Social Security Basics

Social Security benefits are funded through a payroll tax called the:

FICA tax

Which of the following statements about the funding of Social Security benefits is correct?

The FICA tax is allocated between OASDI and Medicare.

Social Security benefit amounts are most directly based on a worker's:

average indexed monthly earnings

Patty worked full-time for the past 20 years and has obtained 40 quarters of coverage for Social Security benefit purposes. She is now eligible for full death, retirement, and disability benefits under Social Security, which means that she is considered which of the following?

fully insured

Under the Old Age, Survivors, and Disability Insurance (OASDI) Program, eligible workers and their families may be entitled to receive all of the following EXCEPT:

medical care benefits

The FICA tax is split between an employee and employer, with the employee paying how much?

one-half (50 percent) of the total tax.

If a worker has over 40 OASDI quarters of coverage what is his or her Social Security worker status?

permanently insured

To be considered currently insured, a worker must have earned how many quarters of coverage in the 13-quarter period before he or she dies?

six

A worker who is considered currently insured is entitled to which of the following Social Security benefits?

survivors benefits only

With respect to Social Security benefits, what is a worker's PIA?

the amount of the retirement benefit the worker will receive at his or her full retirement age

A worker's Social Security primary insurance amount (PIA) represents:

the benefit amount the worker would receive at full retirement age

Under Social Security, what is the primary insurance amount (PIA)?

the monthly benefit amount a person will receive if he or she elects to take benefits at full retirement age

To be considered permanently insured for OASDI purposes, a worker must have how many quarters of coverage?

40

Janet, age 62, plans to quit her job and apply for Social Security retirement benefits this year. Which of the following statements is correct if Janet claims retirement benefits before she reaches her full retirement age?

Janet's benefits will be permanently reduced.

Social Security provides a variety of programs for eligible workers and their families. What are its two main programs?

OASDI and Medicare