Note to my readers:
About 95 percent of working people in this country pay into Social Security. The other 5 percent are exempt from paying Social Security taxes for a variety of reasons. Among that small group are teachers in a handful of states like California, Texas -- and as we'll learn in this week's column -- Missouri.
And to help you understand what this column is talking about, you should know that a spouse can be due up to one-half of the primary earning spouse's Social Security. For example, if I get $1,000 in a monthly Social Security retirement benefit, my wife is potentially due up to $500 per month as a dependent wife on my record.
Q: I'm a retired teacher from Missouri. As you maybe know, most teachers in Missouri don't pay into Social Security. I get about $5,000 per month from our teacher's retirement system. But my wife worked at a job where she did pay into Social Security. She gets about $1,200 in a monthly Social Security retirement benefit. Am I due any husband's benefits on her record?
A: No. The law treats your teacher's pension as if it were a Social Security retirement pension. And Social Security retirement pensions have always offset spousal benefits. For example, my neighbor, Sam, gets $2,000 per month from Social Security. His wife, Nancy, also gets a Social Security benefit. Her rate is the same as your wife's Social Security -- about $1,200 per month. Sam can't receive a husband's benefit on Nancy's Social Security record because his own Social Security benefit offsets it dollar for dollar. And for that matter, Nancy can't get any benefits as a wife on Sam's record because her $1,200 benefit is more than her potential spousal benefit.
The law, it's called the "government pension offset," actually cuts teachers like you a bit of slack. Instead of a dollar for dollar offset, teachers who receive pensions from jobs that were not covered by Social Security have a three for two offset. In other words, an amount equal to two-thirds of your teacher's pension must be used to offset any husband's benefits you might be due on your wife's Social Security record. Two-thirds of $5,000 is $3,300. And that is way more than the $600 you'd potentially be due from your wife's Social Security account. So that means you are not due husband's benefits from Social Security.