Millions of Americans may see their Social Security benefits increase under a bill headed to President Joe Biden’s desk — though critics warn that the measure comes at the cost of pushing the fund further toward insolvency.

If signed by the president before the new Congress convenes on Jan. 3, the law would boost Social Security payments to more than 2 million beneficiaries, according to the Congressional Research Service. The increases — as much as $550 a month for some retirees — would be retroactive to December 2023.

Those beneficiaries are mostly those who have received foreign pensions or government workers such as police officers, firefighters and teachers who contributed to a federal or state pension plan but didn’t pay Social Security taxes.

The legislation, called the Social Security Fairness Act, eliminates two formulas that reduced benefits for these workers who receive foreign and government pensions in addition to Social Security. Those provisions, known as the Windfall Elimination Provision and the Government Pension Offset, were enacted more than 40 years ago in response to an increase in retirees who hadn’t fully paid into Social Security and to more dual-income couples retiring.

Sponsors of the law say the old Congress over-corrected, and unfairly withheld earned benefits from retirees and their spouses. 

While the White House hasn’t said whether Biden would sign the bill, it passed both chambers with bipartisan majorities: 327-75 in the House last month and 76-20 in the Senate early Saturday morning.

The Congressional Budget Office estimated that the bill would hasten Social Security’s insolvency — now projected to come by 2034 — by another six months and add $196 billion to budget deficits over the next 10 years. As a result, a typical couple retiring in 2033 may see lifetime benefit cuts of $25,000, according to the Committee for a Responsible Federal Budget. 

The Senate rejected an amendment from Senator Rand Paul, a Republican from Kentucky, that would have pushed back the retirement age to 70. Only three senators supported the amendment.

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Firms that hire experienced people do not usually get what they expect or are paying for. Here is a template to help you maximize your investment in such people.

Usually, but not always, experienced people leave a job because they are not growing in their experience. Yet many firms hire these people expecting to capitalize on their “experience.” This makes no sense and seems to be illogical. However, it happens all the time. The following is a template to assist you in getting what you need or think you are getting. 

Salary level: The salary you will be paying will be the market rate. Not much higher or much lower, so regardless of what you are getting from your new employee, get over it! You will not be overpaying. You might not be getting what you think you are paying for, but you will be paying the market rate for that person.

Profile of new hire: You hired someone who has been specializing in the area that you hired them for. You also hired someone that probably had three or four jobs previously, with the last one or two (or more) in that specialization. What you do not know is the depth of their experience, how well they managed their workload or the people reporting to them, and what desire they have to grow further. If they had that desire, and they weren’t growing, then they “wasted” time in their growth trajectory trying to decide when they should leave. Further, their impression of their experience will not be the same as your expectations of their experience. Get over it!

Experience: I can almost guarantee that the new hire will not be able to perform at the level you expect them to, and my advice is to get over it. What you need to do is to evaluate their experience and figure out where they stand on the curve line of the scale that you expect. Not where you want them to be, but where they actually are. Once you figure that out, start your training and mentoring and everything else you do to move that staff person forward at the level they are at on your scale.

Getting what you are paying for: You will be not getting what you really need, but what the market has available. And whatever that is, you will likely be better off with that person than without that person, if you do not screw it up.

How to not screw it up: Do not give them work that you know they could not handle without training, supervising and being watched over closely. Start off with pretty easy work at a higher level, not the lower levels, and see how they do. Use that to guide you in where they need to go to help you. Go easy, but do it with steady forward movements. But do it slowly and deliberately. Consider your investment in a long-term relationship with that manager-level person. If they are the right person, it will become evident within a couple of months. If they’re not the right person, get rid of them quickly (see next item). 

Hire carefully, but fire quickly: I know of a very successful practice that used a headhunter for staffing and was provided with a two-month guarantee, so their timetable was seven weeks. I know this because someone who left me for a higher-level position called and asked me if he could have his job back seven weeks after he left. That person was not growing with me (for various reasons that I am not getting into now) and I told him so. We liked him and explained a program that we developed to have him grow sufficiently. He immediately started to look for a job, which he got. His job was filled by us with a three-year level staff person we hired out of school and who was ready to be moved up to that position. We did not miss a beat. That shows you how “valuable” he was to us, and how invaluable he was to his next employer. 

