F.45 Social Security and Medicare planning Flashcards
Learners will develop proficiency in understanding Social Security and Medicare planning principles to effectively advise clients on optimizing retirement benefits and healthcare coverage.
Mary, a diligent financial planner, is advising her client, John, who is approaching retirement age. John is curious about the eligibility criteria for Social Security retirement benefits. Mary wants to ensure that John understands the key requirements.
Which of the following is not a requirement for a person to be eligible for Social Security retirement benefits?
A. Being at least 62 years old
B. Having earned a certain amount of credits
C. Being a U.S. citizen
D. Being currently employed
D. Being currently employed
F.45 Social Security and Medicare planning
Sarah is nearing her retirement age and is trying to determine the best time to start claiming Social Security retirement benefits to receive the highest possible monthly benefit. She is financially stable and in good health. Which age should Sarah consider for starting her Social Security retirement benefits?
A. At age 62
B. At age 65
C. At age 70
D. It doesn’t matter when she starts claiming
C. At age 70
F.45 Social Security and Medicare planning
Jane, a financial planning client of yours, was born in 1960 and is planning her retirement. She comes to you with a question about Social Security benefits. She wants to know at what age she can receive her full Social Security retirement benefits. Which of the following is the correct full retirement age for Jane?
A. 62
B. 65
C. 67
D. 70
C. 67
F.45 Social Security and Medicare planning
Sarah, a 62-year-old woman, has been considering when to start claiming her Social Security retirement benefits. She has a robust earning history as a former executive and is currently divorced after being married for 35 years. Sarah has been pondering about various factors that could affect the amount of her Social Security retirement benefits. In your role as a Certified Financial Planner, you want to ensure that her decision is informed by accurate understandings of the determinants of Social Security benefits.
Which of the following is NOT a factor that can affect a person’s Social Security retirement benefit amount?
A. Their age when they start claiming benefits
B. Their past earnings
C. Their marital status
D. Their gender
D. Their gender
F.45 Social Security and Medicare planning
Sarah, a 61-year-old woman, is discussing her retirement plan with her financial advisor. She plans to retire soon and is exploring ways to maximize her Social Security retirement benefits. Her work history has provided her with a stable income throughout her career, and her spouse, John, who is also approaching retirement, has a similar earning history. Sarah is considering different strategies for claiming Social Security benefits and wants to ensure she adopts a strategy that will maximize the benefits for both herself and John.
Which of the following strategies is NOT typically considered a way to maximize Social Security retirement benefits?
A. Delaying claiming until age 70 to receive an increased monthly benefit.
B. Claiming benefits as soon as possible at age 62.
C. Continuing to work and earn more credits to potentially increase future benefits.
D.Planning and coordinating spousal benefits to optimize the total household benefit.
B. Claiming benefits as soon as possible at age 62.
F.45 Social Security and Medicare planning
Jane, a 62-year-old woman, has recently been contemplating when to start claiming her Social Security retirement benefits. She has a strong employment history, but recently she was diagnosed with a terminal illness that, unfortunately, limits her life expectancy to a few more years. Jane is considering whether to claim her Social Security benefits early or wait until her full retirement age.
Which of the following is the most plausible reason why Jane might choose to claim her Social Security retirement benefits early?
A. She wants to continue working full time without facing the Social Security Earnings Test.
B. She has a terminal illness.
C. She expects to live a long time.
D. She has a terminal illness.
B. She has a terminal illness.
F.45 Social Security and Medicare planning
Margaret, a financial planner, is assisting her client, Tim, with retirement planning. Tim, who has a high-earning career, is curious about how much of his earnings will be subject to the Social Security payroll tax in 2023. Margaret needs to ensure that she provides accurate information about the current tax policies. What is the maximum amount of earnings subject to the Social Security payroll tax in 2023?
A. $142,800
B. $150,000
C. $160,200
D. There is no maximum amount
C. $160,200
F.45 Social Security and Medicare planning
Caroline, age 65, recently retired and is meticulously planning her finances to ensure a smooth and steady income flow throughout her retirement. She’s currently exploring various strategies to minimize her Social Security tax liability during her retirement years. Given her circumstances, she is evaluating different approaches and consulting her financial planner about potential strategies.
Which of the following strategies is NOT likely to reduce Caroline’s Social Security taxes in retirement?
A. Delaying claiming Social Security retirement benefits until she reaches the age of 70 to take advantage of delayed retirement credits.
B. Moving to a state with lower or no state income taxes on Social Security benefits.
C. Converting funds from her traditional IRA to a Roth IRA, paying taxes upon conversion to enjoy tax-free withdrawals later.
D. Starting a small home-based business to leverage business expense deductions and potentially reduce taxable income.
B. Moving to a state with lower income taxes
F.45 Social Security and Medicare planning
Sam, a 67-year-old retiree, is attending a seminar on healthcare coverage during retirement. The speaker discusses the various Medicare plans available to help retirees manage their healthcare costs and needs. Sam recalls there are distinct parts to Medicare, each designated with a different letter and providing unique benefits.
