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Especially important is to reach out to widows or widowers whose Social Security survivor benefits were reduced or eliminated due to their public pension. GPO reduced survivor spouse benefits by two-thirds of their pension.
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Often, retired surviving spouses lost 100% of the Social Security benefits that their spouse had been receiving. This can put a significant strain on household income.
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Also important: Check with any qualifying divorced clients with public pensions whose former spouse has died. There may be additional benefits they are eligible for.
Timing on Retroactive Checks and Payment Increases
It will take the Social Security Administration months to operationalize the new formulas and run calculations to return benefits to several million retirees. The SSA website has a dedicated page, at Information about the Social Security Fairness Act, where new information will be posted as it becomes available.
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Advisors should manage client expectations that this will be a many-months-in-development process. Clients do not need to do anything except make sure they can access their individual Social Security online account — and be patient.
Social Security will proactively update benefit amounts and communicate directly with affected individuals.
Planning for Pre-Retirees Also Needed
It’s also time to revisit retirement income plans for clients who planned a reduced Social Security benefit due to WEP and GPO. These clients may now see an improved projected plan.
It’s important to connect all the dots with these clients. If the plan assumed a reduction for WEP or GPO, and a further 25% reduction for Social Security’s solvency concerns, you may want to revisit that assumption.
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Assume that Social Security will be around for the long haul: Congress will eventually come up with a solution to shore up and stabilize future payments. With this first move to address Social Security’s shortcomings, we should expect more to come over the next decade.
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Marcia Mantell is the founder and president of Mantell Retirement Consulting Inc., a retirement business and education company supporting the financial services industry, advisors and their clients.
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