Are you a former government employee receiving Social Security? Well you may be in for a nice new years surprise!
On January 5th, President Biden signed into law the Social Security Fairness Act. The Social Security Fairness Act eliminates two longstanding provisions for Social Security: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules previously reduced Social Security benefits for retirees who receive pension income from non-covered employment.
This bipartisan Act comes as a victory for many including advocacy groups who have lobbied for this change for decades. This legislation extends Social Security benefits for millions of employees, averaging a $360 increase for eligible public sector workers, as well as their spouses and survivors. Qualified workers include police, firefighters, postal workers, public school teachers, and other government employees.
Those who qualify need not apply for these increases, which will happen automatically. Many Americans can also expect to see a lump-sum payment in order to to compensate for benefits missed in prior years, which could amount to several thousand dollars per recipient. The Social Security Administration is still reviewing how to implement the law, so there is no timeframe for these increases for the moment.
Between this and the recent 2.5% cost of living adjustment, many households are poised to receive a financial boost. With the pending change in Social Security income, it may be beneficial to revisit your retirement strategy. Please consult your advisor regarding any questions, changes, or additions to your retirement investment strategy. If you are not currently working with an advisor, please fill out our Discovery Questionnaire to schedule a 15-minute discovery call with our team. We would love to discuss your values and goals in order to determine if we would be a good fit to serve you.
Sources: CNBC
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Harvest Point Wealth Management and LPL Financial are not endorsed by or affiliated with the United States Social Security Administration or any government agency.