A long-awaited bill promises to bring significant retirement benefits to millions of Americans in the public sector. Social Security 2100: A Sacred Trust, introduced by U.S. Congressman John Larson, would repeal the Government Pension Offset (GPO) and the Windfall Elimination Provisions (WEP), which have penalized educators, nurses, first responders, and others by reducing the Social Security benefits of public employees and their surviving spouses. Historically, retirees, mostly in seven states, California, Colorado, Illinois, Louisiana, Massachusetts, Ohio and Texas, were subject to WEP.
Social Security is currently set to run out of money by 2034. This shortfall would result in a 20% drop in benefits. The proposal extends the date that benefits would expire to 2038 in order to give Congress more time to find a long-term solution to what could be a significant retirement crisis. In the meantime, minimum benefits would increase and the income threshold to payroll taxes would climb to $400,000, up from the current threshold of $142,800.
Other changes this bill would bring if passed into law:
- Increases the average benefit for all Social Security recipients by about 2%
- Improves the annual cost-of-living adjustment (COLA) formula to more adequately deal with inflation increases as measured by the Consumer Price Index (CPI)
- Sets minimum payments at 25% above the national poverty line
- Improves benefits for widows and widowers in a two-income household
- Repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)
- Ends the five-month waiting period for disability insurance benefits
- Provides caregiver credits for time spent out of the workforce
- Extends benefits for eligible students through age 22
- Increases access to benefits for children who live with grandparents or other relatives
Questions? You can reach Simon & Simon Financial in Louisiana at 985-900-2510.