Hi, I worked as an educator for 10 years in AZ and worked other jobs for 10 years in AZ. I moved to IL and found out that teachers here don't have social security withdrawn from their checks. I was told the IL TRS acts like social security and a state pension. I know in AZ after you reach so many points you can retire and collect AZ state retirement then when you get to the age for social security, you receive that. I kept my AZ state retirement because it accrues interests and collects points still. I don't want to loose the money I put into social security. Will I be loosing my social security since I now live in a state that doesn't withdraw it from my checks? I'm thinking of setting up an IRA account and putting money in it, about the amount that got withdrawn from my AZ checks, to make up that money not going into a social security fund.

Hi,

If you receive a pension based on your earnings that were exempt from Social Security taxes, your Social Security benefit rate will likely be lower than it otherwise would be. That's due to the Windfall Elimination Provision (WEP), which can result in the use of a less generous benefit computation formula when calculating a person's Social Security retirement benefit rate (https://www.ssa.gov/pubs/EN-05-10045.pdf). Although WEP can cause a person's benefit rate to be lowered, it never reduces their rate to zero as long as they have enough Social Security work credits to be insured for benefits.

Another consideration is that your Social Security retirement benefit rate will be based on an average of your highest 35 years of wage-indexed earnings on which you paid Social Security taxes. And, if you have less than 35 years of Social Security covered earnings, some zero earnings years will be averaged in. That would, of course, drag down your average earnings and your resulting benefit rate.

You may want to consider using our software (https://maximizemysocialsecurity.com/purchase) to help you with your retirement planning. The software is fully programmed to handle benefit computations when WEP is involved, so it should be able to help you determine the best strategy for claiming your benefits.

Best, Jerry