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#84 - REPLAY: Social Security Fairness Act

Eric Blake: Hi everyone. Eric Blake, host of the Simply Retirement Podcast. As we take a little time this week to enjoy the holidays with family, I wanted to replay one of our most important and most popular episodes of the year—our episode on the Social Security Fairness Act. This episode was originally released in February following the signing of the Social Security Fairness Act into law in January of this year.

For many women, this has already been life changing. However, I also know that there are many that have likely not been made aware of this important change to their Social Security eligibility. With that, let's get to our replay of Episode 40: The Social Security Fairness Act. Welcome to the Simply Retirement Podcast.

We want to make the process of women planning for the retirement you deserve a little easier. I'm your host, Eric Blake. On today's show, we have a very special listener question-and-answer episode. We are going to answer questions about the recent passage of the Social Security Fairness Act.

This is a huge change in Social Security policy and the retirement planning landscape for many, many women across the country. We've received a ton of questions over just the last couple of weeks, and we want to help you understand what it is, who it impacts, and what you need to do now. Joining me once again is producer extraordinaire, Wendy McConnell. How are you?

Wendy McConnell: Well, I'm very good. Thank you for that lovely introduction. How are you?

Eric Blake: I am well. I'm well. So before we get to the listener questions, I've got a question for you since this is our first episode in 2025. Are you a New Year's resolution person or no?

Wendy McConnell: Not really. I know—what a big bummer. No, not at all. Hey—

Eric Blake: I'm not either. Somebody asked me that question the other day. I'm like, no, I'm the one that kind of gets annoyed by all the people showing up at the gym at 6:30 in the morning using all the equipment. You just have to be patient, though. That's all it takes.

Wendy McConnell: Yes, you—well, you know, I actually started working out a couple of months before the new year, but now I just pulled a hamstring and I haven't been able to do anything for like four days now.

Eric Blake: Yeah. So I haven't played pickleball—this is week two—because I've got a little calf thing. It happened a couple of weeks ago. It’s actually a little bit older than that. I tried to get back, and it didn't work out. So I am trying to give it a little more time, trying to be patient with that too, but it's not working really well.

Wendy McConnell: You can't re-injure, so you have to take the time off.

Eric Blake: Part of just getting old, right? I guess that's what the video is telling me. I can still walk.

Wendy McConnell: Right.

Eric Blake: So what I wanted to do, Wendy, if it's okay, is give a little bit of background on the Social Security Fairness Act. I think that is really important for our audience to understand, because one of the things the Social Security Fairness Act does is it impacts a lot of women.

And I'll explain why that is as we go through this. But let's start with the basics first. So, the Social Security Fairness Act was signed by President Biden on January 5th, 2025. And the bottom line is this: the Social Security Fairness Act—it's been in the works for a while—but what it does is eliminate the Windfall Elimination Provision, and it eliminates the Government Pension Offset. The Windfall Elimination Provision is often referred to as WEP, and the Government Pension Offset is often heard of as GPO.

Now, the big thing to keep in mind is these are both provisions within Social Security that impact individuals who have or are eligible for a pension through work that was not covered by Social Security.

So when you think about that, let's think about teachers. A lot of K–12 teachers do not contribute to Social Security. They contribute to their retirement system. For example, here in Texas, we have the Texas TRS. That's what our Texas teachers contribute to—they contribute to TRS, not Social Security.

But then there are also, of course, police officers, firefighters, and a lot of public sector workers. So again, if you do not contribute to Social Security through your employment, or you were employed at some point where you did not contribute to Social Security and you are eligible for a pension through that employment, WEP or GPO will impact you.

You want to pay attention to some things. We're going to talk about these questions. I'm going to cover a lot of this through the questions, but again, I want to give a little bit of background. And again, specifically for our audience, because our focus is helping women plan for retirement. You think about how many are teachers—

Wendy McConnell: Yeah.

Eric Blake: You think about how many are in that public sector space. So that's where this is really—honestly, it's going to be life changing. We already have clients that I've connected with and said, “Hey, here's what's going on, here's what you need to know.”

