Justin Rush, CFP®

Am I Eligible for STRS and Social Security Benefits?

A question I’m frequently asked is “Am I eligible for both STRS and Social Security benefits?” Many STRS members assume the answer is no, however, that’s not always the case. In short, the correct answer is maybe. And that “maybe” will depend on whether you’re referring to a benefit you’ve earned based on your own work record or a benefit you’re eligible for as a survivor.

Confused yet? I’m here to help.

First, let’s briefly examine what it means to be eligible for Social Security benefits. Social Security benefit eligibility is determined by the number of credits you’ve earned during your working years. A minimum number of credits is required to be eligible for Social Security.

What is a credit? As Social Security puts it, “credits are the building blocks used to find out whether you have the minimum amount of covered work to qualify for each type of Social Security benefit.” Credits are earned by working and paying into the Social Security system. A maximum of four credits may be earned each year and credits are based on the amount of your income subject to Social Security taxes.

Now that we’ve determined whether you’re eligible for Social Security, let’s look at two provisions of Social Security that may impact your benefits: The Windfall Elimination Provision and Government Pension Offset.

Will the Windfall Elimination Provision affect you?

Provided you are eligible for an STRS Ohio pension and Social Security benefits based on your own work record, the Windfall Elimination Provision (WEP) may reduce your Social Security benefits. The Social Security Administration provides an online WEP calculator to determine the potential impact your STRS Ohio pension may have on eligible Social Security benefits.

Two important items to note regarding the WEP are:

1. WEP may reduce your Social Security benefits, but it cannot completely eliminate them.
2. WEP applies to your surviving spouse if you elect a portion of your STRS Ohio benefits to be payable to them upon your death (i.e. you elect a joint and survivor pension).

What about the Government Pension Offset?

The Government Pension Offset (GPO) applies to Social Security benefits you’re eligible for as a spouse or survivor. In such cases, Social Security benefits may be reduced by two-thirds of your STRS Ohio pension, including any partial lump-sum benefits (e.g. PLOP) you may receive. Again, the Social Security Administration provides a calculator to determine the impact the GPO may have on your Social Security benefits.
When approaching retirement, and not knowing whether you or your spouse will survive the other, proper planning must be made to determine how STRS Ohio benefits may impact the survivor’s cash flow needs. This is especially important when couples will have income from both Social Security and STRS.

Take the time to analyze your STRS benefits so you fully understand how they impact all areas of your financial plan, including Social Security.