Ch. 11:  Social Security

***I plan to record a video for this chapter in the coming days, which will be especially helpful*** 

(posted:  August 12, 2024)

Chapter 11:  Social Security

11.0  Introduction

            Back in the Great Depression-riddled 1930s, U.S. politicians aimed to tackle a very difficult problem--poverty among senior citizens.  At the time, more than half of senior citizens were living below the poverty-line.  FDR signed the Social Security Act in 1935, and Ida May Fuller earned the very first payment in 1939.  Today, the Social Security system is the largest line-item on the Federal Budget, with $1.3 trillion in outlays in 2023.  As we will learn, Social Security doesn’t just make payments to older folks like Ida, it also serves as a form of both life and disability insurance. 

11.1 Social Security Taxes

            If you are a U.S. citizen, you will almost certainly be paying into Social Security (SS).  It’s a mandatory tax for most.  Social Security taxes are paid on income only, not investment earnings.  So, if you sell stock in a brokerage account, you will not trigger any SS taxes.  Similarly, rental income is typically not taxable for SS.  But you will pay SS taxes on any income generated from your job, whether you are self-employed or otherwise.  Have three jobs?  The income from all three jobs will be taxable for SS. 

  The tax rate on SS is 6.2% of eligible income, meaning that a person earning $100,000 of eligible income will pay $6,200 in SS taxes.[1]  That’s the general concept.  To be more exact, SS taxes all income that you earn from you jobs minus contributions made to employer-provided health insurance plans.  Monthly health insurance premiums, HSA contributions, FSA contributions, etc. all reduce taxable income for SS.  Other contributions (401(k), IRAs, etc.) do not impact SS taxes.  Unlike income taxes, SS is taxed on an individual basis.  There are no “married filing jointly” categorizations to worry about, for instance.  As an employee, you must pay a 6.2% tax.  Your employer also pays this tax.  So, if I earn $100,000 in a year, I will pay $6,200 in SS and the state of Georgia (my employer) will also pay $6,200 on my behalf.  The examples below should help you get a grip on this.

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Example 1:  In 2024, Mallory earns $80,000 as an electrician. She uses a health insurance plan offered by her employer.  She pays $5,000 in health insurance premiums and makes $2,500 in health savings account. She also contributes $10,000 to a traditional 401(k) and she pays $4,000 for surgery in 2024.  Solve for her SS taxes.

Social Security Income = $80,000 - $5,000 - $2,500 = $72,500

Social Security Taxes = $72,500(.062) = $4,495

Explanation:  Mallory’s $80,000 in earned income is all potentially eligible.  Both her health insurance premiums (the annual cost to have health insurance) and HSA contributions reduce her taxable income for SS.  This leaves her with $72,500 in eligible income for SS.  The 401(k) contribution will reduce her income taxes but has no impact on SS taxes.  The $4,000 medical cost for surgery does not affect her taxes; health insurance costs reduce SS taxes, but direct medical costs don’t.

Example 2:  Jermaine and Jasmine are married and have two kids.  In 2024, Jermaine earns $45,000 as a self-employed artist.  Jasmine earns $90,000 from her job as an accountant.  Jasmine pays $7,000 in health insurance premiums from her employer-offered health insurance plan, which covers her entire family.  In 2024, Jermaine sold stock in his brokerage account.  He paid $2,500 for the stock in 2008 and sells it for $15,000 in 2024.  Solve for their Social Security Taxes.

Jermaine

Social Security Income = $45,000 = $45,000

Social Security Taxes = $45,000(.062*2) = $5,580

Jasmine

Social Security Income = $90,000 - $7,000 = $83,000

Social Security Taxes = $45,000(.062) = $5,146

Explanation:  Jermaine and Jasmine are treated separately.  Jermaine pays SS taxes on all his income.  Since he is self-employed, he must pay a 12.4% SS tax (2 times 6.2%). Jasmine’s health insurance premiums reduce her SS taxes.  Jermaine’s investment earnings are not relevant for SS taxes.

