Social Security Flashcards
(35 cards)
how is Social Security funded?
from taxes collected on wages from employees and employers
what does FICA stand for?
Federal Insurance Contributions Act
what does SECA stand for?
Self-Employed Contributions Act
what is the FICA tax breakdown?
- 2% on wages up to the wage base of $142,800 (2021)
- 45% on all wages
- 9% Medicare surtax on wages and self-employment income over the thresholds
what does OASDI stand for?
Old Age, Survivor, and Disability Insurance
what are the categories of Social Security benefits?
- retirement benefits
- disability benefits
- death benefit
- survivors’ benefits
- medicare
what is the breakdown of how Social Security retirement benefits are reduced if taken before full retirement age?
reduced by 5/9 of 1% for each month for the first 3 years that a worker retires early
reduced by 5/12 of 1% for each month beyond 3 years that a worker retires early
what does “fully insured” mean?
fully insured means a worker must earn 40 quarters of coverage
how does a worker earn a quarter of coverage?
based on dollar amount of earnings
1 quarter = $1,470 in wages subject to Social Security
what is the breakdown of how Social Security retirement benefits are increased if taken after full retirement age?
increase of 8% per year until age 70
what people are eligible for Social Security retirement benefits?
- a disabled insured worker under age 65
- a retired insured worker age 62 or older
- a spouse of a retired or disabled worker who is at least 62, OR is caring for a child under age 16 or a disabled child
- a divorced spouse of a retired or disabled worker, if the ex-spouse is age 62 and was married to the worker for at least 10 years and did not remarry by age 60
what is a spouse eligible for Social Security benefits?
the spouse of a retired or disabled worker who is:
- at least age 62, OR
- is caring for a child under age 16 or a disabled child
when is an ex-spouse eligible for Social Security benefits?
the ex-spouse of a retired or disabled worker who is:
- at least age 62, and
- was married to the worker for at least 10 years, and
- did not remarry by age 60
how are Social Security retirement benefits reduced if the retiree earns too much?
for early retirement: benefit is reduced $1 for every $2 above the earnings threshold ($18,960/year) for persons below full retirement age
for full retirement age: benefit is reduced $1 for every $3 above the earnings threshold ($50,250/year)
what is the max amount of Social Security benefits that may be taxed?
85%
what income makes up the thresholds for Social Security benefit taxation?
- AGI
- nontaxable interest
- foreign earned income
- 1/2 of retirement benefit
disability definition for Social Security Disability
there is severe physical or mental impairment for 5 months that is expected to prevent the worker from performing substantial work for at least one year or result in death
when is a worker considered to be covered for disability benefits?
for ages 31+: the worker is fully insured and earned 20 quarters in the last 40 quarters
for age 24-30: the worker has earned 1/2 of quarters available since age 21 to disability
for ages 21-24: the worker has earned 6 quarters in the last 12 quarters
who is eligible for Social Security survivor benefits?
- a worker that is fully insured or currently insured (at least 6 quarters of coverage in the last 13 quarters)
- a child under age 18 (under 19 if in high school), or disabled prior to age 22
- a spouse with a child under age 16
- spouse of a fully insured worker (no coverage for a spouse of a currently insured worker)
what is Medicare?
Federal health insurance for people aged 65 and older
when can a spouse qualify for Medicare?
at age 65 based on the other spouse’s work record
how many parts are there to Medicare?
3 parts (A, B, and D)
what is Medicare Part A?
hospital insurance (covers places)
what is covered in Medicare Part A?
- inpatient hospital care and home health care
- semi-private rooms, meals, operating and recovery rooms, lab tests, x-rays
- hospice coverage
- skilled nursing care facility FOLLOWING a covered hospital stay
