CH 19 - Social Security

Question 1

What workers are NOT covered by Social Security? (4)

Answer 1

• Fed employees (pre-1984)
• ministers who elect out
• state and local who elect out
• American citizens who work abroad for foreign affiliates of U.S. employers

Question 2

A person is considered FULLY insured if they have _____ quarters of coverage. A person is currently insured for death benefits only if they have _____ quarters of coverage.

Answer 2

A). 40

B). 6 out of 13

Question 3

There is one quarter of coverage for $_______ in earnings.

Answer 3

$1,300

Question 4

What is the average indexed monthly earnings(AIME) based on?

Answer 4

Highest 35 years of your wage history and is indexed for inflation up to age 60.

Question 5

Average indexed monthly earnings (AIME) is capped at…

Answer 5

the taxable wage base.

Question 6

Which of the following provide higher benefits for lower wages due to compensation being capped at the taxable wage base?

A). AIME

B). PIA

Answer 6

PIA

Question 7

Who gets Social Security retirement benefits? (6)

Answer 7

1. worker age 62
2. spouse age 62
3. spouse any age with under 16 children
4. dependents under 18 children
5. unmarried divorced spouse of 10 years
6. family maximum may apply if 3 or more benefits

Question 8

provisional income formula

Answer 8

AGI + (tax exempt interest) + ( half of Social Security benefit )

Question 9

How are Social Security benefits taxed?

A). single

B). married

Answer 9

single = $25K (50%) and $34K (85%)

married = $32K (50%) and $44K (85%)

Question 10

What is the impact of taking Social Security benefits prior to full retirement age?

Answer 10

5/9 of 1% for each of the first 36 months

5/12 of 1% for each next 24 months

Question 11

What is Social Security delayed retirement?

Answer 11

those born in 1943 or later gets is an 8% increase until age 70

Question 12

Benefits are reduced $___ for every $___ over the threshold AFTER full retirement age.

Benefits are reduced $___ for every $___ over the threshold THE YEAR OF full retirement age.

Answer 12

A). $1 / $2

B). $1 / $3

Question 13

The earnings test reduces benefits for Social Security beneficiaries under FULL retirement age if wages from employment exceed $_______.

Answer 13

$16,920

Question 14

There are special rules for the calendar year for which an individual attains FULL retirement age. You only count the ___________ attaining full retirement age for the earnings test.

Answer 14

months before

Question 15

Social Security retirement benefits are increased as the ________ increases.

Answer 15

consumer price index (CPI)

Question 16

What is the taxable wage base for 2017 is…

Answer 16

$127,200.