Social Security: A Comparison

October 16, 2017

Spending a career as a teacher or State employee is a career spent contributing to Colorado PERA, rather than Social Security. So how do the two systems compare? We looked at five different categories:

2017 Contributions*

PERA: Active members contribute 8 percent of pay (10 percent for State Troopers) and employers contribute an additional 13.70–22.85 percent, depending on the division of membership.** 

Social Security: Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $127,200.

Early Retirement Age

PERA: Age 50 with 25 years of service for a reduced benefit.

Social Security: Age 62 with 40 credits (10 years) for a reduced benefit.

Full Retirement Age

PERA: Any age with 35 years of service for members hired after January 1, 2017. 

Social Security: Forty credits and age 67 (for anyone born in 1960 or later). 

2017 Maximum Benefit Payable

PERA: 100 percent of the member’s Highest Average Salary or limited by federal law to about $17,916 per month.

Social Security: Dependent on the age a worker retires. For example, for retirements in 2017, the maximum is $2,687 per month for an employee who retires at age 62 and $3,538 for an employee who retires at age 70.

2017 Annual Increase

PERA: 2 percent for most retirees and 1 percent for retirees who began PERA membership on and after January 1, 2007. The second group’s annual increase is based on the average of the monthly amounts for the prior calendar year of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) published by the United States Department of Labor. In 2016, the average of the monthly CPI-W was just under 1 percent.

Social Security: 0.3 percent. For all recipients, the annual cost-of-living increase was tied to the increase in the CPI-W from the third quarter of 2014 through the third quarter of 2016.

What’s the Future?

Social Security has taken steps in recent years to address the reality of people living longer. Similarly, with 2010’s Senate Bill 1, PERA began to address how the plan is affected by having to pay benefits for a longer period of time. PERA is continuing that work today.

* PERA participants and those who contribute to Social Security also pay a separate Medicare tax.

** Actual employer contributions into the DPS Division vary based upon DPS payments toward its pension obligation bonds.

Your PERA benefit will never be reduced because you also receive a Social Security benefit.


An independent study released in 2015 found that when costs are held constant, PERA delivers the highest percentage of salary replacement income in retirement—for short-term as well as career public employees in Colorado. Additionally, the cost to fund PERA benefits is lower than the cost of other plans in the public and private sector, including Social Security. Read more on the study.