Millions of Americans still depend on Social Security to make ends meet. Over 70 million Americans get some kind of benefit from Social Security. Most of them get money from the retirement fund. The fund will likely be affected by new laws in 2025, and changes that will make the fund last longer are also likely to happen soon.
New changes for Social Security
News about changes to Social Security payments for next year came out earlier this year. Now, new laws are expected to have an effect on beneficiaries starting in 2025.
Now that the Social Security Fairness Act has been passed by the House of Representatives, it needs to be passed by the Senate. The goal is for the act to be passed before the time when Biden and Trump take over as president.
Social Security is supposed to help people in retirement, but new data shows that 53% of workers now expect Social Security to cover all of their costs when they retire.
The truth is that this is how things are for most people who get Social Security payments and do not have any other source of income. The Social Security Fairness Act was made possible by new information, such as the fact that 73% of workers are worried that they will not have Social Security when they retire.
How will the new Fairness Act change things for Social Security
The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) are going to be done away with by the new bill.
By doing this, people with certain jobs, like teachers or firefighters, will see their pay go up because the legislation clauses in these bills will be taken away.
People who work in these fields can get a pension, which means that their Social Security benefits are cut under current law. The new bill also wants to make sure that people whose loved ones have died continue to get full Social Security benefits.
Even though both Democrats and Republicans support the bill, it needs to be passed before December 31st. If it isn’t, someone else will have to come up with a new draft, and the whole process will have to start over.
It will cost the government $190 billion over the next ten years if the bill makes it through the Senate. Rep. Garret Graves of Louisiana is the one who sent the bill to the House.
The new legislation does not avoid controversy entirely
A lot of people like the new bill, but some people do not like it because they think it could make Social Security less stable. When it was first created in 1983, WEP was meant to fix a problem that people who get a pension from work that is not covered by Social Security but also get Social Security benefits from other work faced.
The problem comes up because Social Security benefits are meant to give low-income people a higher share of their income based on how much they have paid into the system.
People who did not work for a company that paid into Social Security but still have pensions may seem to have lower incomes than people who worked for a company that paid into Social Security their whole careers. In 1983, this difference was seen as a “windfall” for those workers.
Critics say, “Imagine that you had two people with the same salary: one who paid into Social Security for 35 years and another who paid into Social Security for only half that time but had a state pension.” Under the proposed Fairness Act, the benefit for a state worker could be up to 45% higher each year than for a worker who has put in money their whole career.
This bill would not only fix an unfair windfall in the system, but it would also make a program that is already having a hard time even worse.
No matter which group you belong to, beneficiaries are reminded that the best way to get the most out of their payments is to put them off for as long as possible and have other savings ready for when they retire.
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