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  If you are working as an employee, your employer should automatically deduct the 6.2% from your paycheck and there is rarely anything SS-related to worry about come tax-filing time.  But if you are self-employed or a contract worker, you will probably pay all your SS (and Medicare) taxes when you file. 

  Social Security is designed as a safety net, and the agency assumes that some individuals reach an income-level that makes SS benefits unnecessary.  As such, there is a cut-off point for taxes.  In 2024, that point is $168,600.  An income earned beyond this point will not be taxable for SS.  So, Lebron James is only paying $10,453.20 in Social Security taxes ($168,600*.062 = $10,453.20).  This is good news for Lebron (it’s about time that guy caught a break).  As we will explore, Social Security is generally a “bad deal” for those with high incomes.

  Some local governments have instituted a replacement for Social Security, which permits employees to eschew Social Security.  For example, public school teachers in Gwinnett County, GA pay a 1% income-based tax to a retirement program that is unique to the county.  This is rare.  You are almost certainly going to be paying into SS and eventually receiving benefits.  Another oddity—if you are employed by a college or university while a student, you will not pay SS or Medicare taxes nor will you amass any SS benefits.  Speaking of Medicare taxes…

11.1B Medicare Taxes

  This seems like as good a place as any to fully flesh-out Medicare taxes.  I’m not fully covering Medicare in this book.  Why?  (1) Because I don’t want to and (2) I strongly believe the Medicare system will be radically different by the time you reach the age of eligibility.  I think learning about it now is a waste of time.  But we need to understand taxes.  The Medicare tax rate is 1.45% and this applies to the same “eligible income” that applies for SS taxes, meaning that health insurance contributions reduce your Medicare taxes.  If you are self-employed, you have to pay this tax twice, just like SS.  

  Your Medicare taxes are used to cover medical costs for many older Americans.  When you are old, you may receive medical funding too, but who knows.  Unlike SS, paying more in Medicare taxes does not directly impact your future benefits.  In other words, paying an extra $100 in SS taxes usually means greater retirement benefits in the future, while paying an extra $100 in Medicare taxes does nothing for you.

There is one major difference regarding the taxing rules of Social Security and Medicare.  While SS taxes are eliminated once an individual reaches the income-level of $168,600, Medicare taxes rates increase for high-income folks.  Specifically, a single individual must pay 2.35% on income (minus health insurance costs) beyond $200,000/year.  For those married filing jointly, this number is $250,000.  So, for example, imagine a single person earns a total income of $300,000 and pays $10,000 for health insurance premiums.  The remaining $290,000 will be subject to two different Medicare tax rates.  The first $200,000 is taxed at 1.45%, while the remaining $90,000 is taxed at 2.35%.  All told, they will pay $5,015 in Medicare taxes.  

  Social Security and Medicare taxes are important as they impact your bottom line, but there's not much you can do about these taxes.  So there is little personal value in learning more than what I've just told you. 

11.2 Retirement Benefits

            Eligibility for retirement benefits (i.e. “Old Age” Benefits) of SS is based on the number of Social Security credits that you have earned.  The bar is low to get something when you are older, so eligibility is unlikely to be an important concept for a typical U.S. citizen.  To be eligible for old-age benefits, you must earn 40 SS credits over the course of your career.  A credit is awarded when you earn at least $1,730 in SS eligible income in a year.  But you can only accrue a maximum of four credits per year and you cannot earn fractions of a credit.  A college student might earn $2,500 working a summer part-time job. Unless something screwy happens, they will earn one credit.[3]  Full-time workers will invariably earn four credits every year.  Thus, ten years of full-time work should get you to the forty-credit threshold.  Note that these credits do not directly determine how much you will receive in old age benefits; rather, they just determine if you will receive anything. 

            Credits also affect your ability receive other SS benefits—survivorship and disability—but the criteria is much more complex.  The rules are absurdly complex.  Let’s take a look at the eligibility requirements for someone that is aged 24 to 31 that becomes disabled. 

I like the juxtaposition of “in general” with a complex and detailed explanation to follow.  And even with the specifics provided, the administration is non-commital; such a person "may" receive benefits.    Eligibility for disability and survivorship benefits will be re-examined later.

