Pay increases for retirees will begin in April. About 2.8 million retirees who were previously impacted by two federal laws will benefit from the boost in Social Security payouts. Millions of American citizens get their monthly benefits from the Social Security Administration (SSA).
But the bipartisan Social Security Fairness Act, which was just passed, will result in a large rise in payouts for a particular set of seniors beginning in April.
President Biden signed this bill just before the conclusion of his tenure to reverse some cuts that had impacted the benefits of people in some occupations who had not made direct contributions to Social Security.
2.8 million retirees will see their pensions increased starting this April
The boost in payments will help about 2.8 million retirees who were previously impacted by the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), two federal programs. Workers who earned money from occupations where they did not contribute to Social Security had their payments cut by this rule. Among those affected individuals are these people:
- Teachers
- Firefighters
- Police officers
- Federal employees under the Civil Service Retirement System
- Foreign social security workers
This policy also impacted retirees who were qualified to receive benefits as surviving spouses even though they received a pension from their job without making any Social Security contributions.
Its removal will allow these recipients to get the full amount of compensation to which they are legally entitled. For this reason, a one-year retroactive payment will be given to beneficiaries at the end of February in addition to the monthly increase that will be implemented as of April.
Moreover, keep in mind that all retirees eligible for the increase will receive official notices from the Social Security Administration (SSA) through the mail. The precise amount of the adjustment and eligibility will be covered in detail in this communication. Beneficiaries can use the calculators on the official Social Security website to estimate the increase.
At what age can retirees receive their full Social Security benefits?
The eligibility age for full Social Security benefits will increase to 67 starting in 2025. To prevent issues, personal finance specialists advise careful planning. Those turning 65 in 2025 will have to wait a few years before receiving their full Social Security benefits.
This is a component of a progressive change that started in 1983 when the full retirement age (FRA) was gradually raised from 65 to 67 by a statute passed by the US Congress. This change was made to account for longer life expectancies and prolong the time that Social Security benefits would be paid.
Starting this year, anyone born in 1960 or later will not be able to get their full Social Security payment until they are 67 years old. Though the monthly amount will be much lower, people who would rather begin getting their payments earlier might do so as early as age 62.
In addition to guaranteeing that you will receive all of your benefits, waiting until you reach full retirement age can also improve your spouse’s benefits, according to Ben Rizzuto, wealth strategist at Janus Henderson Investors. Waiting until you are 67 years old will result in a greater monthly payment.
Your benefit, for instance, will be around 30% less if you begin collecting at age 62. Social Security also provides an 8% raise to age 70 for every year you delay past full retirement age.
Although many plan to wait until age 65, the actual average retirement age is still 62, as revealed in a 2024 Employee Benefit Research Institute survey. Many are forced to retire earlier for health reasons, problems at work, or because they have the financial ability to do so. According to the survey, 35% of workers retired earlier than planned due to difficulties such as health problems or disability.
