if you’re age 50 or older. However, Roth IRAs have unique income restrictions that may alter how much you can contribute, or whether you can contribute at all.
Partnering With an Advisor
If you’re beginning your retirement planning journey, it can help to partner with a financial planner who understands the ins and outs of your unique situation. As a planner who primarily serves women who are divorced or widowed in Atlanta and around the country, I’ve worked with many clients from a wide range of professions. I have experience planning with the unique limitations that a lack of a Social Security benefit brings for Atlanta educators, and make it my goal to empower my clients to fund their retirement in a way that helps them live a fulfilling lifestyle.
Want to learn more? Reach out! I’d love to help you start planning your ideal retirement.