What is the difference in yearly Social Security benefits for Cindy if the benefit percentage goes from 42% to 29%?

What is the difference in yearly Social Security benefits for Cindy if the benefit percentage goes from 42% to 29%?

• A. $5,850
• B. $4,200
• C. $6,000
• D. $5,000

Answer: (A)

To find the difference in yearly Social Security benefits for Cindy based on a change in the benefit percentage from 42% to 29%, we first need to understand how these percentages apply. The benefit percentage refers to how much of Cindy's average indexed monthly earnings (AIME) is converted into monthly benefits. Here, the calculation for each percentage is essential: 1. **Calculating benefits at 42%**: If we assume an average AIME of $1,000 just for simplicity, then at 42%, the monthly benefit would be calculated as: - Monthly benefit at 42% = AIME × 0.42 = $1,000 × 0.42 = $420 - Yearly benefit at this percentage = $420 × 12 = $5,040 2. **Calculating benefits at 29%**: Using the same AIME of $1,000, the monthly benefit at 29% would be: - Monthly benefit at 29% = AIME × 0.29 = $1,000 × 0.29 = $290 - Yearly benefit at this percentage = $290 × 12 = $3,480 3. **Finding the

To find the difference in yearly Social Security benefits for Cindy based on a change in the benefit percentage from 42% to 29%, we first need to understand how these percentages apply. The benefit percentage refers to how much of Cindy's average indexed monthly earnings (AIME) is converted into monthly benefits.

Here, the calculation for each percentage is essential:

1. Calculating benefits at 42%: If we assume an average AIME of $1,000 just for simplicity, then at 42%, the monthly benefit would be calculated as:

• Monthly benefit at 42% = AIME × 0.42 = $1,000 × 0.42 = $420

• Yearly benefit at this percentage = $420 × 12 = $5,040

2. Calculating benefits at 29%: Using the same AIME of $1,000, the monthly benefit at 29% would be:

• Monthly benefit at 29% = AIME × 0.29 = $1,000 × 0.29 = $290

• Yearly benefit at this percentage = $290 × 12 = $3,480

3. **Finding the