Big changes are here for anyone with a government pension. The recently passed Social Security Fairness Act, has officially eliminated the Windfall elimination provision and the government pension offset, and that could potentially put thousands of dollars back into retirees’ pocketbooks that they really earned and deserved all along. If you or somebody you know has a government pension, this podcast is for you. It could be a huge boost to you and that’s what we’re going to dive into today.

It’s called the Social Security Fairness Act. And for a change, the law that has passed actually is correctly named. Now, I want to be clear. This Act is for those of you who have a government pension, which means only about 2.9% of all the people in America are really pertinent to this podcast. But if you are in that 3%, little less than 3%, it is humongous for you, or if you’re married to somebody who’s in that 3% or so that has a government pension, it’s going to impact your retirement.

If you have a private pension, disavow this completely because in a private pension, unlike a government pension, you are not impacted by the windfall elimination provision on your social security.

The Windfall Elimination Provision was a bill that was passed a long time ago. It’s been enforced for decades, and it’s actually cut the social security available to somebody who had a government pension because as that bill was named, they considered that a windfall for you to be double dipping as you were getting a full social security and a full government pension. Now the second thing that it eliminated was the government pension offset. Now that affected a surviving spouse’s social security and it could affect that surviving spouse’s social security as much as two thirds.

In other words, if your spouse passed away and they had a gigantic government pension, that’s good, you got a hundred percent of that, but bingo, it targeted two thirds of your own social security because again, they considered that double dipping.

So, in the first few weeks of January, that’s when this happened, the Social Security Fairness Act was passed, and that eliminated both the windfall elimination provision that impacted your own social security if you had a government pension. It also eliminated the government pension offset that impacted a surviving spouse’s social security if they inherited from their spouse upon the spouse’s death, a large government pension. So it was a win-win all the way around. Now I’m telling you about this, not because I have any details. You said what? Yeah, because that’s the way Congress passes a lot of things.

They passed it and the official publication out through Social Security – You can check it out yourself, but I want to get the word out there that they have eliminated it – but per their website, all the details and the specific information is going to follow.

So, who should stay alert if you have a government pension that you’re drawing on now because there’s a possibility – They’ve talked about going back and doing makeup payments for at least the year 2024. Remember, don’t hold me on this. They’re just talking about it and they’re saying that it might be in the details. I don’t know if they’ll go back past 2024, but if you’re already drawing your government pension, it’s really important that you realize they may give you back pay for 2024, and they probably will give you an increase starting in 2025. If you have a government pension and you’re not drawing yet, then all the rules for your retirement changed.

Your retirement plan didn’t get blown up, it got increased, it got helped. And you probably need to revisit with your retirement planner if they’re more than just an investment advisor and they’re really a planner and they’ve addressed your income in retirement and you are not drawing yet. You’ve got all new rules. Some of you are sitting there waiting for that pension to get large enough that you feel like you can retire and you already knew always that your social was going to be dinged a bit. Well, guess what? You may have $300, $500, $600, maybe even a $1,000 a month more that will be coming to you because of this Social Security Fairness Act. That’s if you have a government pension and you’re drawing, it could give you an increase and even back pay. And if you’re not yet drawing, it could give you the freedom to go ahead and to retire even earlier than you were planning.

So what actions should you take? Two things. Number one, and this comes straight from social security, make sure your address is correct so when they do get the details, they’ll get the information out to you. I think there’s a better way. Most good financial planners who are really retirement planners are going to be all over this. So, if your financial planner is doing what he or she should be doing, they’re going to be all over this. And if you’re going to get an increase, they’re going to be aware of it because they know your situation and you need to go in and talk to them. It may just turn on a couple of more lights and a couple of more trips and a couple of more dances into your retirement because you’re going to have extra money.

So, make sure your address is correct and then follow up with your financial planner because it has altered and this time not in a negative way, it has altered your financial plan.

Now maybe you’re sitting there saying, “Boy, I wish I had a government pension, but I don’t have one.” Well pass this along to someone you know who does have a government pension because their rules changed and they’re going to get more money potentially if they paid in the Social Security along the way. Pass this podcast along to somebody who does need it, who does have a government pension.

Hey, I promise you every week if you’ll give me a few minutes, I’ll do my best to increase your financial knowledge. And if we can help you, particularly about a situation, a question, anything you’ve got, go to the website, get an appointment, give us a call. We’ll see you next time!