CFP -Social Security

Question 1

Social Security are paid on how much wages?

Answer 1

6.2% on wages up to the base of $160,200 in 2023
1.45% on all wages

Question 2

0.9% Medicare surtax on thresholds

Answer 2

MFJ over $250,000

MFS over $125,000

Single over $200,000

Question 3

What does OASDI stand for?

Answer 3

Old Age, Survivor, Disability Insurance

synonymous for Social Security

Question 4

Covered Federal employees?

Answer 4

Those hired since 1984

Question 5

Categories of SS Benefits

Answer 5

Retirement

Disability

Death

Survivors’

Medicare

Question 6

Normal retirement ages

Answer 6

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

Question 7

Reduced benefit at age 62 if full retirement 65 is

Answer 7

80% of full retirement

Question 8

Reduced benefit at age 62 if full retirement 66 is

Answer 8

75% of full retirement

Question 9

Reduced benefit at age 62 if full retirement 67 is

Answer 9

70% of full retirement

Question 10

General early retirement rule

Answer 10

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

Question 11

How many quarters to qualify for SS?

Answer 11

40 quarters of coverage

1 quarter = $1,640 in wages subject to social security

Question 12

Retiree’s benefit may increase by __% (simple interest) each year the retiree delays their benefit

Answer 12

Retiree’s benefit may increase by 8% (simple interest) each year the retiree delays their benefit

Question 13

Imporant SS Beneficiaries

Answer 13

-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

Question 14

Benefit reduction threshold for earning too muchif you retired early

Answer 14

$21,240

Question 15

Benefit reduction threshold for earning too much if you are at full retirement age:

Answer 15

$56,520

Question 16

Taxation of SS Benefit

Answer 16

Up to 85%

MFJ 32,000/44,000
Single 25000/34000

Question 17

SS Definition of Disability

Answer 17

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.

Question 18

Survivorship eligibility

Answer 18

A worker must be either fully insured (40 quarters)

OR

Currently insured (6 Qs in the last 13 Qs)

Question 19

Survivorship eligibility for the spouse of someone who was “currently insured”

Answer 19

NO

Question 20

Survivorship eligibility for the spouse of someone who was “fully insured”

Answer 20

YES, when the survivor reaches age 60

Question 21

One time lump sum payment of ____ to the beneficiary of a deceased covered worker

Answer 21

One time lump sum payment of $255 to the beneficiary of a deceased covered worker

Question 22

Survivorship: Who is ALWAYS covered?

Answer 22

Children under 18 (under 19 if in secondary school)
AND
Caretakers of children under 16

Question 23

MEDICARE is for

Answer 23

Federal health insurance for people 65+

Automatically enrolled if receiving retirement benefits

Also for persons receiving SS disability for at least 2 years

Question 24

Medicare Part A

Answer 24

-Hospital Insurance / Hospice
-Skilled nursing following a covered hospital stay

Question 25

Medicare Part A Benefit period begins on

Answer 25

the 1st day the insured is in the hospital and ends after 60 days of no further skilled care

Question 26

Medicare Part A deductible

Answer 26

$1600 / benefit period

1st 60 days is just the deductible

Beyond 60 days, coinsurance applies

Question 27

Medicare Part B

Answer 27

Doctor visits
Lab tests
Ambulance
Outpatient therapy
Clinical Research
Medical equipment
Home health care
Annual wellness/preventative

NO dental, hearing, eye

Question 28

Medicare Part B premium per month

Answer 28

$164.90/mo, deducted from Social Security

deductible is $226/yr

After deductible, 80% covered. No stop loss limit.

UNLESS OPT OUT

Question 29

Medicare Part C

Answer 29

Similar to HMO, PPO

Regional coverage

Extended emergency

Includes vision/dental/hearing

Question 30

Medicare Part D

Answer 30

Provides prescription drug coverage benefits

Wide variation across plans

Question 31

Medicare Supplemental

Answer 31

Sold by private insurance companies.

Designed to offset cost associated with Medicare deductibles and coinsurance.

Question 32

Does Medicare provide coverage outside the US?

Answer 32

No EXCEPT:

US medical emergency and foreign hospital is closer than nearest US

Question 33

At what age do you automatically qualify for Medicare?

Answer 33

65

Question 34

Medicare Part A is paid for by

Answer 34

a portion of Social Security taxes collected

Question 35

Medicare Part B is paid for by

Answer 35

Premiums charged to individual

Reduces SS benefits