Questions
1. Can you receive retirement and disability benefits from Social Security at the same time?
a. Yes
b. No
2. If your ex-spouse receives benefits based on your earnings record, your benefit will be reduced by how much?
a. Reduced by 30%
b. Reduced by 40%
c. Reduced by 50%
d. Your benefit will not be reduced
3. For each year you wait past your full retirement age to collect Social Security, how much will your retirement benefit increase?
a. 6%
b. 7%
c. 8%
4. Monthly Social Security benefits are required to be paid by which of the following methods?
a. Paper check only
b. Paper check, direct deposit, or debit card
c. Direct deposit or debit card
5. Are Social Security benefits subject to income tax withholding?
a. Yes
b. No
6. Once you’ve begun receiving Social Security retirement benefits, you can withdraw your claim if how much time has elapsed?
a. Less than 12 months since you’ve been receiving benefits
b. Less than 18 months since you’ve been receiving benefits
c. Less than 24 months since you’ve been receiving benefits
Answers
1. b. No. If you receive a disability benefit, it will automatically convert to a retirement benefit once you reach full retirement age.
2. d. Your benefit will not be reduced if your ex-spouse receives Social Security benefits based on your earnings record.
3. c. Starting at full retirement age, you will earn delayed retirement credits that will increase your benefit by 8% per year up to age 70. For example, if your full retirement age is 66, you can earn credits for a maximum of four years. At age 70, your benefit will then be 32% higher than it would have been at full retirement age.
4. c. Since 2013, the Treasury Department has required electronic payment of federal benefits, including Social Security. You can sign up for direct deposit of your benefits into your current bank account or open a low-cost Electronic Transfer Account (ETA) at a participating financial institution. Another option is to sign up for a Direct Express® prepaid debit card. Under this option, your Social Security benefits are deposited directly into your card account, and you can use the card to make purchases, pay expenses, or get cash.
5. b. No. Withholding isn’t mandatory, but you may voluntarily ask the Social Security Administration to withhold federal income tax from your benefits when you apply, or later, if you determine you will owe taxes on your Social Security benefits (not everyone does). You may choose to have 7%, 10%, 15%, or 25% of your benefit payment withheld. Ask a tax professional for help with your situation.
6. a. If something unexpected happens and you’ve been receiving Social Security benefits for less than 12 months after signing up, you can change your mind and withdraw your claim (and reapply at a later date). You’re limited to one withdrawal per lifetime, and there are also financial consequences. You must repay all benefits already paid to you or your family members based on your application (anyone affected must consent in writing to the withdrawal), and repay any money previously withheld, including Medicare premiums or income taxes.
If you have questions or need assistance, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
