OK, class. You’ve been reading my column for a number of years now. It’s time to see how much you’ve learned.
So put on your thinking caps, get your No. 2 pencils out, and good luck with this short pop quiz.
QUESTION 1: How many years of earnings are used to calculate a social security pension? And is your actual earnings used or a variation of these earnings?
QUESTION 2: If you are 62 and working full time, can you then sign up for reduced social benefits?
QUESTION 3: What is the bonus you get if you defer the benefits beyond your full retirement age?
QUESTION 4: “You can receive reduced benefits at age 62 on your spouse’s journal and later switch to full benefits on your own Social Security journal.” True or false?
QUESTION 5: Man Hanks’ full retirement age is $ 2,000 per month. month. But he delayed benefits until the age of 70 and receives $ 2,640 a month. His wife Wilma never worked, so she applied for spousal benefits on Hank’s record when she reached full retirement age. How much does she get?
QUESTION 6: Referring back to question 5, how much does Wilma get when Hank dies?
QUESTION 7: Referring back to questions 5 and 6, if Wilma dies first, what will Hank receive (including any special funeral services)?
QUESTION 8: Tom is 62 and still working, and he and his wife are covered by his employer’s health insurance. His wife is 65 and retired from her own job, which did not offer health insurance. She is applying for Social Security and Medicare. Should she take both Part A and B of Medicare?
QUESTION 9: Where is the best place to get all your social security questions answered?
ANSWER TO QUESTIONS 1: 35 years of inflation-adjusted earnings are used. To calculate your benefit, the Social Security Administration indexes your entire annual earnings for inflation, pulling out the top 35 of those years and adding them together. Then they divide the total amount by 420 (the number of months in 35 years) to get your average indexed monthly salary. Finally, they multiply this amount by a variable percentage that depends on how high or low your salary is. That’s about 40 percent for average wage earners.
ANSWER TO QUESTION 2: Well, you can apply for benefits, but you will not get anything if you assume you earn well over $ 19,560 a year. This is the earnings penalty limit for 2022 for people who are below their full retirement age. In the year you reach your full retirement age, you can earn up to $ 51,960 in the months leading up to your FRA month. When you reach your full retirement age, those earnings penalties disappear and you can earn as much as you want.
ANSWER TO QUESTION 3: Many of you may have answered “8 percent a year.” Others might have answered “32 percent if you wait until 70.” Both answers are technically correct if your full retirement age was 66. But the bonus is actually two-thirds of 1 percent for each month a benefit is delayed beyond the full retirement age. So if your full retirement age is higher than 66, you will have fewer months to earn these late retirement credits, so your bonus at age 70 will be less than 32 percent.
ANSWER TO QUESTION 4: False (with one exception). In the past, many people were able to jump through a loophole that allowed them to do so. That loophole is closed to anyone who did not turn 66 before January 2, 2020. However, widows or widowers can take reduced benefits on one post at age 62 and later switch to full benefit on the other post.
ANSWER TO QUESTIONS 5: Wife Wilma gets $ 1,000 a month. A wife who defers to receive spousal benefits until full retirement age must be paid half of her husband’s social security benefit. But she does not share the delayed pension bonus that Hank receives. So Wilma only gets half of Hanks’ $ 2,000 FRA rate – or $ 1,000. And by the way, if Wilma would have received benefits before her full retirement age, her spousal rate would have been reduced by about half of 1 percent for each month she is under FRA.
ANSWER TO QUESTIONS 6: Wilma will receive $ 2,640 a month in widow benefits. Even if a wife does not receive a share of her husband’s delayed pension bonus, the law states that a widow can.
ANSWER TO QUESTION 7: Hank does not get a penny. He cannot get widower benefits because his own pension benefits are higher. And he will not even get the measly little $ 255 on death. In question 5, I pointed out that Wilma never worked. The death benefit is paid only on the account of a person who worked and paid social security taxes.
ANSWER TO QUESTIONS 8: Tom’s wife should sign up for Part A Medicare (hospital coverage) because it’s free. But she does not have to take Part B (covers doctor visits, lab tests, etc.), which costs $ 170.10 a month because her husband works and she is covered by his employer’s insurance. When her husband retires and loses active employment insurance, she must apply for Part B and she will not pay any fines for late enrollment.
ANSWER TO QUESTION 9: This is easy. Just read my little social security guide called “Social Security – Simple and Smart.” You can get it for less than $ 10 at Amazon and other bookstores.
If you have a question about social security, Tom Margenau has a book with all the answers. It’s called “Social Security – Simple and Smart.” You can find the book on www.creators.com/books. Or look for it on Amazon or other bookstores.