k-12 Tax & $pending Climate: two otherwise identical employees can be treated dramatically different by Social Security
Let’s start with Teacher 1, who pays into Social Security in her teaching job. Assuming she retired in 2025 at the full retirement age of 67, her $72,000 annual teaching salary would entitle her to an annual Social Security benefit of $25,064. The additional $10,000 in annual earnings she received from summer jobs would boost her annual Social Security benefits by an additional $1,500.
Now consider Teacher 2. She pays into a government pension for her teaching job. Usually these public sector plans are more generous than Social Security, but for these purposes let’s assume the benefits are the same. Her $10,000 in summer earnings each year, however, entitle her to an annual Social Security benefit of $7,305. That’s $5,805 more than the $1,500 annual benefit that Teacher 1 receives based on her summer earnings. How can that be right?
It’s not right, in any fairness sense. It’s also not right when we consider need, since we assumed the two teachers had the same annual earnings and received the same government pension or Social Security benefits based on their teaching job. Yet Teacher 2, who mostly paid into a government pension in her teaching job, receives a total retirement income that’s $5,805 higher than Teacher 1. And that difference arises solely from how the two teachers are treated by Social Security.
