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The following presentation by New England Capital Financial Advisors, LLC (“NECFA”) is intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from NECFA or any other investment professional of your choosing. Please see additional important disclosure at the end of this penetration. A copy of NECFA’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.newenglandcapital.com.
Ask The Advisor: The Social Security Fairness Act
Hi, this is Chris Beale with New England Capital and we're continuing with my series on Ask The Advisor.
We received quite a few questions about the new Social Security Fairness act that was signed into law January 5th by former president Biden. Just to give you a little history it was designed to eliminate the windfall elimination provisions and the government offset provisions of Social Security. Those provisions reduce Social Security benefits for those who were receiving non-covered pension from their jobs. Typically, people in the public sector roles like teachers, policemen firefighters and so forth. The rules were intended to prevent Social Security from overpaying people who worked in non-covered pension jobs but were also receiving Social Security benefits because they worked for employers who were actually covered by Social Security.
So again, since Social Security replaces a higher percentage of earnings for low paid workers than high paid workers those who were receiving healthy government pensions for decades would receive the same advantage in Social Security calculations as a longtime low-income worker.
Some people have been waiting for years for this law to correct this disadvantage. Unfortunately, even though the law has passed, most people will have to wait a little longer to receive their benefits. The reason for this is that even though Congress and the president passed this law in January the Social Security Administration simply does not have the funding or the people to process all the new claims or adjust existing claims for those 3 million people who are affected.
Essentially if you have been collecting Social Security and those benefits have been reduced by the windfall elimination provision or the government offset the effective date is retroactive to January 2024. This means that you will receive a lump sum payment to make yourself whole but because of the shortfalls in the Social Security Administration offices that could take at least a year to adjust the benefits and pay all the retroactive benefits that are due.
A couple of other related questions we've received: Do I need to have worked 40 quarters (about 10 years) in the Social Security system to be eligible? The answer is YES. So, if you never worked at any other job except a non-covered job, like a policeman or a fireman or a teacher, chances are you don't have 40 quarters of work history in the Social Security system and would not be entitled to benefits unless you are the widow or widower where your spouse was covered by the SS system or collecting benefits.
Anyone still working at a non-covered employer (for example, you’re still teaching or on the police or fire department) it is now more beneficial to think about part time work to get to 40 quarters for eligibility.
Also, if you’re retired but haven’t applied for your benefits, I recommend applying online at SSA.gov, or call or go online for an appointment with Social Security. At SSA.gov you can check your status and get your work history. Again, know that there may be delays in even getting an appointment due to the lack of agency funding and personnel shortages.
So, if you think you're eligible but aren't sure you can call the office or go to ssa.gov to help determine your new benefits. Make sure you bring your Social Security estimates with you when you come to our office which will help us with your retirement planning.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by New England Capital Financial Advisors, LLC [“NECFA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from NECFA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. NECFA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the NECFA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.newenglandcapital.com. Please Note: NECFA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NECFA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a NECFA client, please contact NECFA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.