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Written by: Patrick Durst | Front Range Financial
On January 5th 2025, Millions of retirees recived some good news: The Social Security Fairness Act has repealed two controversial provisions—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules previously reduced or eliminated Social Security benefits for people receiving pensions from jobs that didn’t pay into Social Security.
For years, teachers, firefighters, police officers, and certain federal employees have seen their benefits cut because of these rules. Now, thanks to this new legislation, their Social Security benefits are increasing, and retroactive payments are on the way. But here’s the catch: Those who never applied for Social Security benefits before might miss out entirely.
What Changed?
The WEP and GPO were designed to prevent so-called “double-dipping,” but in reality, they often unfairly penalized public servants. Under the new law, these reductions are gone, and more than 3.2 million people will see their Social Security benefits increase. The Social Security Administration (SSA) is also issuing retroactive payments dating back to January 2024.
For financial advisors, this is a crucial opportunity to review with your clients and ensure that those affected take full advantage of the new rules. Many retirees may not even realize they are eligible for benefits, either their own primary, or spousal benefits and should be encouraged to apply if they have not done so already.
Why It’s Important to Apply Now
If someone has a pension from a job that didn’t pay into Social Security and never applied for benefits before, they could be leaving money on the table. Unapplied for Social Security benefits are not automatically applied retroactively meaning if you don’t take action nothing will happen. That means the longer someone waits to apply, the more benefits they could miss.
Even those already receiving Social Security should check their updated benefit amounts. The SSA is automatically adjusting payments, but errors and delays can happen, so it’s wise to verify any changes. According to the Social Security Administration, Social Security adjustments should began taking place late February.
Steps Advisors Can Take to Help Their Clients
Financial advisors play a critical role in helping retirees navigate these changes. Here are some steps to ensure clients maximize their benefits:
1. Identify Affected Clients
Start by reviewing client lists to find those who:
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Have a pension from non-covered employment (state and local government workers, some federal employees, etc.).
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Have had their Social Security benefits reduced due to WEP or GPO.
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Never applied for Social Security because they assumed they weren’t eligible or the benefit was too small.
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Are receiving a non-covered pension and lost a spouse
2. Encourage Clients to Apply
Many retirees may not realize they can now qualify for benefits. Advisors should encourage affected clients to apply as soon as possible to avoid missing out on payments. Since retroactive benefits are limited, waiting could mean lost income.
3. Assist Clients with the Application Process
Applying for Social Security can be confusing, especially for those who were previously ineligible. Advisors can:
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Walk clients through the application process on the SSA website.
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Help them gather necessary documents, such as proof of non-covered employment and pension statements, dates and counties of prior marriages, and information about ex and deceased spouses.
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Ensure they correctly report past earnings to avoid application delays.
4. Review Benefit Statements
For clients already receiving benefits, advisors should review their updated Social Security statements to confirm that the WEP and GPO adjustments have been applied correctly. If any discrepancies arise, clients should contact the SSA immediately.
5. Educate Clients on Their New Financial Picture
With increased Social Security benefits, some clients may need to revisit their financial strategy. Advisors should help them:
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Reassess their income distribution plans.
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Evaluate the tax efficiencies of the new found Social Security benefit.
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Potentially reduce distributions from IRA’s
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Revisit charitable intentions
6. Stay Updated on SSA Changes
The SSA is still rolling out these changes, and further clarifications may arise. Advisors should monitor updates from the SSA and inform clients about any new developments that could impact their benefits.
A Historic Shift in Social Security
The repeal of WEP and GPO is a major win for public sector retirees. It’s a chance for many who dedicated their careers to public service to finally receive the full Social Security benefits they deserve. But time is of the essence—anyone who hasn’t yet applied should take action soon to maximize their benefits.
By taking a proactive approach, financial advisors can ensure their clients navigate this transition smoothly and secure the benefits they are now entitled to receive.
For more information, visit the SSA’s official page on the Social Security Fairness Act here.
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