MARKET UPDATE
Xerxes Nabong, CFP®, CDFA®
Philip M. Maliniak, CRPC®
Nicole Brown-Griffin, CFP®, CDFA®, EA
Aaron Petty, Client Associate
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Social Security Fairness Act Becomes Law
On Sunday, January 5, 2025, President Biden signed into law H.R. 82, the Social Security Fairness Act*. This landmark legislation, which passed with bipartisan support in both the House and Senate, introduces significant changes to Social Security benefits. Specifically, the Act eliminates the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), two provisions that have long reduced Social Security benefits for individuals who also receive pensions from state or local governments.
What is the GPO and WEP?
The Government Pension Offset (GPO) reduced Social Security spousal or survivor benefits for individuals who received a government pension from work not covered by Social Security. For many, this offset could result in a significant reduction—or complete elimination—of spousal or survivor benefits.
The Windfall Elimination Provision (WEP) adjusted the formula used to calculate Social Security benefits for those who earned a pension from work not covered by Social Security (such as certain state, local, and federal government jobs) while also qualifying for Social Security benefits from other employment. WEP often reduced benefits by hundreds of dollars per month.
What Does This Change Mean for You?
The elimination of the GPO and WEP ensures that retirees and their families receive the full Social Security benefits they have earned, regardless of whether they also receive a government pension. This is especially impactful for public-sector employees, including educators, first responders, and city and state workers dedicated to supporting their communities.
For individuals currently receiving reduced benefits due to the GPO or WEP, these changes will take effect for benefits payable beginning in January 2024. This means many retirees and their families will see an increase in their monthly Social Security checks.
Why Is This Important?
The passage of the Social Security Fairness Act addresses decades of inequities and brings greater fairness to the Social Security system. By removing these offsets, the law ensures that all workers and their families are treated equitably, whether they worked in the public or private sector.
What Steps Should You Take Next?
We understand that changes to Social Security can be complex and have a significant impact on your retirement plans. Our team is here to guide you in understanding how these updates may affect your unique situation. Whether you’re currently receiving Social Security benefits, preparing for retirement, or developing a long-term plan, we’re ready to provide personalized support.
If you have questions or need assistance, don’t hesitate to reach out. We’re dedicated to equipping you with the knowledge and guidance necessary to navigate these changes confidently and make informed decisions for your financial future.
Thank you for placing your trust in us. We’re honored to support you on your financial journey.
Your Team at Wealth Avenue,
*H.R.82 – Social Security Fairness Act of 2023 – Congress.gov
