The Social Security Fairness Act, signed into law by former President Joe Biden, is set to bring significant changes to the retirement landscape in the United States in 2025. The Act eliminates two key provisions, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which had prevented millions of Americans from accessing full Social Security benefits if they were already receiving a pension or retirement plan from their previous employment. The primary beneficiaries of this reform include teachers, firefighters, police officers, and other public sector workers.
According to estimates from the Congressional Budget Office (CBO), ending the WEP will increase monthly benefits for an average of two million affected Americans. Additionally, repealing the GPO could boost monthly payments for approximately 380,000 surviving spouses of deceased Social Security beneficiaries and around 390,000 spouses could see a significant increase of up to $1,190 per month. However, the implementation of these changes is expected to take some time.
The Social Security Administration (SSA) has cited a lack of funds to implement adjustments without compromising daily customer service, and a hiring freeze imposed in November 2024 has made executing the new policy even more challenging.
Social Security reform impacts beneficiaries
It may be 2026 before the affected beneficiaries see any of this extra money.
Senator Rosen (D-NV) has joined a bipartisan group of Senate colleagues in urging the current administration to swiftly implement the Social Security Fairness Act. They are calling for the immediate implementation of the legislation to provide prompt relief to the millions of Americans impacted by WEP and GPO. Retirement age changes will also play a critical role in the evolving landscape for retirees.
The full retirement age (FRA) is currently 66 years and 8 months for individuals born in 1958 and early 1959, and 67 for those born in 1960 or later. Delaying retirement beyond the FRA can be a strategic move to maximize benefits, but individuals must carefully consider the pros and cons, taking into account factors such as personal health, financial needs, and lifestyle goals. With ongoing policy adjustments, staying informed about Social Security changes is crucial for those approaching retirement.
Understanding the details of this reform and its impact on retirement planning will help individuals make strategic decisions and adapt to the evolving retirement system in the United States.
