New Social Security Rules Could Boost Retirement Income for Public Sector Workers

For years, many public employees — teachers, police officers, and government workers — faced an unfair penalty when it came to Social Security. If you earned a public pension and also spent time working in the private sector, your Social Security benefit could be reduced by as much as two-thirds.

That penalty is finally changing — and it could mean hundreds or even thousands of extra dollars per month in retirement income for some retirees and their spouses.

Whether you’ve worked in both public and private roles or you’re married to someone who has, these changes are worth understanding. They could impact your household retirement income in a big way.

Understanding the Old Rules and the Penalty That’s Going Away

Here’s how it used to work:
If you worked in a public job (for example, with a state or federal agency) that provided a pension but didn’t pay into Social Security, and later worked in the private sector long enough to qualify for Social Security (40 quarters or 10 years), your benefit was still reduced — sometimes drastically.

For example:

Public Pension	Social Security Benefit Before Reduction	Reduction (2/3 Pension)	Final SS Benefit
$3,000/month	$1,800/month	-$2,000	$0

Unless you had nearly 30 years of private-sector earnings that counted toward Social Security, the system essentially wiped out your benefit.

This penalty was part of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) — two rules that many retirees saw as punishing those who devoted careers to public service.

You Can Now Receive Both Benefits in Full

Under the new rules, retirees can now receive their full Social Security benefit in addition to their public pension.

That means if you qualify for both, you could see a significant increase in your monthly retirement income — in some cases, several hundred to over a thousand dollars per month.

And it gets better:
Even if you never paid into Social Security yourself (for instance, you worked exclusively in the public sector), you may now be eligible to collect up to half of your spouse’s Social Security benefit.

Example:

• Your public pension: $3,000/month
• Your spouse’s Social Security: $2,000/month
• You may now collect an additional $1,000/month (half of your spouse’s benefit)

That’s $12,000 a year in extra income — just by knowing your eligibility and taking action.

What You Need to Do to Claim the Benefit

This isn’t likely to happen automatically. You’ll need to contact your local Social Security office to review your eligibility.

Here’s what to prepare before you go:

• Your public pension award letter
• Your spouse’s Social Security benefit statement (if applicable)
• Employment history showing private-sector work (if relevant)

Be polite but persistent — not every SSA representative may be fully familiar with the recent updates.

If you’re not sure how this applies to you, we can help you review your pension and Social Security options together to make sure nothing falls through the cracks.

What We Can Learn From Crypto Volatility

Now, let’s shift gears briefly. October was a rough month for cryptocurrency investors — many saw steep declines across popular coins like Solana and Bitcoin.

Here’s the takeaway: volatility teaches discipline.

While crypto can be fun to follow and even to dabble in for learning purposes, it’s not a core retirement asset for most investors — especially retirees or those nearing retirement. I keep a small amount myself just to stay familiar with the market, but for long-term financial security, consistency beats excitement every time.

When markets swing wildly — whether it’s crypto or stocks — that’s often when the best buying opportunities appear. But the key is to take those opportunities only within a disciplined, diversified plan.

If you’re curious about how alternative investments fit into your broader portfolio:

Year-End Financial Planning Checklist

As we near the end of the year, it’s time to make sure your tax and retirement strategies are on track. Here are a few smart moves to consider before December 31:

1. Maximize 401(k) and IRA Contributions

If you haven’t hit your contribution limits yet, consider increasing your contributions before year-end. Those extra dollars can reduce taxable income and boost your retirement savings.

2. Evaluate a Roth Conversion

If your income is lower this year, a Roth conversion could make sense — allowing future growth and withdrawals to be tax-free. (There are no more “Roth reversals,” so plan carefully.)

3. Review Tax-Loss Harvesting Opportunities

If some of your investments are down, you may be able to sell them to offset gains elsewhere. This can reduce your overall tax bill.

4. Check Healthcare Coverage

Open Enrollment for healthcare and Medicare Advantage runs through the fall. Don’t miss the chance to make sure your coverage fits your needs for 2026.

5. Review Your Tax Situation

Don’t wait until April. Run a projection now so there are no surprises — and still time to adjust.

Take Advantage of These Changes Before You Miss Out

The new Social Security rule changes are a major win for public retirees and their families — but the benefits won’t find you automatically. Whether you qualify for extra Social Security income or need to fine-tune your tax strategy before year-end, taking action now can make a lasting difference.

At Great Lakes Financial Planning, we help clients integrate their pensions, Social Security, and investments into one coordinated plan — so every dollar works together.