You cannot opt out of Social Security, and if you work for the government you almost certainly cannot opt out of your public pension either. The one place you usually can say no is a workplace 401(k) or 403(b), even if your employer enrolled you automatically. So the honest answer to whether you have to pay into a pension depends on which plan is pulling money out of your paycheck.
Social Security and Medicare Are Not Optional
Every paycheck in the United States is subject to the Federal Insurance Contributions Act. Your employer withholds 6.2% of your wages for Social Security and 1.45% for Medicare, and pays an identical amount on your behalf.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax There is no form to fill out to stop it. The 6.2% Social Security portion applies only to the first $184,500 you earn in 2026; wages above that line escape Social Security tax but still owe Medicare.2Social Security Administration. Contribution and Benefit Base An extra 0.9% Medicare surtax kicks in above $200,000 for single filers and $250,000 for joint filers.
Self-employment does not get you out of it. If you work for yourself, you pay both halves, for a combined 15.3% (12.4% Social Security plus 2.9% Medicare). You can deduct the employer-equivalent half when calculating adjusted gross income, which softens the blow at tax time.3Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Public Sector Pensions Are Also Mandatory
Government employees generally contribute to a pension system whether they want to or not. Federal civilian workers under the Federal Employee Retirement System pay in at rates set by their hire date:
- Hired before 2013: 0.8% of salary
- Hired in 2013: 3.1% of salary
- Hired in 2014 or later: 4.4% of salary
Those deductions come out every pay period alongside FICA.4U.S. Department of Commerce. Federal Employee Retirement System (FERS) State and local government workers typically contribute somewhere between 5% and 12% of their salary to their state retirement system, with wide variation by jurisdiction. Some public employees do not pay into Social Security at all, their pension contribution standing in its place.
Why You May Be Enrolled in a 401(k) You Never Signed Up For
If you were hired recently and noticed a retirement deduction on your pay stub you don’t remember authorizing, the SECURE 2.0 Act is probably the reason. Starting January 1, 2025, most newly established 401(k) and 403(b) plans must automatically enroll eligible employees. If your employer launched its plan after December 29, 2022, you are likely in by default. The starting contribution rate falls between 3% and 10% of pay, and the plan has to escalate your rate by 1% each year until it reaches at least 10% and no more than 15%.
The mandate carves out a few employers:
- Businesses with fewer than 10 employees
- Businesses that have existed for less than three years
- Church plans and governmental plans
- Plans established on or before December 29, 2022, which are grandfathered
Plenty of grandfathered employers use auto-enrollment anyway. Plans with a qualified automatic contribution arrangement typically start workers at 3% and climb to 6%, capped at 10%.5Internal Revenue Service. Retirement Topics – Automatic Enrollment The design assumes you want to be in; the burden is on you to opt out.
How to Stop 401(k) or 403(b) Contributions
You can get out, but the window for getting your money back is tight. Plans with an Eligible Automatic Contribution Arrangement give you between 30 and 90 days from the date of your first automatic contribution to request a full withdrawal of what has been deducted so far.6Internal Revenue Service. Can an Employee Withdraw Any Automatic Enrollment Contributions From the Retirement Plan If you act inside that window, your pre-tax contributions come back to you as taxable income for the year, and the 10% early withdrawal penalty that normally applies before age 59½ does not kick in.7Internal Revenue Service. 401(k) Plan Fix-It Guide – 401(k) Plan – Overview
Mechanically, you change your deferral election to 0% through the plan administrator, usually via the plan’s website or by contacting the recordkeeper directly. HR can point you to the right place, but the election itself goes through the plan, not through your manager. Deductions should stop by the second pay period or within 30 days, whichever comes first.6Internal Revenue Service. Can an Employee Withdraw Any Automatic Enrollment Contributions From the Retirement Plan
Miss the withdrawal window and you can still turn off future contributions at any time by setting your deferral to 0%. The money already in the account stays there until you reach 59½, leave the employer, or qualify for one of the limited exceptions in the tax code.8Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
What Opting Out Actually Costs
The paperwork is easy. The math is the problem. The first thing you give up is the employer match. Most employers that match contribute 4% to 6% of salary, often structured as 50 cents per dollar you defer up to 6% of pay. Contribute zero, get zero. And if you use the opt-out window to pull your auto-enrollment contributions back out, any matching contributions tied to those deferrals are forfeited.6Internal Revenue Service. Can an Employee Withdraw Any Automatic Enrollment Contributions From the Retirement Plan
Compounding is where the real cost hides. A worker earning $60,000 who contributes 5% with a 4% employer match sets aside $5,400 a year. Over 30 years at a 7% average annual return, that becomes roughly $510,000, and the employer match alone accounts for more than $200,000 of the final balance. Opting out means walking away from both pieces.
You also lose the current-year tax break. Traditional 401(k) contributions reduce your taxable income today. For someone in the 22% bracket, a $5,000 contribution costs about $3,900 out of pocket because the tax savings cover the rest. Opting out puts that income back on the tax return at full rate.
There are reasonable short-term reasons to pause, like killing off high-interest debt or steadying things through an emergency. The trouble is when a pause turns into a permanent setting because the extra take-home feels useful. If your employer offers a match, contributing at least enough to capture the full match is almost always the right call, even on a tight budget.