|
|
Post by cindyupnorth on Jun 17, 2023 18:52:38 GMT
My dd is considering a job as a paralegal with a county attorney. But has some questions we don’t know about. And since it’s the weekend and Monday is a holiday for most govt jobs I thought I would ask here. In the contract is has the PERA specifics, 6.5 employee contribution and 7.5 employer contribution per month. Does she have to commit to this? Can she ask for lower % or opt out for awhile? She would take this job to start out with a lower salary, but the long term benefits would be the reason she would take it.
Any thoughts Ps?
|
|
snyder
Pearl Clutcher
Posts: 4,493 
Location: Colorado
|
Post by snyder on Jun 17, 2023 19:07:09 GMT
I tried looking up PERLA, but couldn't find anything on it, but if it is like what I retired on, PERACO, local government, no, you can not negotiate that percentage. BIL worked for our county, same thing. The percent they put in for you is set in stone. My dad worked civil service and again, the amount is fixed. In general, the wages are smaller for these types of jobs, but the true benefit is when it comes to retire, you don't have to live on just SS. I am very fortunate to have the income I have. However, these retirement programs are trimming back some, so many may not be quite as generous as it was when I retired 11 years ago, but I don't think you can go wrong with an employer that "forces" you to save for your retirement.
ETA, I see you edited your original post and it is PERA, which is what I retired under.
|
|
|
|
Post by cindyupnorth on Jun 17, 2023 19:10:23 GMT
Yep. Sorry. I added the L. So the amt you have to contribute is set in stone?
|
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 17, 2023 19:11:55 GMT
Yep. Sorry. I added the L. So the amt you have to contribute is set in stone? Yes, it is set in stone. That is the amount that has been determined they need to keep the retirement plan going to ensure payment to all employess. |
|
ellen
Drama Llama
Posts: 5,128
|
Post by ellen on Jun 17, 2023 19:45:06 GMT
I have a TRA pension and the amounts that we are required to pay are not negotiable. I would advise her to find out how long it takes to become vested, when you can start collecting, and what are the penalties if you collect before what the plan considers to be normal retirement age. Many Minnesota teachers had a rude awakening in the past few years. A lot of them thought they had Rule of 90 (age plus years of service) for collecting a full pension like so many teachers in the workforce had. Anyone hired after July 1, 1989 cannot collect a full pension until they are 65 and there are some steep penalties if you go earlier. It’s a kick in the teeth compared to Rule of 90.
Your daughter is wise to be inquiring how this all works.
|
|
|
|
Post by chaosisapony on Jun 17, 2023 20:14:01 GMT
I have Calpers, California's public retirement fund and it is not optional. It's really hard for entry level employees because it takes a lot out of their already low paychecks.
|
|
|
|
Post by cindyupnorth on Jun 17, 2023 20:41:54 GMT
I have a TRA pension and the amounts that we are required to pay are not negotiable. I would advise her to find out how long it takes to become vested, when you can start collecting, and what are the penalties if you collect before what the plan considers to be normal retirement age. Many Minnesota teachers had a rude awakening in the past few years. A lot of them thought they had Rule of 90 (age plus years of service) for collecting a full pension like so many teachers in the workforce had. Anyone hired after July 1, 1989 cannot collect a full pension until they are 65 and there are some steep penalties if you go earlier. It’s a kick in the teeth compared to Rule of 90. Your daughter is wise to be inquiring how this all works. She would be vested at 5 yrs |
|
|
|
Post by Sorrel on Jun 17, 2023 22:40:21 GMT
Is she in a state that doesn’t take Social Security out from PERA jobs? If she is, watch out, you can get really screwed on your Social Security due to the Windfall Elimination Provision law. Ask me how I know.
|
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 17, 2023 22:46:15 GMT
Is she in a state that doesn’t take Social Security out from PERA jobs? If she is, watch out, you can get really screwed on your Social Security due to the Windfall Elimination Provision law. Ask me how I know. That's not really being screwed, its called not double dipping.
