These provisions previously reduced Social Security benefits for public-sector employees and their spouses who also received government pensions. With the repeal, millions of affected individuals can expect to see higher Social Security payments.
Starting the week of February 24, 2025, the Social Security Administration is beginning to pay retroactive benefits and will increase monthly benefit payments to people whose benefits have been affected by the WEP and GPO. Most affected beneficiaries will begin receiving their new monthly benefit amount in April 2025 (for their March 2025 benefit).
While this increase in benefits is promising, there are some important factors to consider. First, if you qualify, higher benefits could push you into a higher tax bracket, leading to increased taxation of your Social Security income—up to 85% of benefits may be taxable depending on your provisional income. Additionally, you may face higher Medicare Part B and Part D premiums due to income-based surcharges (IRMAA), which can increase premiums anywhere from 35% up to 200%.1
Given these potential implications, now might be a good time to review your financial plan. The boost in Social Security income could impact your tax strategy, withdrawal plan, and investment allocations. It's also a great opportunity to reassess your retirement goals and adjust based on your updated income.
If you have questions regarding the Social Security Fairness Act or your retirement strategy, reach out to your Janney Financial Advisor.
Working With Janney
Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.
If you engage in a brokerage relationship, you will buy and sell securities on a transaction basis and pay a commission for these services. Our recommendations for the purchase and sale of securities will be based on what is in your best interest and reflect reasonably available alternatives at that time.
If you engage in an advisory relationship, you will pay an asset-based fee, which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory relationships.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
By establishing a relationship with us, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest and unique needs, goals, and preferences.
Contact us today to discuss how we can put a plan in place designed to help you reach your financial goals.
1. Expecting a Social Security Fairness Act Benefit Boost? Watch Out for Tax Traps. ThinkAdvisor.com. January 28, 2025. https://www.thinkadvisor.com/2025/01/28/expecting-a-social-security-fairness-act-benefit-boost-watch-out-for-tax-traps/?utm_source=pushengage-rss&utm_medium=pushnotification&utm_campaign=pushengage
Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
