I have approximately 33 years of full time work experience with continuous contribution into Social Security. I just took a job with a college that does not pay into social security and they are forcing me to set aside 7.5% of my pay to their 401(a) plan. They do not contribute to the plan at all. If I continue to work for them, am I a shooting myself in the foot and going to get a reduction in my social security benefit when I retire? Is WEP and GPO going to kick in?
Follow up question regarding 401(a) effect on social security: Is there anyway I can pay both my share of Social Security and the Employers share of Social security so I don't lose Social Security credit ? Since 401(a) is more like a 401(k) why should I suffer no credit with Social Security if I am willing to pay make up the difference?
Hi. First of all, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) provision could only affect your eventual Social Security benefits if you end up collecting a pension, or a lump sum payment in lieu of a pension, based on your non-Social Security covered earnings (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364). Secondly, GPO only applies to auxiliary (e.g. spousal) and survivor benefits, so GPO isn't a concern with regard to your own Social Security retirement benefits (https://www.ssa.gov/pubs/EN-05-10007.pdf).
As for WEP, you will be exempt from any WEP reduction in your Social Security retirement benefit if you have at least 30 years of Social Security covered earnings that are classified as 'substantial earnings'. The annual amounts of earnings that are considered 'substantial' are listed on page 2 of the following Social Security publication: https://www.ssa.gov/pubs/EN-05-10045.pdf.
With regard to your follow up question, the answer in no. No one is allowed to voluntarily pay Social Security taxes for any reason.
Our software (https://maximizemysocialsecurity.com/purchase) can handle benefit computations involving both WEP or GPO, so you may want to strongly consider using the software to analyze all of your options so that you can determine your best strategy for maximizing your benefits.