Social Security & Medicare Benefits Flashcards

How many years of indexed earnings does the Social Security Administration use to calculate a worker's average indexed monthly earnings (AIME)?

Answer: 35 highest years

AIME is based on the worker's 35 highest years of indexed earnings, with zeros filling any missing years.

In the calendar year a client reaches full retirement age, how are benefits withheld under the earnings test for earnings above the higher annual limit?

Answer: $1 for every $3 earned

In the year of reaching FRA, $1 is withheld for every $3 above the higher limit, counting only earnings before the FRA month.

What is the maximum percentage of a client's Social Security benefits that can be included in federal taxable income?

Answer: 85%

Depending on provisional income, up to 85% of Social Security benefits may be subject to federal income tax.

A client stops working at 67 and loses employer group health coverage based on current employment. How long is the Special Enrollment Period to sign up for Part B without penalty?

Answer: 8 months

The Part B Special Enrollment Period lasts 8 months after employment or the employment-based coverage ends, whichever comes first.

A client at full retirement age voluntarily suspends retirement benefits. What happens to the benefit their spouse receives on the client's record?

Answer: It is also suspended

Since the Bipartisan Budget Act of 2015, a voluntary suspension also suspends benefits payable to others on the worker's record (except a divorced spouse).

A client claimed Social Security at 63 and regrets it after 8 months. Which option allows them to undo the claim as if it never happened?

Answer: Withdraw the application within 12 months and repay all benefits received

Form SSA-521 lets a person withdraw an application within 12 months of first entitlement if all benefits received are repaid.

Under the Social Security Fairness Act signed in January 2025, what happened to the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?

Answer: Both were repealed

The Social Security Fairness Act repealed both WEP and GPO for benefits payable after December 2023.