Social Security Flashcards
What are the 6 major categories of benefits administered by the Social Security administration?
1) Retirement Benefits
2) Disability Benefits
3) Family Benefits
4) Survivors’ benefits
5) Medicare
6) Supplemental Security Income
Who is the family benefit provided to?
1) Spouses 62 or older
2) Spouses under 62 caring for a child under age 16
3) Unmarried Children under 18
4) Unmarried Children under 19 & full-time students
5) Unmarried children any age disabled before 22
What people automatically qualify for medicare?
65 or older OR those who received disability benefits for at least 2 years
What is (SSI) Supplementary Security Income funded by?
General tax revenues (not by social security taxes)
What are the requirements to become a covered worker under social security?
Contributing for 10 years (40 quarters)
What is the law allowing social security taxes and medicare taxes to be deducted from paychecks?
Federal Insurance Contributions Act ) FICA)
2022 OASDI (aka social Security) taxability Limit?
$147,000
Who pays the additional medicare tax of 0.9% that began in 2013?
Only Employees - wages or self employment income
The 3.8% Medicare tax is imposed on the lesser if net investment income or modified AGI over the following amounts:
MFJ : $250,000
MFS : $125,000
Single : $200,000
Head of Household : $200,000
What does the 3.8% Medicare surtax apply to?
Investment income only - not wages from employment or distributions from qualified plans
What are the 2 medicare trust funds?
1) Hospital Insurance Trust Fund
2) Supplementary Medical Insurance Trust Fund
Pays for services covered under the hospital insurance provisions of Medicare (Part A)
Hospital Insurance Trust Fund
Pays for services covered under the medical insurance provisions of Medicare (Part B)
SMI - Supplementary Medical Insurance Trust Fund
“Currently” Insured Workers
Those individuals who have at least six quarters of coverage out of the previous 13 quarters under Social Security
The amount of earnings required for a quarter of coverage under Social Security?
$1,510
Rules for a divorced spouse to receive SS benefits of a fully insured worker who has not yet filed a claim for benefits?
Must be…
- Both her an ex-spouse are at least 62
- Were married for at least 10 years
- Divorced for at least 2 continuous years
Social security benefits can be paid to a disabled insured worker under age ________ .
65
Social security benefits can be paid to a retired insured worker at age _________ .
62 or older
Social security benefits can be paid to the spouse of a retired or disabled worker who:
- Is at least 62
- OR is caring for a child who is under 16 or disabled
Social security benefits can be paid to divorced spouse of a retired or disabled worker if the divorced spouse is …
- Age 62 or older
- Was married for at least 10 years
Social security benefits can be paid to the dependent , unmarried child of a retired or disabled worker or a a deceased insured worker if the child is …
- Under age 18
- Under age 19 and a full time elementary or secondary school student
- Age 18 or over but disabled (if the disability began before age 22)
Social security benefits can be paid to surviving spouse (including a surviving divorced spouse) of a deceased insured worker if the widower is age ________ .
60 or older
Social security benefits can be paid to the disabled surviving spouse (including divorced spouse) of a deceased insured worker if the widower is age _________ .
50 or older
Social security benefits can be paid to the surviving spouse (including divorced spouse) of a deceased insured worker, regardless of age if …
- caring for an entitled child of the deceased who is either under age 16 or disabled before age 22
Social security benefits can be paid to the dependent parents of a deceased insured worker at age _________ .
62 or older
Elements needed to determine a workers social security retirement benefit.
- Person’s age
- Actual earnings history subject to Social Security tax
- Worker’s retirement date
The social security administration calculates ___________ during the —- years in which the applicant earned the most.
AIME (Average Indexed Monthly Earnings)
35 years
How to determine indexing factor for Social Security AIME calculation?
Average wage for current year / Average wage in year SS participation began
Annual COLA increases are determined in _________ of each year and go into effect in time so that they first appear on monthly benefit checks received in the following _____________ .
October
January
No matter what the “full” retirement age is, a worker may start receiving benefits as early as age ______ and can also retire at any time between then and full retirement age.
62
For each month of early retirement workers will receive a reduction in their monthly retirement benefit of _____________ for _______________ .
For subsequent months of early retirement, the permanent reduction percentage is ____________ per ____________ .
- 5/9 of 1% for up to the first 36 months
- 5/12 of 1% per month
Social Security benefits taken based on age do not differ much when factoring in inflation based on the PV. What major considerations should be made when determining when to take Social Security?
- Annual income needed to maintain standard of living
- Life Expectancy
- Tax impact of benefits
For worker who receives social security before normal retirement age the earnings for 2022 can not exceed __________ .
The Social security administration reduces ____ in benefits for each $2 earned above the stated threshold.
$19,560
$1
In the year that the retiree reaches full retirement age ______ in benefits will be deducted for each ______ earned above the years given limit (only for earnings before the month the retiree reaches full retirement age).
$1 for each $3
For 2022 the limit for earnings in the year which the retiree reaches full retirement age is ______ .
$51,960
Once the retiree reaches normal retirement age, benefits __________ reduced regardless of the earnings limitations.