And we're going to answer some questions that'll help others plan for those same implications. And we're going to make sure you understand what it does, what it means to you, and, more specifically, what you need to do now.

Wendy McConnell: Well, I'm very good. Thank you for that lovely introduction. How are you?

Eric Blake: I am well. I'm well. So before we get to the listener questions, I've got a question for you since this is our first episode in 2025. Are you a New Year's resolution person or no?

Wendy McConnell: Not really. I know—what a big bummer. No, not at all. Hey—

Wendy McConnell: You can't re-injure, so you have to take the time off.

Eric Blake: Part of just getting old, right? I guess that's what the video is telling me. I can still walk.

Wendy McConnell: Right.

Eric Blake: So what I wanted to do, Wendy, if it's okay, is give a little bit of background on the Social Security Fairness Act. I think that is really important for our audience to understand, because one of the things the Social Security Fairness Act does is it impacts a lot of women.

Wendy McConnell: Yeah.

Wendy McConnell: A listener in Illinois says that public school teachers do not pay into Social Security. So I only have about 20 points from summer jobs, but my late husband paid into it and collected when he retired. I could not get any Social Security benefits from him under the old laws because of my pension. So can I get some benefits now?

Eric Blake: Well, I think this is a good chance to step back a little bit and talk about WEP—the Windfall Elimination Provision. So if you have worked in both types of employment—jobs where you did contribute to Social Security and jobs where you did not—then WEP may have applied to you.

So in her case, we're talking about being a public school teacher in Illinois. In order for you to be eligible for anything on your own record, you still have to meet the criteria of having 10 years of earnings history to qualify for Social Security benefits on your own.

That's what she’s referring to when she talks about having “20 points.” She’s talking about having 20 credits. To qualify for her own benefit, she would have needed 40 credits. She doesn’t have enough. That's one of the distinctions to keep in mind: what she may be eligible for on her own record versus now, because the Government Pension Offset has been eliminated.

The answer to your question is yes—assuming she is eligible—she is now going to be able to start receiving a survivor benefit based on her husband's work record.

Wendy McConnell: Okay.

Eric Blake: So that's where we look at it now and say: you want to—now here’s also something we’ll talk about in the action items a bit later. If you have not applied in the past, you want to apply for those benefits as soon as reasonably possible.

We talked about the law being retroactive to January 1st, 2024. If you have never applied, you want to apply. If you have not applied up to this point, don’t expect to receive payments going back to January 1st. So you want to make sure you apply as soon as reasonably possible so that those benefits can start.

Wendy McConnell: Got it. So, another listener asks: “I've never paid enough to get Social Security. I've worked 28 years as an ISD School Café Manager—I imagine you know what ISD stands for?”

Eric Blake: Independent School District.

Wendy McConnell: Okay. “I won’t get a lot from TRS when I retire. I lost my late ex-husband, who I was married to for 24 years. I do draw his now that I’m old enough. I want to retire, but they said that due to the GPO and WEP rules, I would lose two-thirds of his Social Security. So does this new law that Biden signed—will it help me get my late ex-husband’s benefits? I’m still drawing. They told me I would lose about $600 when I retire, so I chose to keep working so I can draw the greater amount I receive now. This is the first year I actually do not have to pay them money back due to making too much.”

Eric Blake: Yeah, so let's talk about that last part she touches on, because this gets back to understanding the timing of when to apply. One of the things she is referring to is the earnings test. What that means is she started receiving a benefit—being a reduced benefit due to the Government Pension Offset—but because she was still working, she was having to pay a good portion of it back. It sounds like she may have been paying all of it back. So she was subject to the earnings test. Essentially, she was making too much money to receive that benefit.

So now what will happen for her is a couple of things. She might get a pretty significant raise here because of several factors. If she has reached her full retirement age, all of those benefits she had to pay back in the past—she is now going to get those recalculated into her current benefit at full retirement age. So her benefit is going to go up just because of that.