What I have read about this, not just in the link above, but other sources, it is believed it will not eleminate it completely, but reduce the amount they reduce Social Security by. If it passes, those that are currently affected by it will have their SS readjusted, not just new retirees.
|
|
|
|
Post by Sorrel on Jun 17, 2023 23:44:24 GMT
Is she in a state that doesn’t take Social Security out from PERA jobs? If she is, watch out, you can get really screwed on your Social Security due to the Windfall Elimination Provision law. Ask me how I know. That's not really being screwed, its called not double dipping.
What I have read about this, not just in the link above, but other sources, it is believed it will not eleminate it completely, but reduce the amount they reduce Social Security by. If it passes, those that are currently affected by it will have their SS readjusted, not just new retirees.
It is a blunt instrument that is not calibrated properly and as such is punitive, particularly for people who have split their careers somewhat evenly between public service and private industry. I have paid in plenty to SS over the years but will still have over half my benefit taken away, and won't be getting a large pension either. They need to fix how it is calibrated. They will never pass that bill. There have been plenty over the years and they never go through, because only 15 states are affected and they don't give a shit. |
|
|
|
Post by cindyupnorth on Jun 18, 2023 2:11:54 GMT
Do you mean SS at retirement? Or what do you mean exactly?
|
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 2:24:29 GMT
Do you mean SS at retirement? Or what do you mean exactly? Yes, SS at whatever age one would decide to start drawing it. Earliest is age 62. |
|
|
|
Post by cindyupnorth on Jun 18, 2023 3:13:01 GMT
So you don’t pay SS now? But end up paying it when you retire? I guess I’m not following you
|
|
|
|
Post by 950nancy on Jun 18, 2023 3:18:56 GMT
My husband and I both have PERA and for us, it has been amazing. We've gotten back more (like two or three times more) than we put in already and that was after 32 years of putting in our %. We never paid SS (except for other jobs we held). In our state, PERA replaces SS and is a better way to recoup your money when you retire.
|
|
|
|
Post by elaine on Jun 18, 2023 3:20:58 GMT
So you don’t pay SS now? But end up paying it when you retire? I guess I’m not following you Some state/county governments don’t charge SS taxes (and therefore their employees don’t pay into the system and earn the credits) if they offer they offer pension plans, and then their employees don’t qualify at the same rate/coverage when they retire: www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.html |
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 4:07:52 GMT
So you don’t pay SS now? But end up paying it when you retire? I guess I’m not following you I'll try to give you an example.
You work 4-5 years for a non PERA employer and they take SS out of your check. This amount of time will give you the required 40 quarters to qualify to draw SS.
You quit that job and start working for a PERA employer. They do not take SS out, instead, they take that 6.5% contriution out.
When you retire from your PERA job, you get paid a monthly income which they take out Federal and State taxes, but no SS. I have a medical premium also taken from my check, which PERA contributes an amount based on the number of service years.
When you decide to draw SS, it is reduced by a formula based on your PERA income. Off the top of my head, I do not know the forumula, but could probably find it for you if you need it.
Let's just say that those 5 years you worked for an SS employer, you qualify for $600 a month. Low because you only paid in for 4-5 years.
Apply the windfall caulation and it will reduce the $600 to $450.
So you will draw your monthly PERA and the $450 SS.
When you turn 65, Meicare premiums will be deducted out of your SS check.
SS is taxed based on your other income. If you're low income, then you might not pay any federal tax on your SS, but I believe the number is about over $34,000 and then it is based on a percentage of total income.
|
|
|
|
Post by cindyupnorth on Jun 18, 2023 4:09:18 GMT
We are in MN. So I guess what I’m asking is, if this will make a difference in how much more is taken out of her check besides the PERA.?? She’s only 26. So has a ways to go yet.
|
|
|
|
Post by cindyupnorth on Jun 18, 2023 4:12:51 GMT
She already worked 5 yrs for nonPERLA private companies.
|
|
lizacreates
Pearl Clutcher
Posts: 3,919
|
Post by lizacreates on Jun 18, 2023 4:23:43 GMT
We are in MN. So I guess what I’m asking is, if this will make a difference in how much more is taken out of her check besides the PERA.?? She’s only 26. So has a ways to go yet. For Minnesota PERA member, your daughter would still see a deduction on her paycheck for full FICA tax for Social Security and Medicare. On top of that is the deduction of 6.5% for her PERA contribution. |
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 5:09:18 GMT
We are in MN. So I guess what I’m asking is, if this will make a difference in how much more is taken out of her check besides the PERA.?? She’s only 26. So has a ways to go yet.
