RMA Social Security & Medicare Benefits 1 — Questions and Answers
Question 1: At what age can a worker first claim Social Security retirement benefits with a permanently reduced amount?
- Age 59½
- Age 62 (Correct answer)
- Age 65
- Age 67
Correct answer: Age 62
Age 62 is the earliest eligibility age for Social Security retirement benefits, though claiming early results in a permanently reduced benefit.
Question 2: For someone born in 1960 or later, what is the Full Retirement Age (FRA) for Social Security?
- Age 65
- Age 66
- Age 66 and 10 months
- Age 67 (Correct answer)
Correct answer: Age 67
The Full Retirement Age is 67 for individuals born in 1960 or later, as established by the 1983 Social Security Amendments.
Question 3: By what percentage does a Social Security benefit increase for each year a claimant delays past Full Retirement Age, up to age 70?
- 4%
- 6%
- 8% (Correct answer)
- 10%
Correct answer: 8%
Delayed retirement credits increase the benefit by 8% per year for each year delayed past FRA, up to age 70.
Question 4: A widow or widower can begin collecting survivor benefits as early as age:
- 55
- 60 (Correct answer)
- 62
- 65
Correct answer: 60
Surviving spouses can claim Social Security survivor benefits as early as age 60 (or 50 if disabled), albeit at a reduced rate.
Question 5: Which of the following best describes the 'break-even' analysis in a Social Security claiming decision?
- The age at which total cumulative benefits from early claiming equal total cumulative benefits from delayed claiming (Correct answer)
- The age at which Medicare Part B premiums equal Social Security income
- The point at which a retiree's portfolio is fully depleted
- The age at which IRMAA surcharges are eliminated
Correct answer: The age at which total cumulative benefits from early claiming equal total cumulative benefits from delayed claiming
Break-even analysis calculates the age at which the total lifetime benefits from delaying Social Security claiming equal those from claiming earlier.
Question 6: Under the Social Security earnings test, if a worker claims benefits before FRA and continues to work, benefits are reduced by $1 for every how many dollars earned above the annual exempt amount?
- $1 earned above the exempt amount
- $2 earned above the exempt amount (Correct answer)
- $3 earned above the exempt amount
- $4 earned above the exempt amount
Correct answer: $2 earned above the exempt amount
Before FRA, Social Security reduces benefits by $1 for every $2 earned above the annual exempt threshold under the earnings test.
Question 7: What is the maximum percentage of Social Security benefits that can be subject to federal income tax for higher-income retirees?
- 50%
- 75%
- 85% (Correct answer)
- 100%
Correct answer: 85%
Up to 85% of Social Security benefits may be included in taxable income for recipients whose combined income exceeds the upper threshold.
RMA Social Security & Medicare Benefits 1
At what age can a worker first claim Social Security retirement benefits with a permanently reduced amount?