Revisited: Social Security Considerations

Episode Transcript

Speaker 1 (00:00):
Who benefits from the Social Security Fairness Act. On Sunday,
President Biden signed the bipartisan Social Security Fairness Act into law.
It's a law that is purported to bring additional benefits
to millions of Social Security recipients. So who are the
beneficiaries and how much more can they expect to receive?
According to the Social Security Administration, the new law eliminates

(00:23):
the reduction of Social Security benefits while entitled to public
pensions from work not covered by Social Security. It's a
straightforward explanation, but it still kind of requires some additional understanding.
You have approximately two and a half to three million
current and former public sector employees that have had Social

(00:44):
Security payments reduced under two rules that were repealed under
the new law, the windfall Elimination provision and government pension offset. Previously,
the Social Security Administration would reduce what are known as
non covered pension, or a pension paid by an employer
that does not withhold Social Security taxes from one's salary,

(01:07):
most commonly public sector employees. The idea was to keep
public sector employees from effectively double dipping from government provided
pension programs in Social Security payments, but the passage of
the acts. The average beneficiary of the change will receive
three hundred and sixty dollars more per month in their

(01:29):
Social Security payments. While the reform is certainly a plus
for those benefiting from the new law, it will place
additional strain on the Social security program. The cost increase
from the new social security law is estimated at one
hundred and eighty billion dollars. The result is that the
social security program now expected to reach insolvency approximately six

(01:50):
months sooner than previously estimated in twenty thirty five