I'm not understanding what you mean by "how much more"? Its like you're swaping SS for PERA so it equals about the same deduction.
These are the taxes taken out of a MN paycheck.
Non PERA
Federal - based on total income
State - based on total income
FICA and State Insurance Taxes 7.65%
Social Security 6.20%
Medicare 1.45%
PERA Federal - based on total income
State - based on total income
FICA and State Insurance Taxes 7.65%
PERA 6.50%
Medicare 1.45%
|
|
|
|
Post by hop2 on Jun 18, 2023 12:30:36 GMT
Is she in a state that doesn’t take Social Security out from PERA jobs? If she is, watch out, you can get really screwed on your Social Security due to the Windfall Elimination Provision law. Ask me how I know. That's not really being screwed, its called not double dipping.
What I have read about this, not just in the link above, but other sources, it is believed it will not eleminate it completely, but reduce the amount they reduce Social Security by. If it passes, those that are currently affected by it will have their SS readjusted, not just new retirees.
I’m not understanding why it’s a ‘windfall’ the employee PAYS into both systems. The employees PAYS SS tax and the employee PAYS a %of wages into their pension. How is it double dipping if they are double paying?  It’s not like you could actually live on SS - it’s not even adequate for housing. It’s not like government employees make a market rate salary either - they make less to ‘pay’ for the benefit of the % the employer adds to the pension, so essentially the employee is paying that also. That’s some f’d up thinking that paying into 2 systems ( in more ways than 1 ) is a windfall when neither is adequate to live off Like the F’ing republicans wanting to remove everyone who has a 401k from SS that they PAID into!!! Ok then give me all my SS taxes back WITH interest. Deadbeats Ok, to answer the OP, often a government employee makes less than market salary because they are working for the *benefit* of a retirement pension. That system worked well in the past but you are GAMBLING that the government entity will follow thru on what is promised. In this day & age can you actually trust that? Is it a fair gamble? I’ll tell you it’s much more of a gamble than it used to be. |
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 12:45:27 GMT
That's not really being screwed, its called not double dipping.
What I have read about this, not just in the link above, but other sources, it is believed it will not eleminate it completely, but reduce the amount they reduce Social Security by. If it passes, those that are currently affected by it will have their SS readjusted, not just new retirees.
I’m not understanding why it’s a ‘windfall’ the employee PAYS into both systems. The employees PAYS SS tax and the employee PAYS a %of wages into their pension. How is it double dipping if they are double paying? It’s not like you could actually live on SS - it’s not even adequate for housing. It’s not like government employees make a market rate salary either - they make less to ‘pay’ for the benefit of the % the employer adds to the pension, so essentially the employee is paying that also. That’s some f’d up thinking that paying into 2 systems ( in more ways than 1 ) is a windfall when neither is adequate to live off Like the F’ing republicans wanting to remove everyone who has a 401k from SS that they PAID into!!! Ok then give me all my SS taxes back WITH interest. Deadbeats You pay into a system for 4-5 years to get qualified for a benefit and then quit paying into it, then you should not get a full amount from that system.
Same with PERA, if you pay into it for 5 years to be vested, then quit paying into it, you do not receive a full benefit amount when you start drawing.
If you work 20 years each system, then you receive quite a bit from each system. SS is a bit less because it doesn't pay out as much as a PERA pension, so it looks like you're being dinged, but really your making out like a bandit.
No, SS is not a livable income, that is why people need to save on the side. The PERA system is a livable income. Again, a reason you get less on the SS side is because its payout is a lot less than PERA type pensions.
Thing is, PERA reduction is 6.5% and SS is 6.2%. So where does all that other money go? If 6.5% can pay a living wage, why can't 6.2%. SS is screwed up. The American people have been screwed by the govenment mismananging that fund for years and years.
|
|
|
|
Post by allison1954 on Jun 18, 2023 16:01:37 GMT
So you don’t pay SS now? But end up paying it when you retire? I guess I’m not following you I'll try to give you an example.
