How Much is Social Security Reduced if I Have a Pension?
The Social Security Fairness Act, signed into law on January 5, 2025, ends the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). This legislative update eliminates previous penalties, ensuring that eligible recipients can now receive their full benefits without reduction. These rules previously reduced Social Security benefits for individuals who also received pensions from non-Social Security-covered employment, including:
- Teachers
- Firefighters
- Police officers
- Certain federal employees
Approximately 3 million individuals from these groups are expected to benefit, while 72% of government employees will see no changes to their benefits.
When Do These Changes Take Effect?
- Retroactive payments for those already receiving benefits will begin in late February 2025.
- Adjustments to monthly benefits will be reflected in April 2025.
Steps to Take Now
While the new legislation suggests pensions will no longer reduce Social Security benefits, interpretations may evolve, and further adjustments could emerge as the law is implemented. Those nearing retirement should continue with their planned benefits strategy without making immediate changes.
To prepare for these changes:
- Ensure your Social Security account details are accurate and up to date.
- Hold off on making inquiries about benefit changes until April 2025, when adjustments will be fully implemented.
This new law is a major step toward fairness for many government employees, and staying informed will help individuals maximize their benefits.
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Michaela Dowdy
Financial Advisor, Wiser Wealth Management
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