How Does the Social Security Fairness Act Impact Your Financial Future?

Host Wes Cuprill explains how the new Social Security Fairness Act impacts government and public sector retirees. Learn how the elimination of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) could increase your retirement benefits.

Key Points
+ Public  sector workers can now receive full Social Security benefits alongside their government pensions
+ Important for teachers and others who held multiple jobs throughout their careers
+ Wait for official guidance before making financial changes
+ Consider consulting a financial advisor to optimize retirement strategy

Contact Money and Clarity: 513-563-7526 | visitwithmc.com

Chapters 🕓
00:00 - Intro
00:15 - Name Change
00:57 - Social Security Fairness Act
02:57 - Sponsor
03:59 - What Should I Do?
06:11 - Conclusion
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Transcript

>> Wes Cuprill: 0:00

Anybody who's collecting a government pension or a public sector pension cannot also collect full Social Security benefits. Hello there and welcome to another episode of what we are now calling the WWW podcast. A quick explanation for the change. I began to realize that a lot of what I talk about applies to more than just women sometimes. But I also don't want to get rid of the Wealth Wise Women segment because a lot of what we do is still helping women in particular plan for retirement. So I do want to continue addressing a lot of personal finance topics from the lens of how they affect women in particular. In this segment, while keeping the WWW theme, if you will, I will address other topics from a broader viewpoint called Wealth Wisdom with Wes. For this year's first episode, I want to talk about the recent signing of the Social Security Fairness Act. It affects a lot of people, particularly a lot of our existing clients and prospects, and I'm going to use people from Ohio as an example, but it applies to, public sector workers across the country. Let's go back to the 1980s when the windfall elimination provision and then the government pension offset were first signed into law. These laws essentially said anybody who's collecting a government pension or a public sector pension cannot also collect full Social Security benefits. Because what they thought at the time was that this was kind of double dipping into the system. If you are a public sector employee, you don't pay what's called FICA tax, which is what is paid into the Social Security system. So then why should you collect full benefits? But what they didn't account for is the fact that many public and sector employees held jobs outside the public sector before or after their public sector employment. Teachers, for example, example, many of them hold second jobs, especially during the summer when they went to retire. They weren't able to collect on Social Security because they were also collecting from their public service pension. So the Social Security Fairness act is designed to eliminate this unfairness. If you are, for example, collecting from an operh's pension, you are now most likely going to see an increase in your Social Security benefits. Now, just like every change to tax law and laws in general, there is going to be some time for interpretation. The Social Security Administration, the IRs, all the other bureaucracies now need to take some time to understand how they are going to implement the law. This episode of the Wealthwise Women podcast is brought to you by Money and Clarity. Wall street likes to make personal finance and investing complicated, but we are here to tell you that it isn't. But saving and investing for your future can bring with it stress, emotions and uncertainty, as well as many questions like how much do I need to have saved for retirement? What happens if the market declines? And probably the most important question of all, will I be okay? That's where we come in. Not only can we help simplify the financial planning process, we can also help guide you through all the emotions and uncertainty that come with planning for your future. So give us a call today at 513-563-7526 or go to visitwithmc.com to schedule a free no obligation consultation. We'll discuss how we might be able to help you achieve your financial goals and provide you peace of mind knowing that you will be okay. I want to encourage you to do a few things now that this law has been signed into effect, the first of which is do absolutely nothing for the near term. We don't know yet how it's going to benefit you exactly. You may see an increase in your benefits, but you don't know yet how much. There's various estimates out there. I don't know exactly what they're going to end up coming out to. In some cases, some people will see several thousand dollars in added benefits. When you do have a better understanding of exactly how your benefits are going to be affected, I encourage you to analyze your numbers. Don't just say, holy cow, I got a raise, let me go spend all that money. For those of you who are in retirement, it is crucially important to assess how this change affects your retirement plan. Now in all cases, more money is absolutely a good thing, but you don't want to just all of a sudden start spending that money willy nilly. You want to assess how that can fit into your overall plan. Especially if you are drawing down on your retirement benefits. You now may be able to reduce the amount that you are withdrawing from, say your 401k or your IRA, and as a result, grow your nest egg even more over time. When you do have an understanding of how your benefits are affected, meet with a professional. If you already have a financial advisor, talk to them, ask them to revise your plan and assess how these changes affect you. If you don't have an advisor, well, me being an advisor myself, obviously I'm a proponent of hiring a professional. If you'd like to meet with us, certainly go to visitw with mc.com. i'd love to discuss how this change could affect you. There's another segment of the population out there that is affected by this new act. Those are the people out there who are collecting a public sector pension and also collecting spousal benefits. Before this law, those of you collecting spousal benefits saw those spousal benefits be reduced because of you drawing upon a public pension. Well, the great news is it looks like because of this new act, you will no longer see a reduction in those benefits. You will be receiving the full spousal benefits. So as I begin to learn more about this law, I will definitely be talking to it more and more in coming content. But I wanted to discuss it now and give you those first two tips. 1. Do absolutely nothing just yet. Don't go increasing your spending because you think you're going to see an increase in your benefits. But two, once you do have an understanding of how much your benefits are going to change as a result of this act, take a look at how it affects your overall financial plan. Don't increase your spending willy nilly. Say, okay, we now have this much more coming into our checking account each month. How does that affect our overall retirement? If you have any questions about the Social Security Fairness Act, Social Security in general, or any other retirement questions, please don't hesitate to go to visit with MC com and book a time that works best for you. I'd love to have a discussion about this or anything else that might be affecting you. So that being said, I hope you have a great rest of your week and I'll see you in the next episode. Thanks.