#1
1. What does FICA stand for in the context of Social Security taxation?
Federal Insurance Contributions Act
ExplanationFICA stands for Federal Insurance Contributions Act, governing the social security taxation system.
#2
7. What is the purpose of the Social Security Trust Fund?
To hold surplus Social Security revenue for future payouts
ExplanationThe Social Security Trust Fund's purpose is to hold surplus revenue for future Social Security payouts.
#3
9. Which government agency administers the Social Security program in the United States?
Social Security Administration (SSA)
ExplanationThe Social Security Administration (SSA) administers the Social Security program in the United States.
#4
15. What role does the OASDI tax play in Social Security funding?
Funds disability insurance within Social Security
ExplanationThe OASDI tax funds disability insurance within the Social Security program.
#5
20. What is the role of the Social Security Advisory Board?
Advises on Social Security policy and administration
ExplanationThe Social Security Advisory Board advises on policy and administration of the Social Security program.
#6
2. In the United States, what is the maximum amount of earnings subject to the Social Security tax in a given year?
$142,800
ExplanationThe maximum earnings subject to Social Security tax in the U.S. is $142,800 for a given year.
#7
3. How is Social Security income taxed at the federal level?
Taxed based on income brackets
ExplanationSocial Security income is taxed at the federal level based on income brackets.
#8
6. In the context of Social Security, what is the Windfall Elimination Provision (WEP) designed to address?
Adjusting benefits for workers with non-covered employment
ExplanationThe Windfall Elimination Provision (WEP) in Social Security is designed to adjust benefits for workers with non-covered employment.
#9
8. How are Social Security benefits calculated based on an individual's earnings record?
Percentage of average lifetime earnings
ExplanationSocial Security benefits are calculated based on an individual's earnings record as a percentage of average lifetime earnings.
#10
11. What is the purpose of the Social Security COLA (Cost of Living Adjustment)?
To adjust benefits based on inflation
ExplanationThe purpose of the Social Security COLA is to adjust benefits based on changes in the cost of living due to inflation.
#11
14. How are Social Security benefits affected if a person chooses to retire before reaching the Full Retirement Age (FRA)?
Benefits decrease
ExplanationIf a person retires before reaching the Full Retirement Age (FRA), their Social Security benefits decrease.
#12
4. Which of the following groups is generally exempt from paying Social Security taxes in the United States?
Federal government employees
ExplanationFederal government employees are generally exempt from paying Social Security taxes in the United States.
#13
5. What is the Full Retirement Age (FRA) for Social Security benefits in the United States?
67
ExplanationThe Full Retirement Age (FRA) for Social Security benefits in the United States is 67.
#14
10. What is the significance of the 35-year earnings history used in the calculation of Social Security benefits?
Calculates the average indexed monthly earnings
ExplanationThe 35-year earnings history in Social Security calculates the average indexed monthly earnings for benefit calculation.
#15
12. How does the Social Security program address survivor benefits?
Providing benefits to eligible family members of deceased workers
ExplanationThe Social Security program provides survivor benefits to eligible family members of deceased workers.
#16
13. What is the Windfall Elimination Provision (WEP) in Social Security, and who does it primarily affect?
Reduces benefits for workers with non-covered employment
ExplanationThe Windfall Elimination Provision (WEP) in Social Security reduces benefits for workers with non-covered employment.
#17
17. How does the Social Security program address disability benefits?
Available for eligible individuals with permanent disabilities
ExplanationSocial Security provides disability benefits for eligible individuals with permanent disabilities.