Big News for Public Servants: Social Security Rules Have Changed
On January 5th, President Biden signed the Social Security Fairness Act into law. This major update gets rid of two long-standing rules that reduced benefits for many Americans: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
For years, these rules lowered Social Security payments for people who worked in public service jobs—like teachers, police officers, firefighters, and some healthcare workers—if they also had a pension from a job that didn’t pay into Social Security. Now, those cuts are gone, and more than 3 million retirees will get their full benefits back.
What’s Changing and What You Can Expect
- One-Time Lump-Sum Payments Are Coming: If your benefits were cut by WEP or GPO in the past, you might get a one-time payment to make up for what you missed. The Social Security Administration (SSA) is already working on these payments, which go back to January 2024. They expect to finish them by the end of March.
- Higher Monthly Benefits Starting in April 2025: Starting in April 2025, you’ll begin receiving higher monthly Social Security payments. These new amounts will no longer include the WEP or GPO reductions.
- Expect an Official Letter in the Mail: SSA will send a letter explaining the amount of your one-time payment and how your new monthly benefit is calculated. They’re asking people to wait until after April before calling with questions.
What You Need to Do
- Already receiving Social Security? You don’t need to do anything. Just make sure your mailing address and direct deposit info are up to date so you don’t miss your letter or payment. You can check this by logging into your My Social Security account.
- Not yet applied for benefits? Head to ssa.gov/apply or call 1-800-772-1213. Expect longer-than-usual wait times.
Why This Matters
The WEP and GPO rules often felt unfair. They hurt people who served their communities and also worked in private sector jobs. These changes fix that by making sure public workers get the full Social Security benefits they’ve earned—just like everyone else.
But this update is more than just fair, it can make a difference in your retirement income.
Additional Steps You Can Take Now
- Review Your Retirement Plan
If you’re retired—or close to it—now is a great time to review your financial plan. With more Social Security income coming your way, your budget, taxes, or withdrawal strategy from retirement accounts may need to be adjusted.
- Update Your Tax Strategy
More Social Security income may mean higher taxable income. Social Security benefits can be taxed depending on your total income. A tax professional can help you understand if your new benefit level will change your tax situation—and what you can do about it, like adjusting withholding or looking into Roth conversions.
- Consider How This Affects Your Spouse
If you’re married and one of you is receiving spousal or survivor benefits, these changes might increase both of your benefits. It’s worth checking.
- Stay Informed
SSA processes can take time. Continue to check for updates from the SSA and sign up for alerts through your My Social Security account. You’ll get faster access to letters and updates online than by mail.
- Talk to a Trusted Financial Advisor
This rule change could affect more than just your monthly check, it might influence when you should start Social Security, how much you take from your retirement accounts, or even how you leave assets to your heirs. A trusted advisor can help you see the full picture.
We’re Here to Help
Retirement should be built on clarity and confidence. If you’re not sure how this new law affects your financial plan, we’re here to walk you through it. We’ll help you understand how these changes fit into your broader strategy, including taxes, income planning, and long-term goals.