You work 4-5 years for a non PERA employer and they take SS out of your check. This amount of time will give you the required 40 quarters to qualify to draw SS.
You quit that job and start working for a PERA employer. They do not take SS out, instead, they take that 6.5% contriution out.
When you retire from your PERA job, you get paid a monthly income which they take out Federal and State taxes, but no SS. I have a medical premium also taken from my check, which PERA contributes an amount based on the number of service years.
When you decide to draw SS, it is reduced by a formula based on your PERA income. Off the top of my head, I do not know the forumula, but could probably find it for you if you need it.
Let's just say that those 5 years you worked for an SS employer, you qualify for $600 a month. Low because you only paid in for 4-5 years.
Apply the windfall caulation and it will reduce the $600 to $450.
So you will draw your monthly PERA and the $450 SS.
When you turn 65, Meicare premiums will be deducted out of your SS check.
SS is taxed based on your other income. If you're low income, then you might not pay any federal tax on your SS, but I believe the number is about over $34,000 and then it is based on a percentage of total income.
How does working 4-5 years give you the required 40 quarters needed? |
|
|
|
Post by hop2 on Jun 18, 2023 16:10:00 GMT
I’m not understanding why it’s a ‘windfall’ the employee PAYS into both systems. The employees PAYS SS tax and the employee PAYS a %of wages into their pension. How is it double dipping if they are double paying? It’s not like you could actually live on SS - it’s not even adequate for housing. It’s not like government employees make a market rate salary either - they make less to ‘pay’ for the benefit of the % the employer adds to the pension, so essentially the employee is paying that also. That’s some f’d up thinking that paying into 2 systems ( in more ways than 1 ) is a windfall when neither is adequate to live off Like the F’ing republicans wanting to remove everyone who has a 401k from SS that they PAID into!!! Ok then give me all my SS taxes back WITH interest. Deadbeats You pay into a system for 4-5 years to get qualified for a benefit and then quit paying into it, then you should not get a full amount from that system.
Same with PERA, if you pay into it for 5 years to be vested, then quit paying into it, you do not receive a full benefit amount when you start drawing.
If you work 20 years each system, then you receive quite a bit from each system. SS is a bit less because it doesn't pay out as much as a PERA pension, so it looks like you're being dinged, but really your making out like a bandit.
No, SS is not a livable income, that is why people need to save on the side. The PERA system is a livable income. Again, a reason you get less on the SS side is because its payout is a lot less than PERA type pensions.
Thing is, PERA reduction is 6.5% and SS is 6.2%. So where does all that other money go? If 6.5% can pay a living wage, why can't 6.2%. SS is screwed up. The American people have been screwed by the govenment mismananging that fund for years and years.
But you don’t get full benefit at 5 years. I have a relative who is a govt employee in NY & one in NJ and one in VA. In NY & NJ they need 30 years to get full benefits. Where does 5 years get you full benefits? Never heard of that. For persons up to 5 years you get what you put in back after 5 years you get a % of a full benefit. Where can you be fully vested for 100% benefit at 5 years? That’s a much smaller gamble than trusting that a ‘pension’ will be there in 20 (%80 ) or 30 (%100 ) years. |
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 16:29:39 GMT
You pay into a system for 4-5 years to get qualified for a benefit and then quit paying into it, then you should not get a full amount from that system.
Same with PERA, if you pay into it for 5 years to be vested, then quit paying into it, you do not receive a full benefit amount when you start drawing.
If you work 20 years each system, then you receive quite a bit from each system. SS is a bit less because it doesn't pay out as much as a PERA pension, so it looks like you're being dinged, but really your making out like a bandit.
No, SS is not a livable income, that is why people need to save on the side. The PERA system is a livable income. Again, a reason you get less on the SS side is because its payout is a lot less than PERA type pensions.
Thing is, PERA reduction is 6.5% and SS is 6.2%. So where does all that other money go? If 6.5% can pay a living wage, why can't 6.2%. SS is screwed up. The American people have been screwed by the govenment mismananging that fund for years and years.
