Breaking down the Social Security Fairness Act: Fast and simple.
Hi reader,
With all the changes to government programs in the new year, I want to make sure to highlight an important update to Social Security benefits that you might have missed.
Previously, workers who paid into a non-covered pension would receive only a reduced portion of their full Social Security benefit in retirement. (A pension is non-covered if the employer didn't pay into Social Security benefit.) In Texas, many school districts don't pay into Social Security, so hundreds of thousands of teachers, staff and administrators fell into this category.
The change brought about by the bipartisan Social Security Fairness Act, signed on January 5, 2025, does away with those offsets. This change isn’t impacting the majority of retirees, but we wanted to share our summary in case you or your loved ones are one of the 3 million Americans who are impacted.
Claiming your Social Security benefits is one of the most frustrating and mysterious parts of retirement with most people. If you’re wondering how to navigate this piece of your plan, I can help you understand your options. You can respond directly to this email, and I’ll find a time for us to connect.
Sincerely,
Kacie
When it comes to planning for retirement, understanding your Social Security benefits is essential.
Read more about the Social Security Fairness Act on the Social Security Administration website (SSA), and see below for a brief overview - including an important reminder about scams.
What is the Social Security Fairness Act?
Signed into law on January 5, 2025, the Social Security Fairness Act ends the Windfall Elimination Provision and Government Pension Offset. Previously, recipients of an employer-based pension not covered by Social Security did not pay Social Security taxes on that money. As a result, their Social Security benefits were reduced or altogether eliminated. The Social Security Fairness Act now increases the benefits for this group of people - over 3 million individuals. This increase begins with benefits payable from January 2024.
What action do I need to take?
Depending on your situation, the SSA may recommend actions to take. Each individual case is different - stick to trusted sources when determining your next steps. Our office is happy to help.
Did WEP/GPO keep you from applying for retirement, spouse’s, or surviving spouse’s benefits? Or are you unsure whether you applied for benefits in the past?
You may need to apply. The quickest way to do so is to go to https://www.ssa.gov/apply.
Is WEP currently reducing your benefits, or are you a spouse or surviving spouse with reduced benefits due to GPO?
The SSA suggests logging in to https://www.ssa.gov/myaccount and making sure your mailing address and direct deposit information is up to date. This makes it easier for the SSA to update your benefits, but otherwise the change is automatic.
Depending on your situation, the SSA may recommend actions to take. Each individual case is different - stick to trusted sources when determining your next steps. Our office is happy to help.
Do you have questions about how an increase in Social Security benefits could influence your retirement planning?
Our team is here to help. You can respond directly to this email or give us a call at 512-368-9179, and we’ll find a time to talk through your unique situation.
Your partners in thoughtful planning,
The Team at Black Barn Financial
A quick reminder about Social Security-related scams.
These updates to WEP and GPO are very recent, and the SSA is working to adjust benefits for over 3 million people. Unfortunately, scammers are already exploiting this time of transition.
The SSA will never:
Demand payment for WEP/GPO recalculations
Threaten to suspend your benefits
Ask for gift cards or cryptocurrency
For trusted information on the Social Security Fairness Act and updates to WEP and GPO, visit the SSA’s official FAQ. To report a scam, visit the SSA’s Office of the Inspector General website. Once again: WEP/GPO updates to current benefit recipients are automatic, and the Social Security Administration will never phone or email you threatening to suspend your benefits or demanding personal information or payment.