Chapter 7: Social Security Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

WHo is not covered by social security?

A

Family workers under 18

Members of clergy

Household workers (babysitters)

About 25% of state and local gov employees

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2
Q

Who is fully insured by Social Security?

A

You have 1 credit for every year since 21.

A minimum of 6 and max of 40

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3
Q

How do you calculate required credits for fully insured social security?

A

Take age and subtract 22. Must be a minimum of 6.

Ex: Someone age 32 needs 10 credits

Someone age 25 needs 6 credits

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4
Q

What are the benefits of a fully insured worker?

A
  • 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
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5
Q

Who is covered when a worker is currently insured?

A

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

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6
Q

Who qualifies fo disability social security benefits?

A

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

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7
Q

How are social secuity benefits calculated?

A
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8
Q

How much retirement benefits do you get from social security?

A

Worker gets 100% of PIA

Spouse gets 50% of PIA

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9
Q

When can you be a surviving spouse?

A

At age 60

Or if caring for a child under age 16

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10
Q

When do kids get survivor benefits?

A

UNtil age 18 or until 19 if in highschool

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11
Q

When do divorced spouses get benefits?

A

When they were married for at least 10 years.

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12
Q

How much is social security reduced when you have earned income?

A

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
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13
Q

How is social security taxed?

A

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
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14
Q

How do you calculate provisional income?

A

AGI

+ some tax exempt income (muni bonds but not roth)

+ half of social security

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15
Q

What happens if smoeone starts SS retirement benefits before FRA?

A

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

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16
Q

What happens if a worker starts their benefits after the FRA?

A

8/12% per month up to age 70

17
Q

How do you calculate a spouses retirement benefit?

A

If they start early—reduced by 25/36% times number of months early

18
Q

What doe the Governement Pension Offset do?

A
  • Reduce social security benefits if the spouses employer opted out of social security
19
Q

How much social security benefit does a spouse receive?

A

At their own FRA, the spouse will receive 50% of the workers PIA unless the spouses SS own benefit is higher

20
Q

How are SS benefits reduced if you start taking them in the year that you reach FRA?

A

They are reduced buy $1 for every $3 earned above the earnings cap until the first month in which you obtain your FRA.

21
Q

At what age can spousal retirement benefits be claimed? What about survivor retirement benefits?

A

Spousal retirement benefits can begin as early as age 62, assuming that the worker spouse has filed to collect his own benefit. Survivor retirement benefits are available at age 60 and even age 50 if the surviving spouse is at least age 50 and disabled.

22
Q
A
23
Q

What is the max family benefit?

A

Limit that a family can receive. Applies before any reduction for early retirement or any increase for late retirement.

Does not apply if both husband and wife receive a retirement benefit based on their own respective employment records.

The amount payable to a divorced spouse is also not included in the limitation unless the surving divorced spouse qualifeis for benefits on the basis of caring for a child of the worker.