Be nice: It’s probably not all their own fault they haven’t grown. I’m sure the firms they worked at contributed immensely to that lack of growth. Be nice. Do not tell them how you feel about where you think they are on your scale of development or what your current expectations are. Just focus on using them to move you forward by helping them grow. Compliment them frequently and never disparage them. Be nice!

The past, present and future: Their lack of experience is in the past and is the present situation. Fuggeddaboudit! You hired this person so you could move your practice forward into the future. Focus on that future and getting there as easily as you can. You can do it with this person if you do not over-anticipate their ability or over-expect their output and production. 

Natural tendency: A natural tendency is to be upset with them and then to use them as best you can to clean up past due work, move things out and work on slightly higher lower-level engagements. You won’t be anxious to have them train anyone so they will become lone rangers. That is not how you will be able to grow and you will doom yourself to restart with someone very similar when that person leaves “because they are not getting good experience.” And then you will start over with someone who is a mirror image of the person who just left you. Your efforts become dissipated replacing someone who left rather than concentrate on nurturing staff so they will grow and stay. 

Set expectations to a lower level: When they start, do not expect more of them than is realistic. If you get more than you expect, you will be happy. If you get less than you expect, you will be miserable and probably make them, and everyone else around you, miserable. You can’t lose with lower expectations and might lose with the higher expectations. Choose can’t lose instead of might lose. 

The above is not really a template, but if I added three lines to each item and asked you to write what you think or will do and perhaps include a chart (for No. 3 above), it will be a template. Figure it out for yourself, but if you believe I make sense and you are stuck in a can’t win position unless you face reality, then get over it and make the best of it to move forward. And I just showed you how to approach that.

Do not hesitate to contact me at [email protected] with your practice management questions or about engagements you might not be able to perform.

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As much as financial advisors, tax professionals and their clients are racing toward the end of the year, these weeks represent a brief bit of calm before a frenzied stretch for planners.

That’s because President Donald Trump and his Republican party will soon be facing the opportunities — and the risks — that come with the potential expiration of many provisions of the Tax Cuts and Jobs Act of 2017. Politics, investment strategy, practice management and the many other topics covered in the slideshow below of Financial Planning’s top tax stories of 2024 will loom large next year as well.

However, nothing will pose as much complexity and uncertainty for planners and their clients as the possible sunset of many parts of the law. The massive impact to clients’ money in areas like the standard deduction, estate-tax exemptions and qualified business income, combined with a price tag of these provisions starting at $4.6 trillion, will likely leave everyone guessing on the ultimate outcome and exact terms until President Trump signs any bill into law next year.

“The fact that Republicans will control the House, Senate and White House next year positions them to advance budget reconciliation legislation that reflects their key tax priorities,” according to a primer on the tax questions facing the next administration and Congress by the Tax Policy Group in Deloitte Tax’s Washington National Tax Office. 

“Nonetheless, the built-in limitations of the budget reconciliation process plus the difficulties sometimes associated with holding together narrow majorities in both congressional chambers will require House and Senate leaders to tread carefully in putting together a tax package,” the report continued. “With these caveats in mind, it is critical for taxpayers to stay abreast of tax policy developments in Washington and to, as soon as possible, begin evaluating what is being put forward, modeling potential outcomes and planning the appropriate actions to take if and when these proposals go from high-level plans and talking points to fully framed legislation with substance, effective dates and, possibly, carve-outs and anti-abuse rules.”

But without knowing the specifics of any particular legislation and its effects on the provisions expiring a little over a year from now, following those steps may well prove easier said than done. After the bumpy path through the election, the last weeks of 2024 seem like a relaxing Sunday drive down a smooth road into 2025 in comparison.

“All of this sets up the prospect of a massive fiscal cliff for President-elect Trump and the incoming 119th Congress as they grapple with how to address the pending expiration of marquee TCJA provisions such as reduced income tax rates for individuals, increased exemption amounts for the individual alternative minimum tax and the estate and gift tax, the doubled child tax credit, the increased standard deduction and the 20% deduction for permanent passthrough business income,” the Deloitte report said.    

For a roundup of nearly five dozen tax-related stories from the past year on politics, practice management, investment strategies, health savings accounts, individual retirement accounts, estate planning, Social Security and more, scroll down the slideshow. To see last year’s list, click here.