How the Social Security Fairness Act Affect You? by Michael Franks, Senior Wealth Advisor

On January 5th of this year President Biden signed the Social Security Fairness Act. This Act has caused significant changes in how individuals qualify for retirement income benefits.

What You Need to know About the Social Security Fairness Act:

For retirees and government employees, Social Security Benefits play a crucial role in financial planning for the future. However, if you dedicated your career to public service and either you or your spouse earned the required 40 work credits in the private sector to qualify for Social Security, you may have faced reduced benefits due to the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These policies have significantly impacted the retirement income of many public servants. Now, with the introduction of the Social Security Fairness Act, much-needed change is on the horizon. It’s essential to understand how this legislation could affect your retirement planning and financial goals.

What is the Social Security Fairness Act?

The Social Security Fairness Act is a bipartisan effort aimed at eliminating the WEP and GPO. For decades, these provisions have caused financial challenges for government employees, such as teachers, police officers, and firefighters, primarily those who receive pensions but did not pay into Social Security for part of their career.

  • Windfall Elimination Provision (WEP): This provision reduces Social Security retirement benefits for individuals who receive a government pension.
  • Government Pension Offset (GPO): the GPO affects spousal and survivor benefits, often significantly reducing or even eliminating them for individuals with a government pension.

The Social Security Fairness Act repeals both WEP and GPO, ensuring that public servants receive the full Social Security benefits they have earned.

How could this Impact You?

The Social Security Fairness Act could mean more financial stability for public servants and retirees. For many retirees, this translates into thousands of dollars annually in restored benefits, giving more breathing room for expenses such as healthcare, travel, or simply enjoying retirement.

For those planning retirement, the repeal of WEP and GPO may offer more predictable income streams, making it easier to build a sound financial strategy that reflects your goals and dreams.

Understanding how this legislation directly impacts your financial plan is essential, especially if you have a public-service background or qualify for a government pension.

What Should You Do Next?

At Vantage Financial Partners, we understand the unique challenges retirees and government employees face. If you are wondering how the Social Security Fairness Act might impact your benefits or you would like to explore strategies for maximizing your retirement income, our experienced team is here to help you anticipate changes and confidently adjust your retirement plan as needed.

If you are notified by the IRS about potential benefits, please reach out to your Vantage team so we can discuss how this change fits into your financial plan.

Together, we will create a plan that aligns with your values, aspirations, and goals.