Following are answers to some of the questions raised by staff members in connection with Purdue's participation in Social Security.
- will be 65 in June 1957. How long must I work under Social Security before I am entitled to retire and receive a benefit?
Most people (younger than you) will use the table on page 6 of the booklet "Your Social Security" (to determine quarters of coverage needed to be eligible, to retire at age 65. (Note that the table shows 12 quarters would be required in your case). You, however, will receive the advantage of the two special provisions of the 1954 Social Security Amendments, as explained on page 7 of the booklet. Under those provisions you will be entitled to retire and receive a benefit at age 65 with only 9 continuous quarters of coverage (1 January 1955 through 3l March 1957).
- (a). I will not be 65 until 1980. The table on page 6 shows that I must have 40 quarters before I am fully insured. What happens if I work only 39 quarters under Social Security and then go into uncovered employment?
With only 39 quarters of coverage you would not qualify for a retirement benefit at age 65. However, you should understand that you may earn the additional quarter you need in covered employment or self-employment after 65.
(b). Will the survivors' benefits insurance be in effect, if I leave covered employment - assuming I leave in 1964 after working only 39 quarters?
Yes. You would continue to be "currently insured" for 18 months and "fully insured" (in case of death) for 6 years after you leave covered employment.
- Does "fully insured" mean that I would be entitled to a retirement benefit of $108.50 per month at age 65?
No. The term "fully insured" describes the status in which you are entitled to a benefit or in which your survivors are entitled to a benefit based on your account. The amount of the benefit is based on your average monthly earnings (including taxable self employment income). Calculation of average monthly earnings is explained on page 11 of the booklet.
- (a). I am 45. If Purdue gets Social Security and I work 10 years at a salary in excess of $4200 and then go into uncovered employment, will I get a retirement benefit at age 65?
You will, if you apply for it. Benefits must be applied for.
(b). How much would my retirement benefit be?
Since you would be entitled to drop out 1 year of no earnings (after 1954) the $4200 earned in the 10 years of covered employment would be spread over 19 years (period between age 45 and 65 - less one year). Your average monthly wage for the 19 years would be approximately $185. The table on page 13 of the booklet shows that your retirement benefit would be approximately $75 per month. It would be approximately $113 per month for you and your wife, if your wife also reached age 65 at the time of your retirement.
- If the majority of eligible voters vote in favor of Social Security, does each individual in the TIAA Retirement System have the option as to whether he participates?
No. If the eligible voters accept Social Security for the group, everyone in the group will participate. (There are certain exceptions, such as graduate assistants, participants in the Federal Civil Service Retirement System, etc. who will be excluded from Social Security by agreement with the Federal Government.)
- I have a Social Security number that I took out 15 years ago. Should I keep that same number?
Yes. That number will go with you through life. If you have lost your card, YOU should request a duplicate card through a Social Security office.
- (a). My salary is paid in 10 installments for services in the academic year. Will I get 4 quarters of coverage each year?
Yes
(b). If I continue working on a ten months basis after age 65, can I get my retirement benefit, or must I retire completely before I can get retirement benefits?
It would be possible for you to apply for and receive benefits for two months in the summer when no salary payments are received and no services are rendered.
(c). Would my wife get benefits for the whole year, if she does not work?
No. She would get benefits only for the two months.
- (a). If I go back to work and earn wages of $150 per month after I have begun to receive Social Security benefits, how many monthly benefit checks would I receive each year?
$150 per month is $1800 per year. As shown in the table on page 22, you would receive 4 benefit checks.
(b). If I go back to work for 6 months only and earn wages of $300 per month, how many monthly benefit checks would I receive in that year?
Since you do not render services in all months of the year, the table on page, 22 is not used to determine the, number of monthly benefits payable. Instead the rule shown on page 22 of the booklet under the heading "If You Do Not Work in All Months of the Year", is applied. Under this rule you would lose 6 monthly checks and receive 6.
(c). Would I pay Social Security Tax on the $1800 wages or are earnings received after I have qualified for a retirement benefit tax-free?
You would always pay the tax on wages or on net self-employment income.
(d). Would I pay Federal Income Tax on amounts received from Social Security?
No. Social Security benefits are not taxable.
(e). Is the same thing true of amounts received from TIAA?
No. Amounts received from TIAA are taxable as annuities.
- If I receive book royalties of approximately $1500 per year after I have retired, how many Social Security benefit checks would I receive each year?
That depends on whether or not you render substantial services in self-employment. If you continue to write, revise, edit, etc. during retirement, you would be rendering substantial services, and you would receive only 8 benefit checks - as shown in the table on page 22.of the booklet. On the other hand, if you did no writing, rewriting etc. in any particular year you would receive all 12 benefit checks. The receipt of book royalties (or any other type of self-employment income) does not stop Social Security benefit payments, if no "substantial services" are rendered in the period under consideration. The Social Security Administration will make decisions, as to whether or not an individual renders "substantial services", based on the particular facts In each case.
- (a). If I retire under Social Security, can I get a benefit for my child (under 18) as well as for my wife (under 65)?
Yes, if the child is in your wife's care.
(b). If I have a dependent parent, can I get a benefit for the dependent parent and for my wife and child too?
No. A dependent parent benefit can never be paid during your lifetime. If you are survived by a wife and/or child or children, their claims take precedence over the claim of a dependent parent. A dependent parent benefit can only be paid, if you have no other eligible survivors at the time of your death.
(c). Under what conditions is a parent considered a dependent for Social Security purposes?
A dependent parent is one at least 50% supported by the wage earner. In making a decision as to whether or not a parent qualifies as a dependent the Social Security Administration will take into consideration any income the parent may have.
- If I am fully insured for maximum benefits at 65 and my wife is also, what will our total monthly benefit be?
You will each get $108.50 per month.
- What advantage will an employed wife have under Social Security if her husband is also working under Social Security?
This is difficult to answer because there are so many variables involved. In most cases, the benefits would be less than in the case of a single woman. However, there are some situations in which the gain in benefits would equal or exceed those available in the case of a single woman.
- (a). If I should die, while both my wife and I are "currently insured", could our children under 18 receive benefits from my Social Security account, assuming my wife continues to work?
Yes.
(b). What if my wife dies, and I continue to work?
The children could receive benefits from her account.
- (a). If I have self-employment income in addition to my salary, must I pay Social Security tax on both?
Not necessarily. If your salary exceeds $4200, you would not pay any tax on your self-employment income. If your salary is less than $4200, you would pay tax on some or all of your self-employment income. $4200 is the overall maximum on which tax is paid.
(b). If I have had Social Security tax deducted by two employers in the same year and the total tax deducted is in excess of $84, how do I go about getting a refund of the excess tax?
You apply for a credit on your Federal Income Tax Return in accordance with instructions provided with the Form 1040. You show the excess Social Security Tax on the 1040 and then get credit for it, just as if it were Income Tax withheld.
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