Social Security Is Now Even Less Reliable For Millennials Than Ever

Sweeping changes are coming to Social Security as well as the agency that administers it in 2025, requiring a rethink of how central or reliable advisors should consider the service for their clients.

Following the passage of the Social Security Fairness Act last year, and former President Joe Biden signing it into law on Jan. 5, the Social Security Government Pension Offset and Windfall Elimination Provision have both been repealed.

This means that about 3.2 million people who previously had their benefits lowered because they received a “non-covered pension” will now receive the full benefit.

See Also: Musk’s DOGE Staffers Revolt! Refuse To ‘Dismantle’ Services

Originally, the Social Security Administration said adjusting everyone’s payments and back-paying the full amount starting January could take a year or more. Now, the agency is promising a one-time retroactive by the end of March, and higher benefits starting in April, in all but the most complex cases.

This could mean a substantially higher standard of living in retirement for millions of retired teachers, firefighters, police officers, people who have worked abroad, and Civil Service workers.

But while the administration speeds up the implementation of this new law, day-to-day tasks and requests are about to get a lot slower. Acting commissioner Leland Dudek recently requested managers at the agency to give him a plan for reducing the number of workers at the Social Security Administration by half.

For an agency with an employee count already at 50-year lows, even as the wave of Baby Boomers retiring is cresting, this could affect wait times, error rates, and more. 

The acting commissioner is also calling for the closing of many agency offices to save money, which will put in-person appointments with a Social Security Administration official that much harder. For older generations unsure of technology, the proposed replacement of Social Security officials with online chatbots is likely to prove a challenge.

For advisors, this means that current retirees affected by the new law will have more wiggle room in their financial plans soon, allowing for a rethink of their plans. But for younger clients, advisors may have to treat and educate their clients to treat, Social Security as less reliable than previously thought.

Add the office closures and manpower cuts to the ever-present, oft-discussed funding shortfall, and Social Security is looking less certain for millennials than ever.

Now Read:

• Federal Reserve’s Preferred Inflation Gauge Marks First Slowdown In 4 Months

Image: Shutterstock