Retirement savings are often described as a three-legged stool: Social Security, employer retirement plans, and personal savings. For many American workers, Social Security is the most consistent portion of the three-legged model, providing a solid plank of retirement savings.
But nationwide, more than 1 million teachers — about 40 percent of all public K–12 teachers — are not covered by Social Security. In Uncovered: Social Security, Retirement Uncertainty, and 1 Million Teachers, Leslie Kan and Chad Aldeman analyze the consequences of this policy choice. Teachers without Social Security coverage face substantial uncertainty and must rely more heavily on their employer retirement plans (state pensions) and personal savings.
Unfortunately, state pension plans leave too many teachers unprotected. According to an analysis of state pension plans’ own assumptions, half of today’s new teachers will not stay in a single pension system long enough to qualify for a pension when they retire. Even for teachers who do qualify, the existing structures offer minimal benefits even to those who stay for 10, 15, or even 20-plus years. The subsequent reality: many teachers not covered by Social Security are left with inadequate retirement savings from their time in the classroom.
At a time when an increasing number of states struggle with teacher recruitment and policymakers are concerned about retirement security more generally, states should look for ways to provide all teachers with secure retirement benefits. Social Security is not sufficient as a stand-alone retirement program. The authors offer case studies from three hypothetical teachers of varying experience levels to show that all teachers, however, would benefit from Social Security coverage as one component of a comprehensive retirement plan.