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Why benefit increases from Social Security Fairness Act may take time

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More than 3.2 million individuals scored a legislative victory due to a new law that will increase the Social Security benefits for which they are eligible.

However, many of those individuals now face a lengthy wait for the extra benefit money coming to them.

The Social Security Fairness Act was signed into law on Jan. 5 by then President Joe Biden. The law eliminates certain provisions — the Windfall Elimination Provision and the Government Pension Offset — that previously reduced Social Security benefits for people who receive pensions from non-covered employment.

The changes will result in higher monthly payments ranging from $360 to $1,190, depending on their circumstances, the Congressional Budget Office has estimated. In addition, the law also provides lump-sum payments for those benefit increases dating back to benefits payable for January 2024 and after.

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The Social Security Administration is already helping some affected beneficiaries, the agency stated on its website. However, it cannot commit to a timeline as to when it will have processed the benefit increases for everyone affected.

“Under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits,” the Social Security Administration’s website states.

SSA will struggle without more money, expert says

On Feb. 5, a bipartisan group of Senators sent a letter to Acting Social Security Commissioner Michelle King urging for swift implementation of the benefit changes affecting certain teachers, police officers, firefighters and other public servants.

“We call for the immediate implementation of this legislation to provide prompt relief to the millions of Americans impacted by WEP and GPO,” the Senators wrote.

However, some experts say the agency needs more financial resources to make that happen.

“Congress either provides funding to cover the implementation costs, or SSA is going to struggle to work these cases,” said David A. Weaver, a former Social Security Administration executive who currently teaches statistics at the University of South Carolina.

The Social Security Fairness Act was voted into law with broad bipartisan support in both the House and Senate. Yet retirement policy experts have strongly criticized the new policy. One sticking point is the cost — estimated by the CBO to tally $200 billion over 10 years — with no offsets to help pay that increase.

That outlay will move Social Security’s trust fund depletion date six months closer, according to estimates.

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The Social Security Administration is funded through a continuing resolution set to expire in the middle of March.

“When Congress addresses that … it’d be useful for Congress to increase SSA’s budget to account for the implementation costs,” Weaver said.

At a minimum, the agency will need around $200 million to implement the Social Security Fairness Act’s changes, he said.

The last time there was a similar change was with the Senior Citizens Freedom to Work Act of 2000, in which Social Security beneficiaries who had reached full retirement age no longer saw benefit reductions due to earned income.

That law affected about 1 million beneficiaries and cost about $65 million to implement in today’s dollars, according to Weaver. The new Social Security Fairness Act will affect about three times as many beneficiaries, he said.

The Social Security Administration’s staffing is currently at a 50-year low, said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.

Prior to President Donald Trump taking office, it had been suggested that additional funding would help the Social Security Administration to fulfill the demands of the WEP and GPO repeal.

If instead the appropriations from Congress to the agency are reduced, the implementation of the new law may take even longer than one year, Adcock said.

Why new law may be complex to implement

As the Social Security Administration works to implement the law’s new benefit changes, the agency will face some pain points that may contribute to delays, according to Weaver.

When the Social Security Fairness Act was first introduced in 2023, the bill called for the changes to go into effect starting with benefits payable for January 2024.

As lawmakers rushed the legislation through in late December, that effective date was not changed. Calculating those back payments will create more work for the Social Security Administration, according to Weaver.

The effective date also presents other potential complications. For example, in any given year, 4% of Social Security beneficiaries die. Consequently, the Social Security Administration will be tasked with identifying more than 100,000 beneficiaries who are affected by the law who may have died in 2024 and distributing money to their survivors, Weaver said.

Moreover, individuals who were affected by the Government Pension Offset, which reduced Social Security benefits for spouses and widows of people who received non-covered pensions, may have previously been told they were not eligible for benefits, Weaver explained. As a result, in some cases they may have never applied for benefits. For those who did apply, their personal addresses or bank account information on file with the agency may be outdated, he added.

For those individuals affected by the GPO, the Social Security Administration will likely have to do a lot of work to find basic information on how to pay them, Weaver said.

For survivors and spouses who are newly eligible for benefits, the agency will also have to confirm those relationships.

The Social Security Administration may be able to automate 95% of the Windfall Elimination Provision cases, Weaver said. Yet some unusual cases may crop up, for example if a beneficiary was also affected by the earnings test. That will require manual input from Social Security employees, and therefore more time to process, Weaver said.

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Disability advocates sue Social Security and DOGE to stop service cuts

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A Social Security Administration (SSA) office in Washington, DC, March 26, 2025. 

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

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“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14. 

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

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Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person. 

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

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Amid trade turmoil, ‘you do not want to time the market’

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Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

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Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.

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How to file for a free tax extension if you can’t make April 15 deadline

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Galina Zhigalova | Moment | Getty Images

If you can’t file your taxes by the April 15 deadline, there’s a free, easy way to submit a federal tax extension online, experts say.  

Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.

As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.

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Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file. 

However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.

But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.

“It’s an extension to file, not an extension to pay.”

After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.

That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.

But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.

You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.

The ‘easiest way’ to file an extension

There are a few free options to file a tax extension.

For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.

The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.

IRS Direct Pay

Internal Revenue Service

Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.   

For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.

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