Social Security payments to increase for public pension recipients
Published On Feb 27, 2025, 5:22 PM
A new law, the Social Security Fairness Act, will increase Social Security payments for certain public pension recipients, including teachers, firefighters, and police officers who were previously affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) policies. These policies reduced benefits for about 3.2 million people. The law eliminates these restrictions retroactively from January 2024, which means beneficiaries will receive a one-time retroactive payment by the end of March 2025 and increased monthly payments starting in April. The change is expected to add $196 billion to the federal deficit and hasten the insolvency of the Social Security trust fund by six months.
Stock Forecasts
XLY
Positive
The elimination of restrictions affecting pension recipients increases disposable income for a segment of the population which may stimulate spending in various sectors. This could positively affect companies involved in consumer goods and services.
TLT
Negative
Increased deficit spending due to the new law may lead to greater economic uncertainty and potential tax increases in the future, creating a negative outlook for broader economic conditions.
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