Which of the following is NOT a type of Medicare plan?
A. Medicare Part A
B. Medicare Part B
C. Medicare Part C
D. Medicare Part E
D. Medicare Part E
F.45 Social Security and Medicare planning
Imagine your client, Jane, is approaching 65 years old and considering her options for health insurance in retirement. She has been receiving Social Security benefits since she was 62 years old and is aware that she will be automatically enrolled in Medicare Part A when she turns 65. However, she is contemplating whether to enroll in Medicare Part B immediately upon eligibility or to delay enrollment since she is still covered under her employer’s health plan. Jane wants to ensure that she fully understands the financial implications of her decision.
Which of the following accurately describes the penalty for not enrolling in Medicare Part B when first eligible?
A. 1% of the premium for each year of delay
B. 5% of the premium for each year of delay
C. 10% of the premium for each year of delay
D. There is no penalty
C. 10% of the premium for each year of delay
F.45 Social Security and Medicare planning
Sarah, 62 and recently retired, has a pension covering her living expenses and plans to delay claiming Social Security retirement benefits until age 70. Will her decision to delay claiming affect her Medicare eligibility?
A. Yes, she will not be eligible for Medicare until she claims Social Security retirement benefits.
B. No, her Medicare eligibility will not be affected by her decision to delay claiming.
C. It depends on how much she has earned in the past.
D. Sarah cannot delay claiming Social Security retirement benefits until age 70.
B. No, her Medicare eligibility will not be affected by her decision to delay claiming.
F.45 Social Security and Medicare planning
Tom, aged 63, possesses a high income and has opted to delay claiming his Social Security retirement benefits until he is 70. However, he intends to enroll in Medicare at age 65. Which of the following statements correctly describes the impact of Tom’s income level on his Medicare premiums?
A. His income level may result in higher Medicare premiums.
B. Medicare premiums are not affected by income level.
C. It depends on how much Tom has earned in the past.
D. Tom cannot delay claiming Social Security retirement benefits until age 70.
A. His income level may result in higher Medicare premiums.
F.45 Social Security and Medicare planning
Ellen, aged 66, has been availing Social Security retirement benefits for the last year. Recently, she has been diagnosed with a serious medical condition that necessitates costly treatment. Regarding Ellen’s eligibility to apply for Social Security disability benefits, which of the following statements is most accurate?
A. Ellen can apply for Social Security disability benefits if she meets the eligibility criteria
B. Ellen cannot receive both Social Security retirement and disability benefits at the same time
C. It depends on Ellen’s age and past earnings
D. Ellen cannot apply for Social Security disability benefits after age 65
D. Ellen cannot apply for Social Security disability benefits after age 65.
F.45 Social Security and Medicare planning
Mark, aged 70, has been availing Social Security retirement benefits for the last 5 years. Recently, he entered into a new marital bond with a spouse who is 60 years old. The couple is navigating through their retirement planning and is exploring the possibilities regarding Social Security spousal benefits.
Considering the age and marital status of Mark and his new spouse, can his new spouse claim Social Security spousal benefits based on Mark’s earnings record?
A. His new spouse can claim Social Security spousal benefits based on Mark’s earnings record
B. His new spouse cannot claim Social Security spousal benefits because she is more than 5 years younger than Mark
C. It depends on how long Mark and his new spouse have been married
D. Mark cannot receive Social Security retirement benefits after remarrying
A. His new spouse can claim Social Security spousal benefits based on Mark’s earnings record.
F.45 Social Security and Medicare planning
Karen, a 67-year-old retiree, has recently enrolled in Medicare. Given her chronic medical condition that demands persistent treatment, she’s concerned about the potential financial burden she might face. What can you tell her about how Medicare will handle the medical expenses related to her chronic condition?
A. Medicare will cover all of Karen’s medical expenses related to her condition
B. Medicare only covers certain types of medical expenses and Karen may have to pay out-of-pocket for some services
C. It depends on Karen’s income level
D. Karen cannot enroll in Medicare at age 67
B. Medicare only covers certain types of medical expenses and Karen may have to pay out-of-pocket for some services.
Medicare provides substantial health coverage, but it does not cover all medical expenses. Original Medicare, Part A and Part B, covers inpatient and some outpatient care respectively, but it often comes with deductibles, copayments, and coinsurance. Moreover, certain services and supplies, especially most prescription drugs, long-term care, and routine dental or eye care, might not be covered at all. Karen might consider enrolling in additional Medicare plans, such as a Medicare Advantage Plan (Part C) or a Prescription Drug Plan (Part D), to obtain broader coverage. In addition, she might explore Medigap (Medicare Supplement Insurance) policies to help cover the out-of-pocket costs that Original Medicare doesn’t cover. So, while Medicare will likely cover many of the expenses related to Karen’s condition, it’s probable that she will have to pay some costs out of pocket, particularly if she only has Original Medicare. It is crucial for Karen to understand the specifics of her coverage and explore additional insurance options to minimize her out-of-pocket costs, especially considering her ongoing treatment needs.
F.45 Social Security and Medicare planning
