The new Social Security Fairness Act in the United States appears to be good news for thousands of American citizens, who will see their benefits from the Administration increase. However, because this process can take “up to a year”, recipients of this new assistance will face significant delays in receiving their payments.
According to the Social Security Administration, it “does not have the funds to implement the adjustments without negatively affecting daily customer service”. This institution, therefore, indicates that this new policy is further hampered by a hiring freeze imposed in November 2024.
Former President Joe Biden signed the Social Security Fairness Act into law on January 5, repealing two long-standing provisions: disregard for windfall gains and government pension offsets.
These provisions had previously barred millions of Americans from receiving Social Security benefits if they were already eligible for a pension or retirement program through their employer. This new measure primarily affected public-sector employees such as teachers, firefighters, and police officers.
New retirement age in the United States by 2025
Retirement is another major issue confronting American organizations tasked with managing these matters. In fact, the Congressional Budget Office estimated that eliminating the Windfall Elimination Provision would increase monthly benefits by an average of $360 for the more than two million Americans affected.
For its part, the CBO estimated that repealing the Government Pension Offset provision would increase monthly benefits by $700 on average for approximately 380,000 spouses of deceased Social Security beneficiaries.
Similarly, another 390,000 spouses were expected to receive a $1,190 monthly increase if they were affected by a provision that reduced or eliminated their Social Security benefits. However, the new payments are expected to put additional strain on the Social Security Trust Funds, which are facing an impending insolvency crisis.
As a result, the year 2025 will see significant changes for retirees in the United States, particularly in terms of retirement age and Social Security benefits. These changes will affect both those who are nearing retirement and those who are currently receiving benefits.
Although it is possible to begin receiving benefits at the age of 62, doing so before the full retirement age results in a permanent reduction in monthly benefits.
- In 2025, the full retirement age will be 66 years and 8 months for people born in 1958 and the first two months of 1959.
- Born in 1960 or later: this group will reach full retirement age at 67.
Thus, according to the Social Security Administration (SSA), for every year you postpone your retirement beyond full retirement age, the amount of your pension will increase. Delaying retirement can be a strategic option for maximizing monthly benefits.
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