Social Security

Question 1

Reduction of Benefits

Answer 1

• Reduced by 5/9 for each month, for 1st three years retire early
• Reduced by 5/12 for each month beyond 3 years

Question 2

Example: FRA is 65, but take SS at 62. What is amount of benefit?

Answer 2

65-62 = 3 years or 36 months
36 x 5/9 = 20% of benefits reduced
Therefore, receives 80% of FRA amount at 62

Question 3

Example: FRA is 67, but take SS at 62. How much is benefit reduced by?

Answer 3

67-62 = 5 years or 60 months
First 3 years:
36 months x 5/9 = 20%, plus
Next 2 years: 24 x 5/12=10%

Total reduction is 30%
Will receive 70% of FRA at 62

Question 4

SS Disability Requirements

Answer 4

• Disability expected to last for 12 months or will result in death AND can’t do ANY occupation

Question 5

SS Income eligibility

Answer 5

Must earn 40 quarters
1 quarter = $1,640 in wages subject to SS

Based on dollar amount of earnings, indexed each year

Question 6

SS Disability Eligibility

Answer 6

Age 31+: fully insured (40 quarters) and earned 20 quarters in last 40

Age 24-31: 1/2 of calendar quarters elapsed since turned 21

21-24: 6 quarters earned

Question 7

Spouse of retired / disabled worker

Answer 7

• At least age 62
  Or
• Caring for child under 16 or disabled

Question 8

Divorced Spouse

Answer 8

• Age 62
  and
• married to worker for at least 10 years
  and
• Didn’t remarry
• Widow at age 60
  and / or caring for child under 16

Question 9

Surviving Spouse

Answer 9

Spouse gets 100% of dead spouse’s benefit at her FRA

Question 10

Rules for Dependent Parents claim SS

Answer 10

At least age 62
Must be a dependent on tax forms (older parents you care for)
Only can claim if you die

Question 11

Reduction in SS benefits by earning too much while collecting

Answer 11

Temporary reduction goes away when you reach FRA

• Years before FRA = $1 reduction for every $2 above earnings threshold
  Threshold = $21,240

Year you reach FRA= $1 for every $3 above threshold.
Threshold = $56,520