In Summary of the event. I currently pay into a state pension system in Illinois. The pension amount is deducted from each pay check which is not a problem. I recently found out that if contributing to a state pension system, I am not required to pay into Social Security.
Is this correct?
I have been paying both Social security and State pension from each paycheck. If I wanted to stop contributing to the social security, will I be able to get refunded the amount already paid into social security from previous paychecks?
Pension system and social security
byu/Life-Championship867 inpersonalfinance
Posted by Life-Championship867
6 Comments
> recently found out that if contributing to a state pension system, I am not required to pay into Social Security.
Depends on the pension. Sometimes true. Sometimes not.
> If I wanted to stop contributing to the social security,
You don’t have a choice. If your pension replaced social security, your employer wouldn’t withhold for social security
If your employer withholds for social security, your pension doesn’t replace social security
it varies by state. in some states you only pay into the pension; in others you pay into pension and social security
illinois has one the worst rated state pension based on funding; so bailing on social security might not be the best idea
no – opting out of future social security payments does not get you a refund
I have had government jobs where I paid into a pension plan and not social security, and jobs where there was no government pension plan and I did pay into social security. Never both at the same time.
I doubt you could ever get a refund from social security, but why would you want to ? When you retire, you should then have income from both the pension plan AND from social security, provided you have qualified for both, as I did.
Check with your HR dept on this. A W4 does not impact SS so the withholding is out of your control. Your ER also pays SS on your behalf so if your pension opts you out of SS, they’d want to do it as well.
Depends on your employer, usually the employee cannot unilaterally decide to stop paying into SS.
For instance, in California public school teachers are covered by CalSTRS (pension) and do not pay into SS. I work for my local county government and, while covered by CalPERS, still pay into SS.
If you’re paying into SS now, you’ll eventually get both the state pension and SS.
You almost certainly want to get both.
In my state we pay into and get both, in the next state over they don’t pay into ss and they are jealous we do both in my state.