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The Social Security Fairness Act legislation was signed into law on January 6, 2025. The law repeals the Windfall Elimination Provision, and the Government Pension offset. These provisions reduced or eliminated Social Security benefits for almost 3 million teachers, police officers, firefighters and other government workers who receive pensions.
What to Know About the Social Security Fairness Act
The Windfall Elimination Provision reduced the Social Security benefit of workers who had a ‘non-covered’ pension (Social Security taxes are not withheld) and qualified for a Social Security benefit from previous employment. The provision reduced the Social Security benefit up to half of their pension amount.
The Government Pension Offset reduced Social Security benefits for spouses and widows who had a ‘non-covered’ pension (Social Security taxes are not withheld) and qualified for Social Security benefit via their spouse. The offset reduced your Social Security benefit by 2/3rds of your pension and could fully offset your Social Security benefit.
The Social Security Fairness Act is retroactive to January of 2024 meaning that beneficiaries will already be eligible for a full year of benefits. It will take the Social Security Administration several months to implement the new legislation so it will take some time for beneficiaries to receive benefits.
Social Security plays a pivotal role in retirement planning by providing a guaranteed source of income for individuals in their golden years. Understanding how Social Security benefits factor into your overall financial strategy is essential for a secure retirement. By considering factors such as the full retirement age, benefit payment options, and survivor benefits, one can maximize their Social Security payments. It serves as a foundation upon which other retirement savings can complement, ensuring a more stable financial future. By incorporating Social Security benefits into your retirement plan, you can better align your financial goals with the reality of your retirement income.
If you have any questions regarding your Social Security benefits, please schedule a meeting with your Goldstone Financial Advisor.
