Will Working In Non-Covered Employment Reduce My Social Security Benefit?

Aug 27 2016 - 12:30pm

Paid SS for 40 years. Working now for a school system that does not hold SS BUT REQUIRES 8% pay into teachers retirement that I will never be eligible to receive benefit. Does this reduce my SS retirement benefit when I retire? Do you pay SS voluntarily to not have zero average. Thanks for response

Hi,

As long as you don't receive a pension, or lump sum in lieu of a pension, based on your non-covered work, it won't cause any reduction in your Social Security benefit amount.

There is no way to pay voluntary Social Security taxes, but if you've paid into SS for 40 years, no zero earnings years will be used in the calculation of your benefit amount anyway. Social Security retirement benefits are calculated based on the best 35 years of inflation adjusted covered earnings. Obviously, your non-covered earnings will not be used in the calculation, and thus will have no effect on your benefit amount.

Best, Jerry