Social Security Flashcards
(25 cards)
How is the early retirement reduction calculated for Social Security benefits?
First 36 months early: Reduced by 5/9 of 1% per month.
Beyond 36 months (up to 60 months): Reduced by 5/12 of 1% per month.
Example: Retiring 60 months early reduces benefits by 30% (20% + 10%)
What is the 2025 earnings test limit before full retirement age (FRA)?
$22,320 annually; $1 earned above deducts $1 from benefits for every $2 over the limit
How much do benefits increase for delaying retirement past FRA?
8% annually (2/3 of 1% monthly) until age 70. Example: Delaying 48 months (age 67 to 70) increases benefits by 24% (total 132% of PIA)
What is the maximum benefit at age 70 in 2025?
$4,873/month ($58,476 annually) for high earners
Who qualifies for child benefits?
Unmarried children under 18.
Ages 18–19 if full-time student (grade 12 or below).
Any age if disabled before 22
What is the family maximum benefit?
150–180% of the worker’s Primary Insurance Amount (PIA)
What are the rules for surviving spouses?
Age 60+ (50+ if disabled) can claim benefits.
Divorced spouses qualify if marriage lasted ≥10 years and unmarried.
What is the lump-sum death benefit?
$255 one-time payment to eligible surviving spouse/child
Can dependent parents receive survivor benefits?
Yes, if age 62+ and relied on the deceased for ≥50% of support (average $1,600/month in 2024)
What are the eligibility criteria for Social Security Disability Insurance (SSDI)?
Unable to perform “substantial gainful activity” due to medically proven disability.
Must meet recent work credits (varies by age)
Do disabled adult children retain benefits?
Yes, indefinitely if disability began before 22
What is the Primary Insurance Amount (PIA)?
Benefit amount at full retirement age (FRA), based on top 35 years of earnings
What is the Full Retirement Age (FRA) for those born in 1960 or later?
67
How is AIME calculated?
Average Indexed Monthly Earnings = inflation-adjusted average of top 35 years
How do COLAs affect Social Security?
Benefits adjust annually for inflation (e.g., 3.2% in 2024)
What are WEP/GPO?
WEP: Reduces benefits for workers with non-covered pensions (e.g., government jobs).
GPO: Reduces spousal benefits if receiving a non-covered pension
: A worker with a PIA of $2,000 retires 36 months early. What is their reduced benefit?
Reduction: 36 × (5/9%) = 20%.
Benefit: $2,000 × 80% = $1,600/month
How is Social Security funded?
6.2% from employees + 6.2% from employers (12.4% for self-employed) via payroll taxes (FICA)
What are the eligibility requirements for retirement benefits?
40 credits (10 years of work in covered employment)
Cost-of-Living Adjustment (COLA) for 2025
2025 COLA is 2.5% (was 3.2% in 202
When are Social Security benefits taxable?
If provisional income exceeds $25,000 (single) or $32,000 (married filing jointly), up to 50% or 85% of benefits may be taxable, depending on income level.
What is provisional income for Social Security taxation?
Adjusted gross income + nontaxable interest + 50% of Social Security benefits.
What is the Windfall Elimination Provision (WEP)?
Reduces Social Security benefits for workers who receive a pension from non-covered (not subject to Social Security taxes) employment
What is the Government Pension Offset (GPO)?
Reduces spousal or survivor Social Security benefits for those who receive a government pension from non-covered work
