Chapter 7: Social Security Flashcards
WHo is not covered by social security?
Family workers under 18
Members of clergy
Household workers (babysitters)
About 25% of state and local gov employees
Who is fully insured by Social Security?
You have 1 credit for every year since 21.
A minimum of 6 and max of 40
How do you calculate required credits for fully insured social security?
Take age and subtract 22. Must be a minimum of 6.
Ex: Someone age 32 needs 10 credits
Someone age 25 needs 6 credits
What are the benefits of a fully insured worker?
- Retirement benefits
- Spousal retirement benefits
- Surviving spouse benefit for widows over 60
- Surviging spouse beneffit if caring for a dependent under 16
- Depenedent benefits
- Dependent parent benefits (if over age 62)
- Lump sum $255 benefit
Who is covered when a worker is currently insured?
Currently insured workes are only elible for:
- Surviving spouse caring for depending child
- dependent benefit
- lump-sum death benefit of $255
Retirement benefits for the worker are not available when currently insured
Who qualifies fo disability social security benefits?
Severly disabled, mentally or physically, that they can’t work.
If you are between age 31-42, you need 20 credits
If you haven’t worked in the last 5 years, you don’t have the credits you need to get social security
How are social secuity benefits calculated?
How much retirement benefits do you get from social security?
Worker gets 100% of PIA
Spouse gets 50% of PIA
When can you be a surviving spouse?
At age 60
Or if caring for a child under age 16
When do kids get survivor benefits?
UNtil age 18 or until 19 if in highschool
When do divorced spouses get benefits?
When they were married for at least 10 years.
How much is social security reduced when you have earned income?
If you start social security before your FRA
- you can only earn $18,960 per year
- Benefits are reduced by $1 for every $2 in earnings
If you attain FRA in 2021
- Can earn $50k per year
How is social security taxed?
First measure provisional income then look at the threshholds.
Single thresholds:
- up to $25k provisional income, no ss tax
- up to $34k, 50% ss tax
- above $34k, 85% ss tax
Single thresholds:
- up to $32k provisional income, no ss tax
- up to $44k, 50% ss tax
- above $44k, 85% ss tax
How do you calculate provisional income?
AGI
+ some tax exempt income (muni bonds but not roth)
+ half of social security
What happens if smoeone starts SS retirement benefits before FRA?
Reduction is 20% for first 36 months prior to FRA date (5/9% x36)
Remaining months over 36 are taxed at 5/12% x number of months