Will not be
Wages for employees are countable for social security count toward the earnings limitation at what point in time?
Earned … NOT when they are paid
Income from self-employment usually counts when ______________ ?
Paid - NOT when earned
What do not count as earnings limitation when receiving Social Security?
1) Pension/ Retirement Income
2) 401(k) Plan and IRA W/Ds
3) Dividends and Interest from investments
4) Capital Gains
5) Rental Income
6) Workers Comp
7) Unemployment
8) Court Awarded Judgements
9) Contest Winnings
What is the limit for special monthly calculation that applies to the first year of retirement?
(For any month in which earnings are below 1/12 of the annual amount)
$1350
Equal to taxpayers adjusted gross income plus tax exempt interest
MAGI
For persons with substantial income in addition to their SS benefits, up to ______ percent of their annual benefits may be subject to federal income tax.
85%
What are the Social Security Hurdle amounts?
MFJ -
1st Hurdle: $32,000
2nd Hurdle: $44,000
All others (except MFS = 0)
1st Hurdle: $25,000
2nd Hurdle: $34,000
If MAGI plus 1/2 of SS benefits exceeds 1st Hurdle but not second, the taxable amount of SS benefits is the lesser of:
50% of SS benefits
OR
50% (MAGI + .50 (Social Security Benefits) - Hurdle 1)
If MAGI plus 1/2 the social security benefit exceeds the 2nd hurdle, the taxable amount of Social Security benefits is the lesser of:
85% of Social Security Benefits
OR Lesser
85% (MAGI + .50 (SS Benefits) - Hurdle 2)
Workers are insured for disability if they are fully insured and have a total of at least ____________ during the __________ period ending with the quarter in which the worker became disabled.
20 quarters of coverage during the 40 quarter
What is the typical waiting period for Social Security disability benefits?
5 months
A widow or widower who remarries after age _____ is not disqualified from obtaining benefits based on the deceased spouse’s earnings.
60 (marriage before this age can cause disqualification)
What is the blackout period?
For surviving spouse under age 60 will receive benefits until youngest child reaches 16… these benefits will cease until spouse turns 60 (50 if disabled)
Which individuals are entitled to medicare at any age?
Disabled individuals
Permanent Kidney Failure
Medicare Part A
Hospital Insurance
Medicare Part B
Medical Insurance
Medicare Part D
Prescription Drug Coverage
Who automatically qualifies for Medicare?
- Individuals 65 and older
- Individuals who have received SSDI benefits for at least 2 years
- Spouses age 65 and older eligible based on spouses earnings
The number of days that Medicare covers care in hospitals and skilled nursing facilities is measured in ___________ .
Benefit Periods
When does a benefit period begin and end?
BEGINS: The first day a patient receives services in a hospital or skilled nursing facility
ENDS: After 60 consecutive days without further skilled care
What is the limit to the number of benefit periods that a beneficiary of Medicare may have?
There is no limit
Medicare pays all approved charges for the first _____ days relating to skilled nursing facility care and the patient pays a co-insurance amount for days ____________ .
20
21 - 100
For those already receiving Social Security, how will the Part B Premium be paid?
It will automatically be deducted from Social Security Benefits.
For those not already receiving Social Security, how will the Part B Premium be paid?
Can choose to receive a bill or have payments automatically deducted from checking or savings
What does Medicare Part A NOT cover?
- Hospital stays beyond 90 days
- Services provided outside of U.S and its territories
- Over 100 days of skilled nursing care
- Custodial Care
What is NOT covered under Medicare PART B?
- Prescription drugs not administered by doctor
- Services provided outside of U.S. and territories
- Routine Physical Exams
- Eye, Dental, Hearing, Eyeglasses
- Luxury/Elective Surgeries
Why is it recommend for a worker to enroll in Medigap during open enrollment (6-month period) at age 65?
During the time of open enrollment, the health status of the applicant can not be used as a reason to refuse a Medigap policy or to charge more than other open enrollment applicants.
A list of drugs that a Medicare drug plan covers is called a __________ .
Formulary
One major advantage of Medicare Advantage Plans is that they may have a(n) ____________ .
Maximum Out of Pocket Amount
When will those receiving SS prior to age 65 receive a Medicare Insurance card in the mail?
3 months before turning age 65
Those not yet receiving SS benefits at age 65 will need to enroll for Medicare during the (IEP) beginning and ending when?
3 months before the month of the 65th birthday and ending 3 months after the month of the 65th birthday
When does the Medicare Part B Special Enrollment Period start?
The earlier of:
1) Termination of employment
2) Termination of group coverage & lasts for 8 months
What is the difference between SSI and SSDI?
SSI - based on age & limited incom/resources
SSDI - based on disability and work credits
Generally only _________ and __________ count towards retirement earnings limitation.
Wages and Net Self employment income
OASDI
Old age survivors and disability insurance
Delayed social security benefits will increase at how much per year beyond full retirement age?
8% per year, does not compound
A special one time payment may be made upon SS receivers death to spouse or minor children of how much?
$255
Total percent of wages collected to fund OASDI & Medicare Part A.
15.3%
