Social Security

Question 1

Social security benefits

Answer 1

social insurance programs covered by social security act
- social security (OASDI)
- medicare
- federal unemployment insurance
- supplemental security income (SSI)

Question 2

Fully insured

Answer 2

• has 40 quarters of coverage
• social security credit (fica taxed earned income amount) (no more than 4 credits/ yr)
• 40 quarters or credits = fully insured for life
• eligible for both survivor and retirement benefits

Question 3

Currently insured

Answer 3

• 6 quarters of coverage
• only eligible for
  1. lump sum DB ($255) for spouse or dependent
  2. surviving spouse benefits (if children under 16)
  3. dependent benefit
• probably no questions on this

Question 4

Participating in social security

Answer 4

• nearly everyone covered under OASDI
  not covered:
• federal employees employed before 1984
• americans working abroad
• student nurses
• railroad employees
• under 18 working for parent
• ministers, religions, christian science if claiming exemption
• trial counsel members
• some state employee and teachers

Question 5

Railroad employees

Answer 5

• excluded from SSA
• have separate retirement system by railroad retirement board
• eligible for medicare

Question 6

Worker benefits

Answer 6

• retired fully insured worker age 62 or over is entitled to benefits
• worker is entitled to disability benefits if under 65 and disabled for 12 months, expected to be disabled for 12 months, or disability is expected to result in death and has completed 5 mo waiting period

Question 7

Spouse benefits

Answer 7

spouse of retired or disabled worker qualifies for payments if they meet any of the following
- 62 y/o or over
- at any age of spouse
1. has child in care under 16
2. has child 16 + and disabled before 22

Question 8

Surviving spouse

Answer 8

• qualifies for SS payments if widower is 60 or over
• including surviving divorced spouse ( must have been married at least 10 yrs and not remarried)
• divorced spouse at least 62 and divorced for at least 2 yrs can receive benefits based on workers earnings
• surviving spouse regardless of age is entitled to benefits if child is under 16 or became disabled by 22

Question 9

Dependent benefits

Answer 9

• surviving dependent, unmarried child of deceased, disabled or retired insured worker, qualifies for SSA if dependent is
  1. under 19 and full time elementary or secondary school student
  2. age 18 or over but disability beginning before age 22

Question 10

Lump sum death benefit

Answer 10

• spouse living in same household as deceased at time of death or a dependent child (not both) is eligible for a one time lump sum benefit
• $255

Question 11

Social security benefits calculation

Answer 11

• primary insurance amount (PIA) is the basic unit to determine the amount of each monthly benefit payable
• spouse/ divorced may be entitled to PIA of 50% or more of workers PIA (unless own benefit greater)

Question 12

Full retirement age (FRA)

Answer 12

• age you must reach to be eligible to receive full benefits
• those electing to receive benefits before FRA will receive a reduced benefit
• can start as early as 62 but its before FRA so benefits are reduced

Question 13

Taking SSA before full retirement age

Answer 13

• first determine PIA
• then reduce PIA by 5/9 of 1% or 1/80 for each 36 months that the worker is under FRA

Reduced benefits = PIA - [(# of months before FRA / 180) * PIA]

Question 14

Working after retirement

Answer 14

• if you take benefits and continue to earn income before FRA then you can lose those benefits if your workplace earnings exceed a threshold
• workers who attained FRA may keep all benefits no matter how much is earned
• workers younger than FRA have limit to how much the worker can earn and still receive SSA
• younger than FRA in 2023 $1 deducted from benefits for each $2 earned above $21,240
• reach FRA during 2023, $1 deducted from benefits for each $3 of earned income above $56,520 until month FRA is reached

Question 15

Taxation of benefits

Answer 15

• if persons income plus half of SSA is more than $25k (S) or $32k (MFJ) base amount, up to 50% of benefits will be included in income
• if persons income plus half of SSA is more than $34k (S) or $44k (MFJ) base amount, up to 85% of benefits will be included in income
• muni bond interest counts as income
• income is AGI + tax exempt interest and 1/2 SSA
• if you take benefits then you may have to pay income tax on those benefits if your provisional income exceeds a threshold

Question 16

Social security disability benefits

Answer 16

entitled to disability benefits is meet all
1. insured for disability under 65
2. been disabled for 12 month, expected to be disabled for 12 months, expected to die
3. completed 5 mo waiting period

Question 17

File and suspend repealed

Answer 17

• worker could apply for benefits then suspend them choosing spousal benefits instead
• would then delay claiming own benefits until FRA or 70

Question 18

Withdrawing a social security application

Answer 18

• worker may not file for one type of benefits then change to another
• fully insured worker has one time right to withdraw the application for benefits within 12 months of the initial claim
• benefits received must be repaid (no interest)