How Does the Social Security Fairness Act Impact Me?
How Does the Social Security Fairness Act Impact Me?
Written by: Samantha Masey, CFP®
The Social Security Fairness Act was signed into law on January 5, 2025, as an effort to increase social security benefits for certain types of workers that were affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). According to the Social Security Administration, “These provisions reduced or eliminated the Social Security benefits of over 2.8 million people who receive a pension based on work that was not covered by Social Security (a “non-covered pension”) because they did not pay Social Security taxes.”
These workers include:
- Teachers, firefighters, and police officers in many states
- Federal employees covered by the Civil Service Retirement System
- Individuals whose work had been covered by a foreign social security system
The benefit increase amount varies based on variables such as pension amount and type of social security benefit received. Some may receive an increase of over $1,000 per month.
To determine if this affected you, individuals can follow these steps:
- Review your employment history
- Log in to SSA.gov to review your benefit estimate or contact the Social Security Administration
- Consult your financial advisor
If you are eligible and already collecting social security, the monthly benefit automatically increased as of February 24, 2025. In addition, you would have received a one-time payment for retroactive benefits beginning January 2024.
If you have never applied for social security benefits due to WEP and GPO, simply apply at ssa.gov or schedule an appointment.
Does it impact all workers?
Although the Social Security Fairness Act will help many workers, the majority of state and local employees work in social security covered employment and pay social security taxes which in turn means they are already eligible for social security benefits. These individuals would not be affected.
The illustration below reviews the impact of WEP and GPO before they were repealed by the Social Security Fairness Act on January 5, 2025. In summary, if an individual worked for a non-covered employer (jobs that do not pay into social security) it would reduce their own social security benefit and spousal/survivor benefit they qualified for. These are the individuals that are impacted.
In conclusion, the Social Security Fairness Act provides meaningful change for individuals who are eligible. Moving forward, their social security benefits will no longer be reduced due to a government (non-covered) pension and if they qualify for spousal or survivor benefits, they will be paid in full.
If you would like to discuss whether this affects you with a financial advisor, please contact us at 518-720-3333.
Bouchey Financial Group has offices in Saratoga Springs and Historic Downtown Troy, NY as well as Boston, MA and Jupiter, FL.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bouchey Financial Group, Ltd. [“Bouchey Financial”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Bouchey Financial. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Neither Bouchey Financial’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Bouchey Financial is engaged, or continues to be engaged, to provide investment advisory services. Bouchey Financial is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Bouchey Financial’s current written disclosure Brochure and Form CRS discussing our advisory services and fees is available for review upon request or at www.bouchey.com. Please Note: Bouchey Financial does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Bouchey Financial’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Bouchey Financial client, please contact Bouchey Financial, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.