Social Security and Medicare

Question 1

Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for maximum taxable earnings.

Revolt · Accepted Answer

Social Security tax: $6,621.60, Medicare tax: $3,413.70

Question 2

Which of the following statements accurately describes the result of a decreasing worker-per-beneficiary ratio in the Social Security system?

Revolt · Accepted Answer

Fewer taxed workers than beneficiaries means that more money is being drawn from the system for the money put in. This leaves a shortage of money in the system making benefits for future beneficiaries unsure.

Question 3

Social Security offers all but which of the following benefits?

Revolt · Accepted Answer

home loans

Question 4

Determine the total annual FICA tax for an annual salary of $38,480. (FICA is 7.65%)

Revolt · Accepted Answer

$2,943.72

Question 5

Sally has just finished her thirty-fifth year with her company and is getting ready to retire. During her thirty-five years, Sally’s average annual salary was $45,603. How much can Sally expect to receive from Social Security annually if she were to retire today? (Assume she will receive 42% of her average annual salary.)

Revolt · Accepted Answer

$19,153.26

Question 6

Which of the following is a benefit Social Security does not offer?

Revolt · Accepted Answer

automobile insurance

Question 7

Christina will be retiring next month from her job after 35 years as a school bus driver. Over the last 35 years, Christina’s annual salary averaged $22,040. She expects to receive some money each month from Social Security and plans to take the rest of the money she needs to pay the monthly bills from savings. Each month her bills total to about $1,375. Assuming her annual Social Security benefit will be 42% of her salary average, how much will she need to take from savings each month to help pay the bills?

Revolt · Accepted Answer

At least $603.60

Question 8

Which of the following statements explains the relationship between Social Security and Medicare taxes?

Revolt · Accepted Answer

Social Security is applied to all wages up to the maximum taxable earnings. Medicare is applied to all wages without limit.

Question 9

Which group or groups can typically draw benefits that are funded by Social Security taxes? I. Disabled workers II. Laid-off workers III. Family members of deceased workers

Revolt · Accepted Answer

I and III

Question 10

If a 6.2% Social Security tax is applied to a maximum wage of $106,800, the maximum amount of Social Security tax that could ever be charged in a single year is:

Revolt · Accepted Answer

$6,621.60

Social Security and Medicare Answers

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