Mrs.Chambers is 62 years old and plans to retire.Over her life she earned an average of $2,500 per month after adjusting for inflation.The formula for calculating the full monthly Social Security benefits is 90% of the first $856 earned,then 32% of the earnings over $856.What will her monthly benefit be if her full retirement benefit is reduced by approximately 30% for retiring before the age of 67?

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Quizplus · Accepted Answer

First, calculate the full monthly Social Security benefit based on the given formula and average earnings of $2,500. The first $856 earns at 90%, which is $770.40. The remaining $1,644 ($2,500 - $856) earns at 32%, which is $526.08. The total full benefit is $1,296.48 ($770.40 + $526.08). If this amount is reduced by approximately 30% for early retirement, the reduced benefit is 70% of $1,296.48, which is approximately $907.54. However, none of the options match this calculation directly, suggesting a need for recalculating based on the options provided. The correct calculation for the scenario described should yield a result close to one of the options, but given the options and the typical calculation method, there seems to be a misunderstanding in the calculation process or in the interpretation of the options. The correct approach involves applying the formula to the average earnings and then applying the reduction percentage for early retirement. Given the discrepancy, the closest match based on the expected process is option C, assuming a misunderstanding in the final calculation step or an error in the provided options or the calculation process itself.

MrsChambers Is 62 Years Old and Plans to Retire