Social Security

Question 1

How is social security funded?

Answer 1

• socially security benefits are paid from taxes on wages from employees and employers.
• From FICA (Federal Insurance Contributions Act) and SECA (Self Employed Contributions Act) taxes paid by the employee and employer
• 6.2% on wages up to the wage base of $147,000 in 2022, employee and employer
• 1.45 % Medicare Tax on all wages, payed by employee and employer
• also a Medicare surge tax on wages and self employment income over a threshold, payed by employee

Question 2

Medicare Surtax

Answer 2

.90% Medicare surtax on wages and self employment income over thresholds in photo

Question 3

OASDI

Answer 3

Old Age, survivor, and disability insurance.

Common name for social security insurance

Question 4

Whose covered by OASDI?

Answer 4

-federal employees hired since 1984

• us armed forces,
• self employed persons
• employees of nonprofit organizations
• hospital interns
• domestic workers
• farmer and agricultural workers.

Question 5

Whose not covered by OASDI

Answer 5

-Federal employees hired prior to 1984
-Railroad employees
-family employment*
-ministers
-members of religious orders
-student nurses
-newspaper delivery persons under age 18
-students working for a
college or club.

• Family employment rules disallow:
• a child under 18 hired by a parent (not corporation)
• A child 18-24 employed for work that is not in the parent’s trade or business (ie. cleaning the office),
• a spouse employed for work that is not in the spouse’s trade or business
• a parent employed for work that is not in the child’s trade or business.

Question 6

Categories of Social Security Benefits

Answer 6

• retirement benefit
• disability Benefit
• Death Benefit
• Survivors Benefit
• Medicare

Question 7

Reduced Benefit for Early Retirement at Age 62

Answer 7

• If full retirement is age 65 then age 62 is 80% of full retirement benefits.
• If full retirement is age 66 then age 62 is 75% of full retirement benefits.

If full retirement is age 67 then age 62 is 70% of full retirement benefits.

Benefits are reduced by 5/9 of 1% for each month, for the first three years that a worker retires early.

Benefits are then reduced by 5/12 of 1% for each month beyond three years.

shortcut: 6.66% reduction for each year for the first 3 years. Additional 5% reduction for each year after that.

Question 8

What is needed to qualify for SSN Retirement Benefits?

Answer 8

• to qualify for retirement benefits a worker must be “fully insured”
• fully insured means a worker must earn 40 quarters of coverage.

In 2022:

1 quarter = $1510 in wages subject to SSN

Question 9

Delaying retirement benefits

Answer 9

• retire gain an additional increase in monthly benefits by delaying each month after reaching their FRA until age 70
• retirees benefit may increase by 8% (simple interest) each year the retiree delays their benefit

Question 10

Benefit Reduction - Early retirement age

Answer 10

• benefits can be temporarily reduced if you earn too much

The benefit is reduced $1 for every $2 above the earnings threshold for persons below full retirement
age.

Threshold: $19,560 (Annual limit, monthly test).

Question 11

Benefit Reduction - Full Retirement Age

Answer 11

-the year in which you reach the age of retirement the benefit is reduced $1 for every $3 above the
earnings threshold.

Threshold: $51,960 (Annual limit, monthly test).

Earnings based reductions end at full retirement age.

https://www.ssa.gov/benefits/retirement/planner/whileworking.html#:~:text=If%20you%20are%20younger%20than,2022%2C%20that%20limit%20is%20%2419%2C560.

Question 12

How is SSN Benefit Taxed?

Answer 12

Up to 50% of Social Security income is taxable for individuals with a total gross income including Social Security of at least $25,000 or couples filing jointly with a combined gross income of at least $32,000.

Up to 85% of Social Security benefits are taxable for an individual with a combined gross income of at least $34,000 or a couple filing jointly with a combined gross income of at least $44,000.

Question 13

Social Security: Disability Benefit

Answer 13

• 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 for ANY OCCUPATION
• Benefits would begin in the 6th month following the 5 month waiting period.
• How much of a benefit is paid depends on credits earned and the age of the worker when disabled.

Question 14

Survivorship Eligibility

Answer 14

• A worker must be either fully insured (40 quarters)
  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 (aka secondary school), or disabled prior to age 22, is entitled to survivorship benefits wether a worker was currently or fully insured

Spouse with a child under age 16 is entitled to survivorship benefits, wether worker was currently or fully insured.

No coverage for spouse of a currently insured worker

Coverage for spouse of a fully insured worker.

Question 15

Medicare benefits

Answer 15

• federal health insurance for people 65 and older
• spouses can qualify at age 65 based on the other spouses work record
• three parts Medicare A, B, D
• eligible people are automatically enrolled if at least receiving retirement benefits or any age if receiving social security disability benefits for at least two years.

Question 16

What is Medicare Part - A?

Answer 16

• Hospital insurance (covers places)

inpatient hospital care and home health care.

Semi-private room, meals, operating and recovery room, lab tests, X-rays.

Hospice Coverage.

Skilled nursing care facility following a covered hospital stay

Question 17

Medicare Part A - Benefit Periods

Answer 17

Benefit periods are important because they determine the amount paid by the insured:

A benefit period begins on the first day the insured is in the hospital and ends after 60 days of no further
skilled care.

The deductible is $1,556 per benefit period.

The first 60 days is just the deductible.
Beyond the 60th day, the following coinsurance amounts will apply:

$389 for days 61-90, per day.

$778 for days 91-150 for each lifetime reserve day. There are only a total of 60 lifetime reserve
days.

$194.50 per day for skilled nursing care days 21-100. The first 20 days following a hospital stay are
covered 100%.

Custodial care services are NOT provided, including nursing care facilities that provide assistance
with activities of daily living.

Question 18

Medicare Part B

Answer 18

- Part B provides coverage for doctor visits, lab tests, ambulance, outpatient therapy, clinical research, durable
medical equipment (wheel chairs, hospital beds, walkers, oxygen), mental health (inpatient, outpatient, partial hospitalization), getting a second opinion before surgery, and home health care.

• Medicare covers an initial preventative visit and annual wellness visit.
• insured is auto enrolled unless they opt out.
• standard premium is $170 a month, premiums are deducted from social security. 
• higher premiums for individuals over thresholds
• deductible is $233 per year
• after deductible part be covers 80%, no limit

Question 19

What is NOT covered by Medicare part B?

Answer 19

• dental care, Dentures
• Cosmetic Surgery
• Hearing AIDS
• eye exam

Question 20

Medicare Part C - Medicare Advantage

Answer 20

• Must own and pay for Part A and Part B.
• Coverage similar to an HMO, PPO or POS plan.
• Coverage is regional. Emergency care will be provided outside coverage area.
• Coverage includes vision, dental, hearing.

Question 21

Medicare Part D

Answer 21

• provides prescription drug coverage benefits

- wide variation across plans. Most require a premium and have deductibles and co-pays

Question 22

Medicare supplemental insurance

Answer 22

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

Question 23

Applying for Medicare

Answer 23

• if an insured is receiving social security at 65 then he is automatically enrolled in Medicare.
• if an insured is not receiving social security at 65 then he must enroll.

Question 24

Social security payout schedule

Answer 24

Question 25

What definition of disability does social security use?

Answer 25

Any occupation

Question 26

When can a divorced spouse collect benefits?

Answer 26

- Worker Must be covered - has to be age 60 - Married to worker for at least 10 years - did not remarry before age 60

Question 27

What can Depednent parents collect?

Answer 27

- they can collect survivorship benefits if their kid was fully insured. - they must be age 62 or older upon the passing of their child.