Social Security

Question 1

how is Social Security funded?

Answer 1

from taxes collected on wages from employees and employers

Question 2

what does FICA stand for?

Answer 2

Federal Insurance Contributions Act

Question 3

what does SECA stand for?

Answer 3

Self-Employed Contributions Act

Question 4

what is the FICA tax breakdown?

Answer 4

6. 2% on wages up to the wage base of $142,800 (2021)
7. 45% on all wages
8. 9% Medicare surtax on wages and self-employment income over the thresholds

Question 5

what does OASDI stand for?

Answer 5

Old Age, Survivor, and Disability Insurance

Question 6

what are the categories of Social Security benefits?

Answer 6

• retirement benefits
• disability benefits
• death benefit
• survivors’ benefits
• medicare

Question 7

what is the breakdown of how Social Security retirement benefits are reduced if taken before full retirement age?

Answer 7

reduced by 5/9 of 1% for each month for the first 3 years that a worker retires early

reduced by 5/12 of 1% for each month beyond 3 years that a worker retires early

Question 8

what does “fully insured” mean?

Answer 8

fully insured means a worker must earn 40 quarters of coverage

Question 9

how does a worker earn a quarter of coverage?

Answer 9

based on dollar amount of earnings

1 quarter = $1,470 in wages subject to Social Security

Question 10

what is the breakdown of how Social Security retirement benefits are increased if taken after full retirement age?

Answer 10

increase of 8% per year until age 70

Question 11

what people are eligible for Social Security retirement benefits?

Answer 11

• a disabled insured worker under age 65
• a retired insured worker age 62 or older
• a spouse of a retired or disabled worker who is at least 62, OR is caring for a child under age 16 or a disabled child
• a divorced spouse of a retired or disabled worker, if the ex-spouse is age 62 and was married to the worker for at least 10 years and did not remarry by age 60

Question 12

what is a spouse eligible for Social Security benefits?

Answer 12

the spouse of a retired or disabled worker who is:

• at least age 62, OR
• is caring for a child under age 16 or a disabled child

Question 13

when is an ex-spouse eligible for Social Security benefits?

Answer 13

the ex-spouse of a retired or disabled worker who is:

• at least age 62, and
• was married to the worker for at least 10 years, and
• did not remarry by age 60

Question 14

how are Social Security retirement benefits reduced if the retiree earns too much?

Answer 14

for early retirement: benefit is reduced $1 for every $2 above the earnings threshold ($18,960/year) for persons below full retirement age

for full retirement age: benefit is reduced $1 for every $3 above the earnings threshold ($50,250/year)

Question 15

what is the max amount of Social Security benefits that may be taxed?

Answer 15

85%

Question 16

what income makes up the thresholds for Social Security benefit taxation?

Answer 16

• AGI
• nontaxable interest
• foreign earned income
• 1/2 of retirement benefit

Question 17

disability definition for Social Security Disability

Answer 17

there is severe physical or mental impairment for 5 months that is expected to prevent the worker from performing substantial work for at least one year or result in death

Question 18

when is a worker considered to be covered for disability benefits?

Answer 18

for ages 31+: the worker is fully insured and earned 20 quarters in the last 40 quarters

for age 24-30: the worker has earned 1/2 of quarters available since age 21 to disability

for ages 21-24: the worker has earned 6 quarters in the last 12 quarters

Question 19

who is eligible for Social Security survivor benefits?

Answer 19

• a worker that is fully insured or currently insured (at least 6 quarters of coverage in the last 13 quarters)
• a child under age 18 (under 19 if in high school), or disabled prior to age 22
• a spouse with a child under age 16
• spouse of a fully insured worker (no coverage for a spouse of a currently insured worker)

Question 20

what is Medicare?

Answer 20

Federal health insurance for people aged 65 and older

Question 21

when can a spouse qualify for Medicare?

Answer 21

at age 65 based on the other spouse’s work record

Question 22

how many parts are there to Medicare?

Answer 22

3 parts (A, B, and D)

Question 23

what is Medicare Part A?

Answer 23

hospital insurance (covers places)

Question 24

what is covered in Medicare Part A?

Answer 24

• inpatient hospital care and home health care
• semi-private rooms, meals, operating and recovery rooms, lab tests, x-rays
• hospice coverage
• skilled nursing care facility FOLLOWING a covered hospital stay

Question 25

what is the deductible per benefit period for Medicare Part A?

Answer 25

$1,484 per benefit period

Question 26

what are the coinsurance amounts for Medicare Part A?

Answer 26

days 1-60: deductible days 61-90: $371 per day days 91-150: $742 for each lifetime reserve day days 21-100 for skilled nursing care: $185.50 per day (first 20 days are 100% covered)

Question 27

what does Medicare Part B cover?

Answer 27

- doctor visits, lab tests, ambulance, outpatient therapy, clinical research, durable medical equipment, mental health, getting a second opinion before surgery, home health care - initial preventative visit - annual wellness visit

Question 28

what does Medicare Part B NOT COVER?

Answer 28

- dental care, dentures - cosmetic surgery - hearing aids - eye exams

Question 29

what is the standard premium for Medicare Part B?

Answer 29

$148.50 per month

Question 30

what is the deductible for Medicare Part B?

Answer 30

$203 per year

Question 31

what is the coinsurance for Medicare Part B?

Answer 31

Part B covers 80% after the deductible is met, with no stop-loss limit

Question 32

what does Medicare Part D cover?

Answer 32

prescription drugs

Question 33

what is Medicare Supplemental Insurance?

Answer 33

sold by private insurance companies and is designed to offset costs associated with Medicare deductibles and coinsurance

Question 34

when is an individual enrolled in Medicare?

Answer 34

automatically enrolled if receiving Social Security at age 65 must enroll if not received Social Security at 65

Question 35

what are the 3 exceptions to the rule of Medicare coverage outside of the US?

Answer 35

1. you're in the US when you have a medical emergency and the foreign hospital is closer than the nearest US hospital 2. you're traveling through Canada on the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closest 3. you live in the US and the foreign hospital is closest to your home, regardless of whether it is an emergency or not