I have a relative who is a govt employee in NY & one in NJ and one in VA. In NY & NJ they need 30 years to get full benefits. Where does 5 years get you full benefits? Never heard of that. For persons up to 5 years you get what you put in back after 5 years you get a % of a full benefit. Where can you be fully vested for 100% benefit at 5 years? That’s a much smaller gamble than trusting that a ‘pension’ will be there in 20 (%80 ) or 30 (%100 ) years. I never said you you are fully vested for 100% benefit at 5 years.
Everything in life is a gamble. Nothing is guaranteed, but I would much rather have worked for a PERA job than not. I live quite comfortable on my pension. I'm all for them.
|
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 16:32:26 GMT
I'll try to give you an example.
You work 4-5 years for a non PERA employer and they take SS out of your check. This amount of time will give you the required 40 quarters to qualify to draw SS.
You quit that job and start working for a PERA employer. They do not take SS out, instead, they take that 6.5% contriution out.
When you retire from your PERA job, you get paid a monthly income which they take out Federal and State taxes, but no SS. I have a medical premium also taken from my check, which PERA contributes an amount based on the number of service years.
When you decide to draw SS, it is reduced by a formula based on your PERA income. Off the top of my head, I do not know the forumula, but could probably find it for you if you need it.
Let's just say that those 5 years you worked for an SS employer, you qualify for $600 a month. Low because you only paid in for 4-5 years.
Apply the windfall caulation and it will reduce the $600 to $450.
So you will draw your monthly PERA and the $450 SS.
When you turn 65, Meicare premiums will be deducted out of your SS check.
SS is taxed based on your other income. If you're low income, then you might not pay any federal tax on your SS, but I believe the number is about over $34,000 and then it is based on a percentage of total income.
How does working 4-5 years give you the required 40 quarters needed? Opps, my bad! I was pulling that out of thin air as an example and I should have looked it up before posting. It is 10 years or 4 points per year. |
|
|
|
Post by moretimeplease on Jun 18, 2023 19:02:28 GMT
I have a MN county job with PERA. We pay into PERA (and yes, it’s mandatory), but we also pay full Social Security Taxes, so we are not subject to the windfall. PERA is very good though. If I wait until full retirement age, I would have 28 years with the PERA job, and 48+ years paying into SS. Despite paying many more years for SS, my PERA payment would be equal to or greater than my SS payment.
|
|
snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
|
Post by snyder on Jun 18, 2023 19:21:41 GMT
I have a MN county job with PERA. We pay into PERA (and yes, it’s mandatory), but we also pay full Social Security Taxes, so we are not subject to the windfall. PERA is very good though. If I wait until full retirement age, I would have 28 years with the PERA job, and 48+ years paying into SS. Despite paying many more years for SS, my PERA payment would be equal to or greater than my SS payment. Oh wow! That sounds good and bad. lol You should retire with a very decent income drawing both. But your regular checks would be pretty small with both deductions. That would be 6.4% and 6.2% taken out for both PERA and SS for a total of 12.6% and that doesn't include other taxes such as Federal and State and insurance premiums.
|
|
|
|
Post by cindyupnorth on Jun 19, 2023 0:14:45 GMT
Yes! To have SS and PERLA deducted would not be good!! I wonder why they would do that?
What MN county are you in?
|
|
|
|
Post by SweetieBugs on Jun 19, 2023 0:36:49 GMT
I am collecting survivor spouse CalPers pension benefits since my DH's death (happened while he was still working).
I'm wondering if I will have my SS benefits reduced when I apply. I'm pretty sure my DH had SS deducted while he was working so that does seem detrimental. When he died, I think his CalPers contribution rate was 8%.
I've worked 30+ years and have paid in SS the entire time (never had a government job) and would take my SS, not DH's. I really need to find out about this. Anyone know? Thanks.
|
|
It’s not like you could actually live on SS - it’s not even adequate for housing. It’s not like government employees make a market rate salary either - they make less to ‘pay’ for the benefit of the % the employer adds to the pension, so essentially the employee is paying that also.
