A New Social Security Law Will Give Some Retirees Over $1,000 More Per Month, but Not Everyone Will See a Change

Source Motley_fool

If you're on Social Security, you're probably used to small changes to the size of your benefit checks every year due to cost-of-living adjustments (COLAs). But major changes to those benefits are pretty rare. That's what makes the recently enacted Social Security Fairness Act such big news.

The law, which former President Biden signed in January, canceled two key Social Security provisions that reduced the benefits owed to 3.2 million Americans. That group includes retired workers, spouses, and surviving family members of deceased workers. Some will see their checks increase by more than $1,000 per month. However, others won't notice any difference at all.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Excited couple looking at document together.

Image source: Getty Images.

You may already know whether the new law affects you. But if not, here's how you can tell.

Only select beneficiaries qualify

The Social Security Fairness Act eliminated the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP reduced Social Security benefits for retired workers receiving pensions from employers that didn't withhold Social Security taxes. The GPO did basically the same thing for the spouses of the workers affected by the WEP.

Government workers are the group most likely to be affected. This includes police officers, teachers, firefighters, and state and local government employees. However, not everyone who worked in one of these professions will see extra money under the Social Security Fairness Act. About 72% of state and local public employees are working in positions where their employer pays into Social Security on their behalf, so they won't see a benefit hike because their benefits were never dialed down under the formulas of the WEP or GPO.

Those who are affected may have already received a notice from the Social Security Administration highlighting the upcoming changes. If you haven't, this could mean that either you won't see a benefit increase or that yours might take the agency some additional time to process.

What to expect in the coming weeks

The Social Security Fairness Act increases benefits for affected workers. The majority of these workers should notice the change beginning with their April 2025 payment. The size of the increase depends on your past earnings history.

Workers affected by the WEP will see an average increase of $360 per month. Spousal beneficiaries will see their checks increase by $700 per month on average. And widow and widower beneficiaries will receive the largest average increases -- $1,190 per month.

The Social Security Fairness Act applies to all benefits payable after December 2023, so if you've been receiving checks for a while, in addition to larger checks in the future, you may be entitled to a one-time retroactive payment. The Social Security Administration expects to distribute most of those by the end of this month. The money should go to the bank account you currently have on file for direct deposit of your regular benefit checks. If you'd like to choose a different account for your retroactive payment, you can contact the Social Security Administration directly or sign into your my Social Security account online to make the change yourself.

When calculating the sizes of the adjustments owed to people, there are some complex cases the Social Security Administration hasn't been able to automate. If yours is among them, you may have to wait up to one year for your benefit adjustment and retroactive payment, as a government employee will have to manually process the update.

The Social Security Administration asks that beneficiaries wait until April before reaching out with questions regarding their retroactive payments. It also requests they wait until after they've received their April payments before contacting it with questions about their new monthly benefit amounts.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Trump, Xi Meet on S&P 500's Best Day Since Early August: Will Markets Stay Bullish?President Donald Trump and Chinese leader Xi Jinping meet in Washington this week for their second summit of the year. The meeting came at a time where Wall Street suddenly turned bullish.The visit ai
Author  Beincrypto
3 hours ago
President Donald Trump and Chinese leader Xi Jinping meet in Washington this week for their second summit of the year. The meeting came at a time where Wall Street suddenly turned bullish.The visit ai
placeholder
As Wall Street Turns Suddenly Bullish, Questions Arise if Bitcoin Will Follow or FlopWall Street strategists say markets have cleared several of September’s biggest fears. Bitcoin (BTC) jumped more than 6% to trade near $86,600 as risk appetite returned.Anastasia Amoroso is chief inve
Author  Beincrypto
3 hours ago
Wall Street strategists say markets have cleared several of September’s biggest fears. Bitcoin (BTC) jumped more than 6% to trade near $86,600 as risk appetite returned.Anastasia Amoroso is chief inve
placeholder
Market Is Primed for a ‘Face Ripper' Rally Thanks to Four Ingredients Says Tom LeeFundstrat head of research Tom Lee says the market is primed for a face-ripping rally into month end. He named four specific ingredients behind the call.Lee, a CNBC contributor, joined Freedom Capital
Author  Beincrypto
3 hours ago
Fundstrat head of research Tom Lee says the market is primed for a face-ripping rally into month end. He named four specific ingredients behind the call.Lee, a CNBC contributor, joined Freedom Capital
placeholder
USD/JPY Forecast: Yen Strength Puts 152 Support in Focus as BoJ Tightening LoomsUSD/JPY remains under pressure as the Japanese yen strengthens ahead of another potentially important Bank of Japan policy decision. The pair has fallen toward the mid-155 region after breaking below
Author  Beincrypto
3 hours ago
USD/JPY remains under pressure as the Japanese yen strengthens ahead of another potentially important Bank of Japan policy decision. The pair has fallen toward the mid-155 region after breaking below
placeholder
Waited for Bitcoin's October Bottom? Benjamin Cowen Says He Was WrongBenjamin Cowen, founder of Into The Cryptoverse, publicly admitted his bearish Bitcoin call failed on Monday, as the cryptocurrency broke decisively above $85,000 and squeezed short sellers.The revers
Author  Beincrypto
3 hours ago
Benjamin Cowen, founder of Into The Cryptoverse, publicly admitted his bearish Bitcoin call failed on Monday, as the cryptocurrency broke decisively above $85,000 and squeezed short sellers.The revers
goTop
quote