How the Repeal of the Windfall Elimination Provision Could Affect Your Social Security

The Windfall Elimination Provision (WEP) was designed to prevent public sector employees—like teachers and firefighters—from receiving disproportionately high Social Security benefits due to working in jobs where they received a pension but did not pay into Social Security.

However, in 2025, the provision was repealed, resulting in some workers receiving a big boost in benefits.

Here’s how the provision worked and how to adjust your retirement planning strategy based on the change.

How WEP Worked

The Windfall Elimination Provision (WEP) was created to adjust how Social Security benefits were calculated for individuals who had both Social Security-covered and non-covered employment.

Normally, the Social Security Administration (SSA) uses a progressive formula based on workers’ average indexed monthly earnings (AIME), applying higher percentages to lower portions of income to favor lower earners.

“It was created to correct an imbalance in the benefit formula,” said Remy Dou, CFP and co-founder of Retirement Planning Center Advisory Group.

“Without WEP, workers who spent part of their careers in non-covered employment could appear to have been low-income earners when, in reality, they weren’t contributing to Social Security during those years. As a result, they could qualify for disproportionately high Social Security benefits.”

By applying three different percentages to an individual’s AIME and adding the results, the SSA could determine the individual’s monthly benefit, or primary insurance amount (PIA), at full retirement age.

In 2024, this formula applied 90% to the first $1,174 of AIME, 32% to earnings between $1,174 and $7,078, and 15% to earnings above $7,078.

For example, say someone worked for 20 years in a Social Security-covered job and 15 years in a public school job that didn’t pay into Social Security but offered a pension.

Normally, their Social Security benefit would include 90% of the first $1,174 in average monthly earnings.

Because they had fewer than 30 years of covered work, WEP reduced that 90% to as low as 40%, lowering their Social Security benefit to account for their pension from non-covered employment.

The Repeal of WEP

On Jan. 5, 2025, former President Joe Biden signed the Social Security Fairness Act into law, effectively repealing WEP as well as the Government Pension Offset (GPO).

As a result, public sector employees and others affected by these provisions will now receive their full, earned Social Security benefits without reductions.

“For many retirees, the repeal could mean a few hundred dollars more each month, which adds up significantly over time. It levels the playing field for people who split their careers between covered and non-covered work,” Dou stated.

The Social Security administration began implementing these changes in February 2025, with retroactive payments covering benefits from January 2024, and new monthly benefit amounts starting in April 2025.

How WEP’s Repeal Impacts Retirement Planning

With the repeal of WEP, you no longer need to plan around benefit reductions. But you may want to take another look at your retirement planning if you are eligible to receive retroactive payments in addition to an increased monthly benefit.

Diversify Your Retirement Income

While the repeal boosts Social Security benefits, building income streams beyond Social Security remains necessary. IRAs, 401(k)s, pensions, and annuities can provide financial flexibility and security, especially during market shifts or periods of inflation.

Re-Evaluate When You Claim Social Security

“You may also want to reassess when to claim benefits, especially if you were delaying due to WEP,” Dou recommended.

This is especially true if you delayed claiming benefits to offset the reduced payments that resulted from WEP.

Delaying benefits can still offer higher payments through delayed retirement credits, which get you an annual increase of up to 8%. However, this increase in benefits without WEP might make claiming earlier more appealing.

“For many people, delaying benefits can still be advantageous, especially if you expect to live into your 80s or beyond. On the other hand, if you have a shorter life expectancy or need income earlier, it might make sense to claim sooner,” said Dou.

Update Your Strategy With a Financial Planner

Even without WEP, retirement planning involves complex decisions concerning taxes, investment withdrawals, healthcare, and estate planning. A financial professional can help you revise your retirement strategy now that your Social Security benefits are fully restored.

“Consider meeting with a financial planner to adjust your long-term retirement income plan now that the WEP is no longer a factor,” Dou suggested.

The Bottom Line

With full Social Security benefits restored, those impacted by WEP can expect greater financial stability in retirement.

Individuals may want to reassess their retirement strategy to account for the retroactive payments and increased monthly benefits.