On top of that, because the Government Pension Offset has been eliminated, she is going to get an increase to the full survivor benefit of what she was eligible for had GPO not been in place. So she is not only going to get an increase as a result of previously paying money back—putting Social Security benefits back into the system because she was working—she is also going to get a more significant increase from GPO being eliminated.

Now, another caveat: because she started benefits early, whether you're talking about survivor benefits or your own retirement benefit, starting early reduces the amount you receive over your lifetime.

Wendy McConnell: Right.

Eric Blake: So again, go back to Episodes 24 and 37 to learn more about how starting benefits early impacts your future benefit amounts.

But she is still going to get an increase. She is going to get that increase because GPO has been eliminated, and she's also going to get the increase from having reached full retirement age and having those previously withheld benefits recalculated.

Wendy McConnell: So, the final question we have here is: “GPO eliminated my widow’s benefits. Do I get the full amount he received before his death, or do I get the amount he received when he first started collecting Social Security?” Is she talking about the increases you get from things like cost-of-living adjustments?

Eric Blake: No. So what she is asking—and this is a great question—is: now that GPO has been eliminated, and she seems aware that she is going to be eligible for something, what exactly is she going to be eligible for?

What she is asking is: “Do I receive the amount he started with when he first claimed Social Security, or do I receive what he was receiving at the time he passed away?”

Wendy McConnell: Okay.

Eric Blake: So the answer is: you are eligible for up to 100% of what he was receiving on the day he passed away.

Wendy McConnell: Okay.

Eric Blake: So you may be thinking about cost-of-living adjustments and things like that. Let's say when he first applied, he was receiving $2,000 a month. But by the time he passed, he was up to $3,000 because of COLAs over the years.

She would be eligible to receive up to $3,000 per month—whatever he was receiving when he passed away—before factoring in her age at the time she claims.

If she is above full retirement age, she will receive whatever he was receiving when he passed. If she starts earlier than that, then that $3,000 will be reduced, but it will still be based on that $3,000 number.

And again, this sounds like one of those situations where she never applied because she realized she wouldn’t receive anything due to GPO. So you want to get that application in as soon as possible.

Also, again—refer back to Episode 37—you cannot file for survivor benefits online. You can do it by phone or in person. So get that call scheduled or get that meeting scheduled at your local Social Security office.

Wendy McConnell: So is there—I know that personally, when you are looking into receiving your Social Security benefits, if you wait a few years, the benefit usually gets larger. Is that the same in the situations we’re talking about here?

Eric Blake: It is—to an extent. So again, it depends. We have to separate retirement benefits from spousal-related benefits, including survivor benefits.

Let’s start with your own retirement benefit…

Eric Blake: Let’s start with your own retirement benefit. Full retirement age is somewhere between 66 and 67. If you were born in 1960 or later, your full retirement age is 67. If you start before that, your benefit will be reduced for every year you claim early. You can delay up to age 67 and receive additional delayed retirement credits up to 100% of your full retirement age benefit at 67.

Now, you also have the option—on your own benefit—to continue to delay and receive additional credits for the next three years, up to a maximum at age 70. You never want to apply after age 70. Age 70 is the max. Whatever your benefit is at age 70 is the maximum you can receive. That is how your own benefit works.

So if you were subject to WEP—the Windfall Elimination Provision—that still plays into that decision. Your Social Security benefit may have been reduced because you have a pension. If that goes away, you’re going to get an increase. You’ll start receiving whatever you would be eligible for on your own record. Then, depending on when you actually file, you may or may not get those increased benefits due to delayed credits.

Wendy McConnell: Okay.

Eric Blake: On the other side of the equation, we have spousal-related benefits—what are called auxiliary benefits. Again, refer to Episode 32, where we had a Social Security specialist on the episode, and we talked about some of these terms.

These are benefits based on someone else’s record. So you have spousal benefits or ex-spousal benefits—those are up to 50% of what your spouse is eligible for. And then you have survivor benefits.

That’s where the Government Pension Offset impacted both spousal and survivor benefits. Those benefits do not increase beyond full retirement age.

Wendy McConnell: Okay.

