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Massachusetts Public Employees & Social Security Eligibility

Tim Hayes AIF®, CRPS®, AWMA®, CFS®, APMA®, CAS®

Public employees in Massachusetts do not contribute to the Social Security system, but many of them contribute through other jobs. Some also have spouses who take part in the Social Security system. Both scenarios are affected by two federal laws.

403b Retirement Catch-Up Options for Public School Employees

  • The Windfall Elimination provision can reduce any Social Security benefits that a public employee earns by as much as 55%. For example, a retired teacher who receives a pension from MTRS and also qualifies for a monthly Social Security benefit of $1,000 might only receive $450 a month.
  • The Government Pension Offset provision affects the Social Security benefits of a spouse, widow, or widower. For example, if a married teacher receives a monthly pension from MTRS of $6,000, two-thirds of that amount ($4,000) will be credited against any benefit from their spouse’s Social Security.
    • Thus, if the spouse dies and the retired teacher is eligible for a $2,000 survivor benefit from Social Security, that teacher would receive none of it because the $4,000 would eat into all of it.
    • Very few married people who retire with a pension from Massachusetts Teachers’ Retirement System (MTRS) will receive anything from their spouse’s Social Security.

Social Security When Should You Start Taking It?

Are There Any Workarounds?

There is a workaround for the Windfall Elimination Provision. Any public employee in Massachusetts with 30 or more years of ‘substantial earnings’ in a job where they paid into Social Security will receive their full benefits. In fact, after 25 years of such substantial earnings, any reduction in Social Security benefits begins to shrink.

These are the opinions of Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only, and should not be construed or acted upon as individualized investment advice. 

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