Social Security Flashcards
1
Q
Social security benefits
A
social insurance programs covered by social security act
- social security (OASDI)
- medicare
- federal unemployment insurance
- supplemental security income (SSI)
2
Q
Fully insured
A
- has 40 quarters of coverage
- social security credit (fica taxed earned income amount) (no more than 4 credits/ yr)
- 40 quarters or credits = fully insured for life
- eligible for both survivor and retirement benefits
3
Q
Currently insured
A
- 6 quarters of coverage
- only eligible for
1. lump sum DB ($255) for spouse or dependent
2. surviving spouse benefits (if children under 16)
3. dependent benefit - probably no questions on this
4
Q
Participating in social security
A
- nearly everyone covered under OASDI
not covered: - federal employees employed before 1984
- americans working abroad
- student nurses
- railroad employees
- under 18 working for parent
- ministers, religions, christian science if claiming exemption
- trial counsel members
- some state employee and teachers
5
Q
Railroad employees
A
- excluded from SSA
- have separate retirement system by railroad retirement board
- eligible for medicare
6
Q
Worker benefits
A
- retired fully insured worker age 62 or over is entitled to benefits
- worker is entitled to disability benefits if under 65 and disabled for 12 months, expected to be disabled for 12 months, or disability is expected to result in death and has completed 5 mo waiting period
7
Q
Spouse benefits
A
spouse of retired or disabled worker qualifies for payments if they meet any of the following
- 62 y/o or over
- at any age of spouse
1. has child in care under 16
2. has child 16 + and disabled before 22
8
Q
Surviving spouse
A
- qualifies for SS payments if widower is 60 or over
- including surviving divorced spouse ( must have been married at least 10 yrs and not remarried)
- divorced spouse at least 62 and divorced for at least 2 yrs can receive benefits based on workers earnings
- surviving spouse regardless of age is entitled to benefits if child is under 16 or became disabled by 22
9
Q
Dependent benefits
A
- surviving dependent, unmarried child of deceased, disabled or retired insured worker, qualifies for SSA if dependent is
1. under 19 and full time elementary or secondary school student
2. age 18 or over but disability beginning before age 22
10
Q
Lump sum death benefit
A
- spouse living in same household as deceased at time of death or a dependent child (not both) is eligible for a one time lump sum benefit
- $255
11
Q
Social security benefits calculation
A
- primary insurance amount (PIA) is the basic unit to determine the amount of each monthly benefit payable
- spouse/ divorced may be entitled to PIA of 50% or more of workers PIA (unless own benefit greater)
12
Q
Full retirement age (FRA)
A
- age you must reach to be eligible to receive full benefits
- those electing to receive benefits before FRA will receive a reduced benefit
- can start as early as 62 but its before FRA so benefits are reduced
13
Q
Taking SSA before full retirement age
A
- first determine PIA
- then reduce PIA by 5/9 of 1% or 1/80 for each 36 months that the worker is under FRA
Reduced benefits = PIA - [(# of months before FRA / 180) * PIA]
14
Q
Working after retirement
A
- if you take benefits and continue to earn income before FRA then you can lose those benefits if your workplace earnings exceed a threshold
- workers who attained FRA may keep all benefits no matter how much is earned
- workers younger than FRA have limit to how much the worker can earn and still receive SSA
- younger than FRA in 2023 $1 deducted from benefits for each $2 earned above $21,240
- reach FRA during 2023, $1 deducted from benefits for each $3 of earned income above $56,520 until month FRA is reached
15
Q
Taxation of benefits
A
- if persons income plus half of SSA is more than $25k (S) or $32k (MFJ) base amount, up to 50% of benefits will be included in income
- if persons income plus half of SSA is more than $34k (S) or $44k (MFJ) base amount, up to 85% of benefits will be included in income
- muni bond interest counts as income
- income is AGI + tax exempt interest and 1/2 SSA
- if you take benefits then you may have to pay income tax on those benefits if your provisional income exceeds a threshold