Eric Blake: So let’s go back to our example. Let’s say that at full retirement age, for survivor benefits, she could receive $3,000 per month. And let’s say her full retirement age is 67.

If she starts benefits before age 67, they’ll be reduced by some percentage. The earlier she starts, the greater the reduction. But beyond age 67, there is no additional increase. You don’t get delayed retirement credits on survivor benefits. So there is no point in waiting past full retirement age.

Wendy McConnell: Right.

Eric Blake: No point in waiting.

Then you get into situations like: If I am eligible for my own retirement benefit and am also eligible for a survivor benefit, which do I take first? Is there going to be a point where I can switch? Things like that.

Again, refer back to Episode 37 where we talked about survivor benefits to understand those specific decisions better.

Wendy McConnell: Okay.

Should we be concerned about all the talk of cutting Social Security benefits, Medicare, all of that kind of stuff?

Eric Blake: Let's tackle that from a couple of different angles.

Number one: Do not be surprised. For those of you who have been impacted by WEP or GPO, and now those have been eliminated, you are going to get an increase in income. But do not be surprised if that changes at some point in the future, and they create a revised version of both WEP and GPO.

Because—again, I said this at the beginning—this very likely accelerates the projected depletion of the Social Security trust fund. If many people who weren’t receiving benefits before now are receiving benefits, that’s going to—

Wendy McConnell: Add to the problem.

Eric Blake: Exactly. Add to the problem.

Wendy McConnell: Is there a way that the new administration can come in and just, like, executive order this and overturn it immediately?

Eric Blake: No, I would not expect that to happen. Because this was a very bipartisan approach. It cleared both houses by a high majority.

Wendy McConnell: Okay. Good.

Eric Blake: Even Trump came out in favor of it. So across the board it was approved. So I wouldn’t worry about that.

But it doesn’t change the fact that at some point, something is going to happen to shore up Social Security. Back to your question about the risk of Social Security “running out of money.”

From a planning perspective, you have to think about how you would feel planning for a possible decrease. So let’s talk through “worst case scenario.”

Worst case scenario: we reach 2034—because again, these projections fluctuate—and the trust fund is depleted. Worst case, they cut everyone's benefits by 25%. Problem solved.

Wendy McConnell: Okay.

Eric Blake: So from a planning perspective, some people say, “I’m just going to plan as though my benefit is 25% less.”

If my benefit would be $4,000, I’ll plan on $3,000, and build everything around that.

That’s option one.

The other thing to keep in mind is that in 1983, when the retirement age was extended to 67, it took 40 years for that to fully be implemented. So if you’re in our audience—55 and older—the likelihood of you being impacted by a major reduction is very low.

Realistically, it is going to affect people currently in their 20s and 30s, not people receiving benefits now or receiving them in the next 10 to 15 years.

Wendy McConnell: They’re on their own.

Eric Blake: They’ll have to deal with that! Kicking the can down the road tends to be the preferred strategy in Washington.

But from a peace-of-mind standpoint, that’s important. If you are truly worried, plan assuming a 25% reduction and build around that. That means: Do I work longer? Do I draw more from my investments? How do I make up that 25% gap?

Wendy McConnell: I like that answer. Thanks a lot, Eric. I appreciate it.

Eric Blake: Fair enough. All right, awesome. So let's talk about some next steps, because this is really where we want to direct you. What do you do now if you have been subject to WEP or GPO?

First thing: Make sure you check your Social Security statement. Go to SSA.gov and see what your benefits look like. If you're already receiving benefits, you might want to go back and look at your old records—what would you have been eligible for had WEP not reduced your benefit?

But go back and review your statements. See what you’re eligible for. See how this could impact you.

Second: Talk to a financial advisor. It’s a great time to revisit your retirement plan and look at what the implications will be. We’ve already started reaching out to clients we know will be impacted. In certain cases, this can be life changing—especially for women who have lost a husband.

Eric Blake: For example, we have a client who is going to get an extra $1,500 a month, and that is huge.

Wendy McConnell: I like that.

