Title: Over 2.8 Million Americans Eligible for Delayed Social Security Benefits - When's Your Turn?
Bills proposing changes to Social Security aren't uncommon in Congress. With the program nearing potential insolvency within a decade, legislators are frequently brainstorming strategies to prevent necessary benefit cuts. However, most of these bills never advance beyond proposals. An intriguing exception recently landed on President Biden's desk.
The Social Security Fairness Act, devoid of addressing Social Security's funding crisis, aims to enhance benefits for 2.8 million Americans who advocates claim have been unfairly penalized throughout the years. Consequently, these senior citizens are entitled to reimbursement. Here's what we know so far.
The Social Security Fairness Act, a pinpointed crusade
The Social Security Fairness Act eliminated two Social Security provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Both provisions served similar purposes, but the WEP targeted retirees, while the GPO focused on the spouses of those retirees.
These provisions reduced the benefits of workers earning "non-covered pensions," i.e., pensions paid by employers not withholding Social Security contributions. This was prevalent in government jobs, including teaching and policing positions. In summary, they had their Social Security benefit calculations altered, reducing check sizes due to insufficient payroll tax contributions over the years.
Now that it has been abolished, these individuals can anticipate larger Social Security checks going forward. This is because their benefits will now be calculated in a manner equivalent to those of typical retirement recipients.
Bonus for these retirees: the law will be applied to all benefits issued after December 2023. Therefore, affected seniors who filed benefits claims last year can expect to claim reimbursement for back Social Security benefits.
Unanswered inquiries
President Biden's recent signature on the act means that affected senior citizens will receive additional benefits. But several specifics remain unclear. It's estimated that the typical retiree affected by this change can expect about $360 more per month. However, individual benefits will vary based on income history and withheld funds under the WEP or GPO.
For instance, if you were entitled to a $360 increase, you could expect roughly $4,320 in retroactive benefits for an entire year of 2024. But remember, benefits will vary by person.
The government hasn't announced a timeline or plan for implementing the new Social Security Fairness Act requirements. The new Trump administration will likely handle detailed logistics, so obtaining payments may take time.
Stay informed by ensuring the Social Security Administration (SSA) has your current mailing address and direct deposit information on file. Update this information in your my Social Security account or contact the local Social Security office. The SSA has yet to provide more detailed guidance.
The passage of the Social Security Fairness Act provides a financial boost for eligible seniors, as President Biden signed the bill that eliminates the Windfall Elimination Provision and the Government Pension Offset, both of which reduced benefits for retirees and their spouses with non-covered pensions. With the abolition of these provisions, these individuals can expect larger Social Security checks starting from 2024, as their benefit calculations will now be similar to those of typical retirement recipients.
As this act aims to rectify past financial discrepancies, the potential impact on retirement savings and overall financial planning should be considered. Seniors may need to review their current retirement strategies and adjust their long-term financial plans accordingly, considering the potential increase in monthly income due to the reimbursements and larger Social Security checks.