Module 7 Quiz

Jeff and Julie, both age 50, are married and are both fully insured under Social Security. They have two children. Amy is 24 and was injured in an auto accident when she was 21 leaving her disabled and dependent on her parents for her care. Brad is 17 and a senior in high school. Jeff's mother, Lisa, is age 66 and lives with the couple but is not a dependent for tax purposes. If Julie dies, who may receive a survivor benefit under Social Security based upon her fully insured status? Amy Brad Jeff Lisa

I, II, and III

Delaying receipt of benefits will allow you to earn delayed retirement credits, and your future cost-of-living adjustments will be higher because they will be based on a higher base. Also, the increased base will ultimately be used to determine survivor benefits.

True

To qualify for most benefits under Social Security, an individual must be in fully insured status. This is defined as one credit per year since age 21 with a minimum of 6 and a maximum of 40 credits of covered employment, where an individual has earned above a specified dollar amount.

True

To qualify for disability income benefits under Social Security, a worker must have an impairment that

is expected to last at least 12 months or result in death.

Higher-income earners will have a Social Security retirement income replacement ratio that is

lower than low-income earners.

Maryellen, age 63, is receiving Social Security retirement benefits. She also works part time, and her earnings are $10,000 more than the earnings limit. Her Social Security retirement benefits this year will be reduced by

$5,000. Maryellen has not reached full retirement age, so she is subject to the retirement earnings test. Her Social Security benefits will be reduced by $1 for every $2 in earnings over the applicable limit.

Mary is 66 years old and receives full old-age benefits from Social Security—in her case, $1,200 per month. Her husband, Ralph, age 67, who has not worked enough quarters outside the home to be covered in his own right, receives 50% of what Mary receives each month ($600). Assume that Mary dies tomorrow. What will Ralph's Social Security benefit be?

1,200

Jill and Mark are celebrating their 20th wedding anniversary, receiving 20-year watches from their employers, and reaching full retirement age (FRA), all on the same day. Which of the following statements correctly describe the Social Security benefit Jill is eligible to receive?

100% of her own benefit

George was born in 1962. His full retirement age (FRA) for Social Security purposes is

67

What is the maximum amount of Social Security benefits that may be subject to income taxation?

85%

Which of the following statements best describes the definition of disability in qualifying for disability benefits under Social Security?

An individual must not be able to engage in any substantial, gainful activity, and the impairment must be expected to last at least 12 months or result in death.

Janice is the self-employed owner of an unincorporated business. She has hired the following family members to work in her business. Which family member(s) is(are) covered by Social Security? Her husband Her daughter, age 16 Her son, age 19

I and III

Social Security provides individuals with protection against which of the following risks?

Inflation risk

What is the earliest age at which a currently insured worker may claim Social Security retirement benefits based on her own work history?

Retirement benefits are not available for a currently insured worker

A covered individual or his survivor is entitled to which of the following benefits under Social Security if the worker is only in a currently insured status?

Surviving child's (dependent) benefit

Assume that a worker's Social Security full retirement age (FRA) is 67, and the worker retires and starts drawing Social Security early at age 64. What are the consequences?

The worker receives a reduced benefit for the rest of his life.

Fully insured status generally requires a measure of employment covered by Social Security (OASDI) that is 40

credits of coverage.

In 2020, James earned $6,000 from employment subject to Social Security taxation between January 1 and September 30. He was then unemployed for the remainder of the year. How many credits of coverage did James earn for the year 2020?

4

Brent and Carol have an adjusted gross income (AGI) of $40,000, and they receive a combined Social Security benefit of $15,000. They have no tax-exempt income. What percentage of their Social Security benefit will be subject to taxation?

85%

Charles (age 38) has just died. He has been credited with the last 30 consecutive credits of Social Security coverage in the last 30 quarters since he left school and began full-time employment. He had never worked before leaving school. Which of the following persons are eligible to receive Social Security survivor benefits as a result of Charles's death? Charles's child, Bill, age 16 Charles's child, Dawn, age 19 Charles's widow, Maggie, age 38 Charles's dependent mother, Betty, age 60

D) I only Charles's child, Bill, age 16

Which of the following statements is(are) CORRECT regarding the Social Security Windfall Elimination Provision (WEP)? The WEP is designed to reduce Social Security retirement benefits for any worker who is eligible for retirement benefits from multiple employers. An example of a worker who may be subject to the WEP is one who works for a government agency or a foreign employer. The WEP applies to all Social Security benefits for which a family member or dependent of a covered worker may qualify. In the case of a worker subject to the WEP, the provision is applied by reducing the formula used to calculate a worker's primary insurance amount (PIA), resulting in a lower benefit.

II and IV An example of a worker who may be subject to the WEP is one who works for a government agency or a foreign employer. In the case of a worker subject to the WEP, the provision is applied by reducing the formula used to calculate a worker's primary insurance amount (PIA), resulting in a lower benefit.

The employer portion of the payroll tax rate, including the portion dedicated to Social Security (OASDI) and the portion dedicated to Medicare funding, on a covered worker's earnings up to the Social Security taxable wage base is

7.65%.

If a retiree's annual Social Security benefit is $9,000 at age 62 and $9,600 at age 63, how many years would it take to equal the benefit of forgoing a year of payments (waiting one more year to receive a larger payment), not including inflation?

8 years $9,000 divided by the extra amount ($600) equals 15 years to equal the same benefit taking the larger amount the next year. ($9,000 ÷ $600 = 15 years)

When does the maximum family benefit limitation NOT apply to reduce total Social Security benefits payable?

When both the husband and the wife receive a retirement benefit based on their own employment record

Delaying receipt of benefits (for example until age 70) will result in all of the following except

permanently reduced benefit amount.

All of the following workers are covered by the Social Security system except

railroad workers covered under the federal Railroad Retirement Act.

Social Security began as a program to provide retirement income but has been expanded to provide all of the following income except

survivor benefits to spouse caring for a child under 19.

Social Security payments are

taxable if your provisional income exceeds the applicable threshold.