Did you pay attention?
Alright, class. You have been reading my column for several years now. It’s time to see how much you’ve learned. So put on your thinking caps, get out your #2 pencils, and good luck with this short pop quiz.
QUESTION 1: How many years of earnings are used to calculate a Social Security retirement benefit? And is your actual earnings used or a variation of those earnings?
Q2: If you are 62 years old and working full time, can you take out reduced social security benefits?
Q3: What is the bonus you get if you delay benefits beyond full retirement age?
Q4: “You can get reduced benefits at age 62 on your spouse’s record and later switch to full benefits on your own Social Security record.” True or false?
Q5: Husband Hank’s full retirement age benefit is $2,000 per month. But he deferred his benefits until age 70 and is getting $2,640 a month. Wife Wilma never worked, so she applied for spousal benefits on Hank’s case when she reached full retirement age. How much does she earn?
Q6: Going back to question 5, when Hank dies, how much will Wilma get?
Q7: Referring to questions 5 and 6, if Wilma dies first, what will Hank get (including special funeral benefits)?
Q8: Tom is 62 and still working and he and his wife are covered by his employer’s health insurance plan. His wife is 65 and retired from her own job which did not offer health insurance. She is about to apply for Social Security and Medicare. Should she take both parts A and B of the health insurance?
Q9: Where is the best place to get all your Social Security questions answered?
ANSWER TO QUESTION 1: Thirty-five years of inflation-adjusted earnings are used. To calculate your benefit, the Social Security Administration indexes all of your annual earnings to inflation, extracts the highest 35 of those years, and adds them together. Then they divide that total 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 the level of your salary. It’s about 40% for average earners.
A2: Well, you could apply for benefits, but you won’t get anything, assuming you earn well over $19,560 a year. This is the income penalty threshold for 2022 for people who have not reached full retirement age. In the year you reach your full retirement age, you can earn up to $51,960 in the months before your month of full retirement age. Once you reach full retirement age, those earnings penalties disappear and you can earn as much as you want.
A3: Many of you may have answered “8% per year”. Others might have answered “32% 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% for each month a benefit is delayed beyond full retirement age. Thus, if your full retirement age is over 66, you will have fewer months to accumulate these deferred retirement credits, so that your bonus at age 70 will be less than 32%.
A4: False (with one exception). In the past, many people could jump through a loophole that allowed them to do so. This loophole is closed for anyone who was not 66 on January 2, 2020. However, widows or widowers can receive reduced benefits on one file at age 62 and later switch to full benefits on the other file. .
AT 5 : Wife Wilma gets $1,000 a month. A wife who delays spousal benefits until full retirement age must receive half of her husband’s Social Security benefits. But she doesn’t share the deferred retirement bonus Hank receives. So Wilma only gets half Hank’s full retirement age rate of $2,000 — or $1,000. Incidentally, if Wilma had been on benefits before full retirement age, her spousal rate would be reduced by approximately one-half of 1% for each month that she did not reach retirement age. full pension.
A6: Wilma will receive $2,640 per month in widowhood benefits. Although a wife does not share her husband’s deferred retirement bonus, the law says a widow can.
A7: Hank won’t have a penny. He cannot receive widower’s benefits because his own pension benefits are higher. He won’t even get the measly little death benefit of $255. In question 5, I pointed out that Wilma has never worked. The death benefit is paid only into the account of someone who has worked and paid social security contributions.
AT 8 : Tom’s wife should enroll in Medicare Part A (hospital coverage) because it’s free. But she doesn’t need to take Part B (covers doctor visits, lab tests, etc.), which costs $170.10 a month, because her husband works and she’s covered by insurance of his employer. When her husband retires and loses this active health coverage, then she must apply for Part B and she will not pay any late enrollment penalty.
R9: This one is easy. Just read my little guide to Social Security titled Social security – simple and smart. You can get it for less than $10 from Amazon and other bookstores.
[I’ve been editing Tom Margenau’s column for years and I only got three out of nine answers correct! – Glenn Rosen, Copy Editor]
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 at www.creators.com/books. Or look for it on Amazon or other book outlets. To learn more about Tom Margenau and to read previous columns and view articles by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.