President Biden signed the “Social Security Fairness Act of 2023” into law on January 5, 2025, allowing for increased Social Security benefits for public workers who also receive pensions.
This new act repeals two existing provisions, the Windfall Elimination Provision and the Government Pension Offset. The Windfall Elimination Provision is a formula that adjusts Social Security benefits for people receiving pensions that are “paid by an employer that does not withhold Social Security taxes from your salary, typically, state and local governments or non-U.S. employers,” also called “non-covered pensions.” The Government Pension Offset impacts spousal and widow/widower benefits for people receiving non-covered pensions. Around 2.7 million Americans will be impacted by the repeal of these two provisions.
The legislation will go into effect retroactively, impacting any Social Security benefits payable since December 2023. Affected retirees can expect to receive a lump sum payment for benefits accrued between 2023 and the present, and an average increase of $365 in social security benefits going forward. The Social Security Administration (SSA) is currently evaluating how they will implement the act. For next steps, the SSA recommends verifying that your mailing address and direct deposit information are up to date by going online to ssa.gov, calling the SSA, or visiting your local SSA office in person.
Social Security is a critical part of retirement income planning. If you have any questions about your retirement plan or would like to speak to a financial advisor, please schedule time with our team or contact your current financial advisor.
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