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chapter 12
social security
| average indexed monthly earnings | The calculation used to determine Social Security benefits, based on a worker's highest indexed 35 years of earnings adjusted for inflation. |
| what does AIME stand for? | average indexed monthly earnings |
| what forms the basis for calculating the primary insurance amount? | the AIME |
| benefit period | A specific time frame used to track Medicare hospital benefits |
| when does a new benefit period begin | each hospital admission and ends when no hospital or skilled nursing care has been received for 60 consecutive days |
| credits (quarters of coverage) | Units that determine Social Security eligibility |
| how many credits are required for full benefits? | 40 credits (10 years of work) |
| currently insured | Having earned at least six credits in the last 13 quarters, qualifying for limited survivor benefits |
| federal insurance contributions act (FICA) | The law requiring payroll tax contributions that fund Social Security and Medicare programs |
| how much do employers and employees contribute | 7.65%(6.2 for social security + 1.45 for medicare) |
| how much do self employed individuals pay? | 15.3% |
| full retirement age (FRA) | The age at which a person becomes eligible for 100% of their Social Security retirement benefits |
| for those born in 1960 or later when is FRA | 67 |
| fully insured | Having earned 40 credits (quarters), qualifying for retirement, survivor benefits, and Medicare |
| old age, survivors, and disability insurance (OASDI) | The official name for Social Security |
| what does the federal insurance program provide | retirement, disability, and survivor benefits to eligible workers and their dependents |
| primary insurance amount (PIA) | The basic benefit amount a person receives at FRA, before any adjustments for early or delayed retirement. This serves as the foundation for calculating all Social Security benefits. |
| Social security disability insurance (SSDI) | Benefits paid to workers who meet Social Security's strict definition of disability – being unable to engage in substantial gainful activity due to a medical condition expected to last at least 12 months or result in death |
| survivor benefits | Benefits paid to eligible family members of a deceased worker, including a one-time death benefit of $255 and monthly benefits for surviving spouses, dependent children, and, in some cases, dependent parents |
| Who qualifies for Social Security | those who are fully insured and those who are currently insured |
| to receive maximum benefits the eligible individual must be | fully insured |
| what is the minimum requirement for workers under age 24 to obtain "currently insured" | 6 credits in the last three years |
| early retirement ages are | 62-66 |
| full retirement age is | 67 |
| delayed retirement | 67-70 |
| key disability requirements | must be fully insured, 20-40 quarters. five month waiting period, must be total disability, must last 12 months or result in death |
| blackout period timeline | starts when the youngest child turns 16 ends when the curviving spouse reaches 60 |
| social security act | created the social security program |
| 20/40 rule | workers age 31+ need 20 quarter in the last 40 quarters |
| quarter of coverage | any three months ending march 31, june 30, september30, or december 31 |
| average indexed monthly earnings (AIME) | Based on the highest 35 years |
| early retirement | 70% of PIA (30% rediction) |
| full retirement age | 100% of PIA |
| delayed retirement | 124% of PIA |
| below FRA | $1 reduction for every $3 earned above a different limit |
| at or above FRA | No earning limitation |
| definition of disability | unable to engage in any substantial gainful activity |
| lump sum death benefit | $255 paid to surviving spouse living with deceased or eligible child |
| what are death benefits based on (MONTHLY SURVIVOR BENEFITS) | deceased worker's PIA |
| Maximum family benefit | limits total benefits paid to a family |
| dual benefit liability | eligible individuals can only collect one benefit |
| FICA tax percentages for self employed | 15.3% |
| the timing of benefit claims significantly impacts what? | monthly payment amount |
Created by:
Lupe12