CFP -Social Security Flashcards
Social Security are paid on how much wages?
6.2% on wages up to the base of $160,200 in 2023
1.45% on all wages
0.9% Medicare surtax on thresholds
MFJ over $250,000
MFS over $125,000
Single over $200,000
What does OASDI stand for?
Old Age, Survivor, Disability Insurance
synonymous for Social Security
Covered Federal employees?
Those hired since 1984
Categories of SS Benefits
Retirement
Disability
Death
Survivors’
Medicare
Normal retirement ages
If born before 1938 - 65
1938 - 1942 - add 2 months per year
1943 - 54 - 66
1955-1959 - add 2 months per year
1960+ - 67 years
Reduced benefit at age 62 if full retirement 65 is
80% of full retirement
Reduced benefit at age 62 if full retirement 66 is
75% of full retirement
Reduced benefit at age 62 if full retirement 67 is
70% of full retirement
General early retirement rule
Benefits are reduced by 5/9 of 1% for each month, for the first 3 years that a worker retires early
Benefits are reduced by 5/12 of 1% for each month beyond 3 years
How many quarters to qualify for SS?
40 quarters of coverage
1 quarter = $1,640 in wages subject to social security
Retiree’s benefit may increase by __% (simple interest) each year the retiree delays their benefit
Retiree’s benefit may increase by 8% (simple interest) each year the retiree delays their benefit
Imporant SS Beneficiaries
-A disabled insured worker under age 65
-A retired insured worker age 62 or older
-Spouse of a retired disabled worker who is at least 62 OR is caring for a child under age 16 or disabled child
-A divorced spouse of a retired or disabled worker, if the ex-spouse age 62 and was married to the worker for at least 10 years AND did not remarry by age 60
Benefit reduction threshold for earning too muchif you retired early
$21,240
Benefit reduction threshold for earning too much if you are at full retirement age:
$56,520
Taxation of SS Benefit
Up to 85%
MFJ 32,000/44,000
Single 25000/34000
SS Definition of Disability
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. Benefits begin in the 6th month.
Survivorship eligibility
A worker must be either fully insured (40 quarters)
OR
Currently insured (6 Qs in the last 13 Qs)
Survivorship eligibility for the spouse of someone who was “currently insured”
NO
Survivorship eligibility for the spouse of someone who was “fully insured”
YES, when the survivor reaches age 60
One time lump sum payment of ____ to the beneficiary of a deceased covered worker
One time lump sum payment of $255 to the beneficiary of a deceased covered worker
Survivorship: Who is ALWAYS covered?
Children under 18 (under 19 if in secondary school)
AND
Caretakers of children under 16
MEDICARE is for
Federal health insurance for people 65+
Automatically enrolled if receiving retirement benefits
Also for persons receiving SS disability for at least 2 years
Medicare Part A
-Hospital Insurance / Hospice
-Skilled nursing following a covered hospital stay
Medicare Part A Benefit period begins on
the 1st day the insured is in the hospital and ends after 60 days of no further skilled care
Medicare Part A deductible
$1600 / benefit period
1st 60 days is just the deductible
Beyond 60 days, coinsurance applies
Medicare Part B
Doctor visits
Lab tests
Ambulance
Outpatient therapy
Clinical Research
Medical equipment
Home health care
Annual wellness/preventative
NO dental, hearing, eye
Medicare Part B premium per month
$164.90/mo, deducted from Social Security
deductible is $226/yr
After deductible, 80% covered. No stop loss limit.
UNLESS OPT OUT
Medicare Part C
Similar to HMO, PPO
Regional coverage
Extended emergency
Includes vision/dental/hearing
Medicare Part D
Provides prescription drug coverage benefits
Wide variation across plans
Medicare Supplemental
Sold by private insurance companies.
Designed to offset cost associated with Medicare deductibles and coinsurance.
Does Medicare provide coverage outside the US?
No EXCEPT:
US medical emergency and foreign hospital is closer than nearest US
At what age do you automatically qualify for Medicare?
65
Medicare Part A is paid for by
a portion of Social Security taxes collected
Medicare Part B is paid for by
Premiums charged to individual
Reduces SS benefits
