In a historic decision, President Joe Biden signed the Social Security Fairness Act into law on January 5, 2025. This groundbreaking legislation eliminates two controversial provisions the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) marking a significant shift for millions of retirees.
What Were WEP and GPO?
For decades, the WEP and GPO have reduced Social Security benefits for many public-sector workers.
- The WEP lowered benefits for retirees who worked in jobs not covered by Social Security, like state or local government positions, even if they earned benefits through other jobs.
- The GPO slashed spousal or survivor benefits for individuals receiving pensions from non-Social Security-covered employment.
These provisions disproportionately affected teachers, firefighters, and police officers, leaving many with lower-than-expected retirement incomes.
How Does the New Law Help?
The repeal of WEP and GPO brings immediate relief to an estimated 2.65 million Americans. Here’s what you can expect:
- Higher Payments: Retirees impacted by WEP will see their Social Security checks increase by an average of $360 per month.
- Spousal and Survivor Benefits Boosted: Those affected by GPO could receive an extra $700 to $1,190 monthly, depending on their circumstances.
Additionally, payments will be retroactive to January 2024, meaning affected beneficiaries will get back pay for the months they were shortchanged.
What Should You Do Now?
The Social Security Administration (SSA) is recalculating benefits and will issue updates about payment schedules. Here are steps you can take:
- Verify Your Records: Check your Social Security earnings record to ensure all data is accurate.
- Stay Updated: Ensure your contact information is current with the SSA for smooth communication.
- Consult Advisors: A financial planner can help you understand how these changes impact your retirement income.
Looking Ahead
While the new law is a win for retirees, it comes with a hefty price tag—$196 billion over the next decade. Experts warn this could accelerate the depletion of the Social Security Trust Funds. Policymakers may need to consider additional funding measures, like raising the cap on taxable earnings, to maintain the program’s long-term stability.
This is a pivotal moment for retirees. By staying informed and proactive, you can make the most of these changes and enjoy a more secure retirement.
