How Well Do You Know Social Security And The 2015 Income Claiming Rule Changes?

1.

Section 831 of the Bipartisan Budget Act of 2015 addresses which of the following?
- A.
  
  How someone’s full retirement benefit is calculated based on his/her earnings history
- B.
  
  The Department of Defense spending budget
- C.
  
  Phase out the file-and-suspend and restricted application Social Security claiming strategies
- D.
  
  Section 831 helps wealthy people get more Social Security income
Correct Answer
C. Phase out the file-and-suspend and restricted application Social Security claiming strategies

Explanation
Section 831 of the Bipartisan Budget Act of 2015 addresses the phase out of the file-and-suspend and restricted application Social Security claiming strategies. This means that under this section, these claiming strategies are being eliminated or reduced. The file-and-suspend strategy allowed one spouse to file for Social Security benefits and then suspend them, allowing the other spouse to claim spousal benefits. The restricted application strategy allowed individuals to choose between claiming their own benefits or spousal benefits. This section of the act is aimed at changing these claiming strategies and potentially reducing the benefits available to wealthy individuals.

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2.

Section 831 of the BBA 2015 phases out which of the following over time?
- A.
  
  Use of the restricted application to obtain spousal income while delaying own retirement benefit
- B.
  
  Application of the file-and-suspend strategy
- C.
  
  Strategies for couples and divorced retirees to potentially get more Social Security income
- D.
  
  All of the above are correct
Correct Answer
D. All of the above are correct

Explanation
Section 831 of the BBA 2015 phases out the use of the restricted application to obtain spousal income while delaying one's own retirement benefit, the application of the file-and-suspend strategy, and strategies for couples and divorced retirees to potentially get more Social Security income. This means that these strategies will no longer be available over time.

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3.

How many, and which years of earnings, are used to calculate the Social Security Benefit?
- A.
  
  35 years of your most recent earnings
- B.
  
  30 years of your highest earnings
- C.
  
  35 years of your highest earnings
- D.
  
  30 years of your most recent earnings
Correct Answer
C. 35 years of your highest earnings

Explanation
The correct answer is 35 years of your highest earnings. This means that the Social Security Benefit is calculated based on the 35 years in which you earned the most income. By using the highest earning years, the calculation aims to provide a more accurate representation of an individual's earning potential and therefore their Social Security Benefit.

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4.

If you file for Social Security and start collecting benefits, but then feel you have made a mistake, how long do you have to withdraw your application and pay the benefits back?
- A.
  
  2 years
- B.
  
  5 years
- C.
  
  1 year
- D.
  
  3 years
Correct Answer
C. 1 year

Explanation
If you file for Social Security and start collecting benefits, you have one year to withdraw your application and pay the benefits back. This means that if you realize that you made a mistake in filing or collecting benefits within one year, you can reverse the process and return the benefits received. After this one-year period, it is no longer possible to withdraw the application and repay the benefits.

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5.

If divorced, what is the minimum amount of years you must have been married to collect an ex-spousal benefit?
- A.
  
  5 years
- B.
  
  2 years
- C.
  
  10 years
- D.
  
  12 years
Correct Answer
C. 10 years

Explanation
To collect an ex-spousal benefit, one must have been married for a minimum of 10 years. This requirement ensures that the marriage was of a significant duration, allowing the divorced individual to potentially receive financial support from their former spouse. It also helps prevent individuals from taking advantage of the benefit after short-term marriages.

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6.

When were Social Security income benefits first taxed and by how much?
- A.
  
  1994, up to 85% could be taxed
- B.
  
  1983, up to 50% could be taxed
- C.
  
  1983, up to 85% could be taxed
- D.
  
  1994, up to 50% could be taxed
Correct Answer
B. 1983, up to 50% could be taxed

Explanation
In 1983, Social Security income benefits were first taxed. At that time, up to 50% of the benefits could be taxed.

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7.

Which of the following are not impacted by Section 831 of the BBA 2015?
- A.
  
