The Ultimate Social Security Quiz

The Ultimate Social Security Quiz
Image: iStockphoto.com/Nick M. Do

About This Quiz

Social Security tax takes big bite out of your paycheck. Knowing about Social Security benefits may give you needed payments in the event of death, disability or retirement. Test your knowledge to see how much you know about Social Security benefits and deductions.
How often are Social Security statements issued?
monthly
yearly
You will receive a yearly statement from the Social Security Administration.
every two years

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How is Social Security funded?
payroll tax of 6.2%
payroll tax of 12.4%
Currently, the Social Security payroll tax is 12.4% of wages up to $90,000. You share this expense with your employer, you pay 6.2% and so does your employer.
payroll tax after $90,000 in wages

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Where does the government keep all the Social Security funds?
government bonds
The funds are invested in interest-paying government bonds.
stock investments
money market accounts

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How much of Social Security benefits are distributed as disability benefits?
15 percent
17 percent
17 percent of Social Security payments are for disability benefits.
25 percent

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How much of Social Security benefits are distributed as survivor benefits?
10 percent
14 percent
Fourteen percent of Social Security benefits are paid as survivor benefits. The surviving spouse and children of a deceased may receive Social Security survivor benefits.
20 percent

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Do most retirees live solely on Social Security benefits?
yes
20 percent do
Social Security benefits are a very important source of income for most retirees, but only about 20 percents depend on the benefits for 100 percent of their living expenses.
50 percent do

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At what age may you start collecting benefits?
52
62
Early retirement starts at 62 and the full retirement age is determined by your birth year.
72

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If you were born during 1945, at what age may you receive full Social Security benefits?
65
66
If born in 1945, you will be eligible for full Social Security retirement benefits at age 66.
67

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Taking early retirement reduces your benefits by how much?
10 percent
20 percent
Your benefits will be permanently reduced by about 20 percent if you start payments at age 62.
30 percent

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What about inflation?
increased by cost-of-living adjustment
Benefits are increased by a cost-of-living adjustment which averages between 3 to 4 percent every year.
automatic 2 percent increase every year
automatic 5 percent increase every year

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How should you fund the portion of your living expenses that Social Security benefits won't cover?
personal savings
retirement funds
both answers
In addition to Social Security benefits, you should have personal savings and retirement funds to pay for your living expenses.

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What type of disability is covered by Social Security disability benefits?
continuous mental or physical disability for 12 months
unable to work
both answers
To qualify, you must have a mental or physical disability for at least 12 months. The disability must be continuous and prevent you from working.

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Are alcohol and drug problems considered a disability?
alcohol only
drug only
neither
Alcohol and drug addiction are very serious problems, but they are not considered to be a disability for the purpose of Social Security disability benefits.

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Do Social Security benefits apply automatically?
You must apply for benefits with the Social Security Administration.
You must apply for benefits. To get an application, go to your local Social Security office or Social Security Online.
You must apply for benefits with the Internal Revenue Service.
You must apply for benefits at your local Department of Motor Vehicles.

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How do I receive my benefits?
check
automatic deposit
both answers
Benefits are paid monthly by check or automatic deposit to your bank account.

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Are Social Security benefits guaranteed?
The system is solid.
The system is vulnerable.
As long as many more people are paying into the system than taking benefits, the system will be sound. Currently there is great concern for the future of Social Security benefits.
The system will not be able to meet short-term obligations.

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What may be the fix for Social Security funding problems?
raise taxes
lower payments
both answers
Raising taxes or lowering payments would be, in theory, a likely fix. Neither of these two solutions is popular.

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When did Social Security become law?
1925
1935
President Franklin D. Roosevelt signed the Social Security Act of 1935.
1945

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To help Social Security, what did then-president George W. Bush propose?
invest Social Security payment is stocks
He proposed allowing individuals to contribute up to 4 percent of their Social Security payments to a private account. This private account would be invested in the stock market.
raise Social Security taxes
lower Social Security payments

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What happens if you use someone's Social Security card?
$25,000 fine
up to five years in prison
both answers
If caught you face a $25,000 fine and up to five years in prison.

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You Got:
/20
iStockphoto.com/Nick M. Do
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