Eric Blake: You don’t like the circumstances around why—when you lose a husband under, in her case, a pretty tragic circumstance. Now she is trying to put all the pieces together. And right around Christmas and New Year’s, we get the word that, hey, you're going to actually be able to receive 100% of his survivor benefit. That makes a huge difference in her life. And that is just one example.

So talk to your financial advisor. Figure out what the implications are going to be. What might you need to change? What is the impact going forward? Because again, this is increased Social Security benefits—this is lifetime guaranteed income that goes up every single year with inflation. You have to know how that's going to impact you so you can make informed decisions.

The third thing is: You want to stay informed. We only answered five questions today. We have five more we could have gone through if we had time. So we're going to make sure we do another episode in the very near future to answer more of these questions.

But find a way to stay informed. Pay attention to the news. Contact the Social Security Administration. Figure out what's going on. Because some of these variables—we don’t know yet. We don’t know when lump sum payments will go out, but they are coming. It's just a matter of getting them calculated and identifying who is eligible. Who knows how long that may take? But know that it’s there and be aware of it.

The fourth thing: Apply for those benefits. I've already talked about this a couple of times. If you have not applied because you thought your benefit was going to be eliminated—apply. Get that application in.

We know someone—she’s not a client, she’s a friend—she taught for 40-plus years. She just retired. She’s substitute teaching to help make ends meet. Based on a previous spouse, she is going to be eligible for spousal benefits. She never would have expected that. But from a standpoint of asking, “Is this going to help me pay my bills?”—it makes a huge difference.

And that’s going to be the case for a lot of people out there. If you were married to someone for 10 years and divorced, think about whether you are eligible. And apply.

Now here is one other thing I’m going to suggest—and I haven’t seen confirmation one way or the other—but this is one of those little-known Social Security tricks:

If you are above full retirement age, you can apply and request six months of retroactive benefits.

So let’s say my full retirement age is 67 and I am now 68. We talked about the law being retroactive to January 1st, 2024. If you have never applied, you are not getting benefits going back to January 1st. But you might be able to say, “Hey, I’m 68. My full retirement age was 67. I want to apply and request six months of retroactive payments.”

Anybody can do that—as long as you are above full retirement age. You’ll get a lump sum for those six months. Now, it reduces your ongoing monthly amount slightly, but that lump sum could be big.

And in this case—where you never were receiving benefits anyway—apply and request that six-month retroactive payment.

Wendy McConnell: Sounds good.

Eric Blake: You want to get as much out of the system as you can, right?

Wendy McConnell: Yeah. I’ll take it.

Eric Blake: So make sure you apply. And if you are at full retirement age or older, request the six-month retroactive payment.

The fifth thing: Tune into our podcast. We've done a number of episodes on Social Security—everything from the “Top Five Things All Women Need to Know” (Episode 14), to Episode 32 where we interviewed a Social Security specialist who spent 25 years inside the system and shared a lot of tricks and things to be aware of.

The biggest thing he suggested—and what I’m suggesting as well—is: Be educated. When you make that phone call to the Social Security Administration, you want to know what information you're trying to get. Unfortunately, you cannot always rely on them to give you accurate information. I have heard way too many stories of the wrong information being passed along.

So know what you’re looking for. Know the questions you need to ask. You may not know the answers, but you need to know the questions.

And again—Episode 24 on spousal and ex-spousal benefits. That’s the Government Pension Offset part of this. Episode 37 on survivor benefits—that’s the one impacting so many women. Again, 83% of individuals impacted by GPO are women.

So understand what you’re eligible for. Whether you thought you were eligible or not—find out. See if there is money waiting for you now.

Thank you so much for tuning into our replay of this episode of the Simply Retirement Podcast on the Social Security Fairness Act. If you think this new law could impact you, don’t forget to visit the SimplyRetirementPodcast.com for links and resources you may find helpful.

To our audience, I hope you're also taking time to spend with family for the holidays. Thank you so much for tuning in. Don’t forget to like, follow, and share our show. And until next time, please remember: Retirement is not the end of the road—it’s the start of a new journey.

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