  Phase out the file-and-suspend strategy
- B.
  
  Phase out the restricted application (for spousal benefit)
- C.
  
  Widow(er) benefits and claiming strategies
- D.
  
  Divorced benefits and claiming strategies
Correct Answer
C. Widow(er) benefits and claiming strategies

Explanation
Section 831 of the BBA 2015 impacts various Social Security claiming strategies, such as the file-and-suspend strategy and the restricted application for spousal benefits. However, widow(er) benefits and claiming strategies are not affected by this section. This means that individuals who are eligible for widow(er) benefits can still claim them without any changes or limitations imposed by Section 831 of the BBA 2015. Divorced benefits and claiming strategies are not mentioned in the answer and therefore it is unclear whether they are impacted or not.

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8.

With respect to the BBA 2015, which of the following are correct age(s) and dates for phase-out triggers of the two Social Security claiming techniques?
- A.
  
  Age 66 by April 29, 2016 for file-and-suspend benefits
- B.
  
  Age 62 by end of December 2015 for use of restricted application for spousal benefit
- C.
  
  Age 62 by April 29, 2016 for use of restricted application for spousal benefit
- D.
  
  Both A and B
Correct Answer
D. Both A and B

Explanation
Both A and B are correct. According to the BBA 2015, the phase-out triggers for the two Social Security claiming techniques are as follows: Age 66 by April 29, 2016 for file-and-suspend benefits, and Age 62 by end of December 2015 for use of restricted application for spousal benefit.

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9.

The file-and-suspend claiming strategy:
- A.
  
  Will no longer be available to retirees who were younger than 66 by April 29, 2016.
- B.
  
  Is a claiming strategy that allows couples to collect spousal Social Security income while allowing their own retirement benefit to increase due to delayed retirement credits.
- C.
  
  Was first used after passage of the Senior Citizens Freedom to Work Act of 2000.
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
The correct answer is "All of the above". This means that all of the statements given about the file-and-suspend claiming strategy are true. The strategy will no longer be available to retirees who were younger than 66 by April 29, 2016. It is a claiming strategy that allows couples to collect spousal Social Security income while allowing their own retirement benefit to increase. And it was first used after the passage of the Senior Citizens Freedom to Work Act of 2000.

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10.

Which of the following phrases best mirrors President Obama's 2015 budget proposal reason for including and passing Section 831 within the BBA 2015?
- A.
  
  To prevent duplicative or excessive Social Security benefit payments
- B.
  
  To provide more Americans with the opportunity to get more Social Security payments
- C.
  
  To provide non-wage earning spouses ways to get more Security payments
- D.
  
  To reduce excessive payments on widows(ers) benefits
Correct Answer
A. To prevent duplicative or excessive Social Security benefit payments

Explanation
The correct answer is "To prevent duplicative or excessive Social Security benefit payments." This mirrors President Obama's 2015 budget proposal reason for including and passing Section 831 within the BBA 2015 because it implies that the goal is to avoid unnecessary or excessive payments, which aligns with the objective of the budget proposal.

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How Well Do You Know Social Security And The 2015 Income Claiming Rule Changes?

Section 831 of the Bipartisan Budget Act of 2015 addresses which of the following?

Section 831 of the BBA 2015 phases out which of the following over time?

How many, and which years of earnings, are used to calculate the Social Security Benefit?

If you file for Social Security and start collecting benefits, but then feel you have made a mistake, how long do you have to withdraw your application and pay the benefits back?

If divorced, what is the minimum amount of years you must have been married to collect an ex-spousal benefit?

When were Social Security income benefits first taxed and by how much?

Which of the following are not impacted by Section 831 of the BBA 2015?

With respect to the BBA 2015, which of the following are correct age(s) and dates for phase-out triggers of the two Social Security claiming techniques?

The file-and-suspend claiming strategy:

Which of the following phrases best mirrors President Obama's 2015 budget proposal reason for including and passing Section 831 within the BBA 2015?