Social Security Benefits Increase for 3.2 Million Retirees – The Unwelcome Surprise Inside

Good news for retired people, but there will be a delay in getting benefits

Former President Joe Biden signed a Social Security Fairness Act, millions of retired people breathed out. This new law will work to increase the benefit of social security 3.2 million retired and more than their spouse. Two old rules end, because of which many people could not get their full rights.

However, retirees who expected that additional money would start coming into their bank account soon are facing an unexpected delay. It may take time for this law to be implemented and benefits to be received, which may disappoint many people.

What is the Social Security Fairness Act

Social Security is a complex system, with many rules to decide who can avail of it and who will get how much amount. The new law eliminates two major controversial rules that previously reduced the Social Security amounts of many retirees.

1. What is the Windfall Elimination Provision (WEP)

The WEP reduced the Social Security amounts of retirees who received pensions from institutions that did not deduct Social Security taxes. This mainly included state and local government employees, teachers, and some federal employees. In 2022, this rule resulted in more than 2 million Americans getting underpaid.

2. What is the Government Pension Offset (GPO)

The GPO reduced or eliminated spousal or survivor benefits for those who were receiving pensions from institutions that did not deduct Social Security taxes. In 2022, this rule affected about 734,000 people, which was a major financial challenge for them.

With the removal of these two rules, many retirees and their spouses may be eligible to receive more Social Security payments each month. The Social Security Administration (SSA) estimates that some people could receive an additional amount of $1,000 or more.

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How ​​much will the Social Security amount increase

The benefit from the Social Security Fairness Act will vary from person to person. It will depend on the amount of their non-covered pension (where Social Security taxes are not deducted) and how much Social Security amount they are entitled to.

But this change is quite significant, as the SSA estimates that some retirees could see a monthly income increase of up to $1,000.

In addition, a 2.5% cost-of-living adjustment (COLA) for 2025 has already been implemented, meaning retirees affected by WEP and GPO could see a substantial increase overall.

But the real question is: When will people receive the extra money?

An unexpected delay – Why is the money so late?

When the law was passed, many retirees expected to start receiving their increased amounts soon. But they were dealt an unexpected blow as the SSA announced that benefits would be delayed.

What are the reasons behind the delay?

1. Additional funding not received – The law was passed, but the SSA was not given the additional budget to recalculate benefits quickly. 2. Complex recalculation process – SSA has to recalculate the benefits of more than 3 million retirees and pay them from the beginning of 2024. This is a complex and time-consuming process.
2. Staff shortage – SSA has banned the recruitment of new employees from November 2023 and the number of employees has also decreased, which is further delaying this process.

Due to these reasons, it is estimated that many retirees may have to wait for a year or more.

What retirees can do

If you were affected by WEP or GPO and are eligible to get more money under this new law, you have to be patient. Some important steps can be taken during this time.

1. Be Patient – SSA has confirmed that the payments will be implemented from the beginning of 2024, which means that whatever increased amount you are due to receive will be combined with the previous months.
2. Be careful with your budget – Since it is not clear when the money will arrive, avoid making big financial decisions and control expenses carefully.
3. Double check your eligibility – If you did not apply for spouse benefits earlier due to GPO, now is the time to check your eligibility according to the new rules.
4. Keep an eye on SSA updates – Keep getting regular updates by checking the official website of SSA or by contacting their representative, so that you get the right information.

Other ways to increase retirement benefits

Many retirees rely solely on Social Security benefits, but there are other strategies you can use to boost your monthly payout.

• Delay Social Security benefits – The longer you hold off on claiming your benefits, the more your monthly payout can increase.
• Claim spousal benefits correctly – Many people don’t realize they can receive higher benefits based on their spouse’s work history.
• Make the most of your working years – Your Social Security amount is based on your 35 best-paying years, so if you’ve worked a few short years, consider making up for those years by working extra.

With a few smart decisions, retirees can receive up to $22,924 more annually.

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Conclusion

The Social Security Fairness Act has come as a big relief to many retirees. This law removes the old rules that prevented many from getting their full entitlement. However, this benefit may be delayed, so people need to be patient and manage their expenses wisely.

Until this money starts arriving, keep an eye on your budget, check your eligibility according to the new rules, and keep an eye on SSA updates. This law will help strengthen the financial position of retirees in the long run.

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