Monthly Benefits

The Social Security Administration has a computerized service that determines your benefits because Social Security benefits are based on a fairly complicated formula. In fact, the government is required to provide all covered workers with a Social Security Statement.

Identify the range of benefits you can expect.

	If you retire at age 62, benefits of_____ to______% of your _______. (A.) Last year's earnings B.) Adjusted first-year benefit C.) Full Retirement Benefits) (<-- These choices are for last blank only. First two blanks are fill in the blank)
	If you retire at age 65 to 67, receipt of___________ (A.) Your adjusted first-year benefit B.) Your benefits or the higher paid spouse benefits C.) Your Full Retirement Benefits) . .
	If you delay retirement until age 70, you can receive________in your benefits. (A.) a decrease B.) An increase)

Range of Benefits

Raphael, a 66 years old worker, is deciding between retirement either this year or the next year. His average monthly benefit is determined to be $1,089.50. Assume that the benefit is the same for this year and the next year.

Compute Raphaels annual benefit reduction amounts in each of the following scenarios.

	If Raphael retires this year and secures a part-time job earning $18,000, his annual benefit reduction amount is $___________ .
	If Raphael retires this year, secures the same part-time job, and in addition projects interest and dividend earnings of $7,000 per year, what his annual benefit reduction amount is $_________ .
	If Raphael retires next year and secures the same part-time job, the annual benefit reduction amount is $__________ .

Taxes on Benefits

Social Security is paid in with after-tax dollars but may be subject to tax if annual income exceeds a base amount. A single taxpayers base is $25,000. Married taxpayers filing jointly have a base of $32,000. Married taxpayers filing separately have a base of zero.

Suppose Alex is retiring this year at age 67. The following table shows his data.

Part-time salary	$31,500	Annual savings account interest	$275
Annual dividends	$2,500	Annual interest on Atlanta municipal bonds	$1,350

Based on the income calculated, Alex will have_________% of his Social Security benefits taxed.