New Law Overhauls Social Security: Are You Getting More Money?

A monumental change to Social Security benefits is on the horizon, thanks to the newly signed Social Security Fairness Act. This long-awaited reform, signed into law on January 5, 2025, by President Joe Biden, addresses unfair reductions in payments for nearly three million public sector retirees, including teachers, firefighters, and police officers.

What’s Changing?

The new law eliminates two controversial provisions that have affected public workers for decades:

• Windfall Elimination Provision (WEP): Previously, the WEP reduced Social Security payments for people who also received a pension from a job where they didn’t pay Social Security taxes. Many retirees saw their benefits slashed significantly because of this.
• Government Pension Offset (GPO): The GPO reduced spousal or survivor benefits for those who received a pension from a government job. This policy often left surviving spouses with drastically reduced benefits, creating financial hardships.

What Does This Mean for You?

Here’s how the repeal of these provisions will impact retirees:

• Higher Payments for Millions: If you’ve been affected by the WEP, you could see an average monthly increase of $360. Those impacted by the GPO might get an extra $700 to $1,190 monthly, depending on their situation.
• Retroactive Benefits: The changes are retroactive to January 2024, meaning you’ll receive a lump sum for payments owed from last year. The Social Security Administration (SSA) is working to calculate and distribute these payments.

What’s Next?

The SSA is updating its systems to reflect the new law. Beneficiaries are encouraged to ensure their contact and banking information is current to avoid delays in receiving the updated payments. You can check your details through the SSA’s online portal or by contacting their office directly.

Financial Impacts

While the law corrects longstanding inequities, it comes with financial consequences. The Congressional Budget Office estimates the changes will cost around $196 billion over the next decade. This expenditure may accelerate the depletion of the Social Security Trust Fund, initially projected to last until 2035. Policymakers may need to explore further reforms to keep Social Security solvent for future generations.

What Can You Do Now?

Stay informed by following updates from the SSA and consulting with a financial advisor. These changes could significantly impact your retirement plans, so it’s essential to understand how they apply to you.

This historic reform brings long-awaited relief to millions of retirees, ensuring that public servants receive the benefits they’ve earned.