A very important piece of legislation was enacted on January 5th of this year, which affects more than 3 million current Social Security recipients and many more future retirees. The Social Security Fairness Act repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), restoring full Social Security benefits to many teachers, firefighters, and police officers, federal employees covered by the Civil Service Retirement System, and people covered by a foreign social security system.
A Quick Breakdown: WEP and GPO
Windfall Elimination Provision (WEP)
If you receive a pension from a non-Social Security-covered job, and you also qualify for Social Security benefits from other employment, WEP could have reduced your Social Security retirement or disability benefits. For 2024, the maximum reduction was $587 per month or one-half of public pension, whichever is less.
Government Pension Offset (GPO)
GPO applied to spousal or survivor Social Security benefits when the spouse or survivor received a pension from a non-Social Security-covered job. GPO reduces any spousal or survivor benefits by two-thirds of his or her pension amount with no maximum. Therefore, it was possible for the GPO to completely eliminate spousal and survivor benefits.
When Will Those Affected See Full Benefits?
Eligible retirees started to see retroactive payments and increased monthly benefits on February 25th. And most affected retirees will see their payments by April 2025. Retroactive payments cover amounts back to January 2024. Further, anyone who gets a benefit adjustment or a retroactive payment will receive mailed notices explaining the benefit change.
Why This Matters to You (Or Someone You Know)
- Some people might not have filed for social security at all because of WEP and GPO. They should file right away.
- When a retiree filed, they might have been entitled to a spousal or survivor benefit, but only filed for their own retirement benefit since GPO eliminated the spousal or survivor benefit entirely. In many cases, the spousal or survivor benefit would be the larger benefit now that GPO is repealed.
- Some non-retirees might be working longer to meet expenses, and full retirement benefits could change their retirement planning.
- Up to 85% of social security benefits could be taxed, so increased benefits might affect your tax planning.
You may not be impacted by WEP or GPO yourself, but it is likely that you know someone who is.
- Did your sister retire from teaching?
- Was your friend a firefighter or police officer?
- Do you have family or friends who worked for a state or local government agency with a pension?
We’re Here to Help—And Your Friends Are Welcome, Too
If you have questions about your Social Security benefits—or know someone trying to make sense of theirs—we’d love to be a resource.
You can also check out The Social Security Administration’s page on the Social Security Act for helpful information about timing, what you might need to do, and when.
https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. It is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Purposeful Wealth Advisors and not necessarily those of Raymond James.
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