11.3 The Math of Social Security

Disclaimer:  As will soon become obvious, SS is a mess.  I’m going to do my best to give you the important details, but please keep in mind that I’m merely offering an overview.  If you are 62 years-old and hoping to get a full picture, this probably isn’t going to be adequate. 

            At some point, in your sixties, you will start receiving monthly SS retirement payments.  The dollar-amount that you receive is based on how much you earned (and thusly paid in SS taxes) during your working years, the number of years that you worked, and the age at which you elect to begin collecting SS payments.  That’s a simple explanation.  Let’s add some details.

            To determine the “old age” or “retirement” benefit that one receives, the SSA calculates the averaged indexed monthly earnings (AIME) for each person.  AIME is the inflation-adjusted average SS eligible income that a person earned over the course of their highest-paying 35 years.  Hmm.  We need an example.  Suppose you work 42 years before fully retiring.  The SSA has been tracking your earnings and SS taxes and will assess the 35 years in which you earned the most SS eligible income (and paid the most SS taxes).  These 35 years will be adjusted for inflation and then averaged.  Maybe you earned an average of $60,000/year.  To make this monthly, we divide by 12 to find your AIME is $5,000.  For someone that only worked 30 years, the SSA will still use their top 35 years of earning, meaning that such a person will have five years of no income incorporated into their average.  There is sometimes a relatively large incentive to keep working to get the full 35 years (and to quit working thereafter). 

           Those that earn more over the course of their career have, generally, paid more in SS taxes during their working years and will subsequently receive more in SS retirement benefits, but AIME is not the ending point.  After calculating your AIME, the SSA will then solve for your primary insurance amount (PIA), by running your AIME through a simple formula, which uses the table provided below.[4]  The PIA shows how much the person will receive if they retire at exactly age 67, which is called the full retirement age.  The table below is adjusted annually to account for inflation, but once you stop working and your PIA is applied, it is fixed for the rest of your life.[5]

We can use the table above to convert AIME into a PIA.  For example, if someone has an AIME of $1,000, their primary insurance amount would be $900—they would be paid $900/mo if they retire at 67.  This is found by multiplying $1,000 by 90%.  Note that this is a marginal system, so someone with a $2,000 AIME will still receive a 90% payout on the first $1,174 of their AIME and a 32% payout on the remaining $826. You should find that this person has a PIA of $1,320.92. 

                The numbers $1,174 and $7,078 are often referred to as bend points and can help current workers assess their incentives to keep working.  Why?  Well, if your AIME rises from $6,900 to $7,000, your marginal payout percentage on that extra $100 dollar in AIME is $32--you will earn an extra $32 every month after full retirement.  However, if your AIME rises from $7,100 to $7,200, your PIA will only increase by $15.  Some workers that are making the difficult decision of whether to retire might decide to work until they’ve reached a PIA of $7,078 since the benefits of continuing to work suddenly plummet once this bend point is reached.  Let’s take a look at PIAs at various levels of AIME.

           The table above indicates the PIA for given levels of AIME.  For practice, you might try solving for PIA given the AIME provided.  You should note that increases in AIME lead to disproportionately small increases in PIA.  For example, a person with an AIME of $6,000 has paid three times more SS taxes than someone with an AIME of $2,000, yet their benefits are less than twice as large.  As your SS taxes rise, your benefits will also rise, but the gain in benefits shrinks as your AIME rises.  This makes SS a great deal for low-earners, but a bad deal for high earners.  As such, you (who probably will be high earner) should do what you can to avoid SS taxes by taking advantage of your HSA (and other relevant health insurance contributions).  By maxing-out your HSA, you get to avoid SS taxes substantially, while only slightly reducing your PIA.

            Finally, we can consider the final component of solving for one’s SS retirement benefit—the age of retirement.  The word “retirement” here is a misnomer.  You do not have to quit working to “retire” in the eyes of SS; rather, SS retirement indicates when you decide to start taking retirement benefits from SS.  One can be fully employed while simultaneously “retired” for SS purposes.  You may declare SS retirement as early as 62 or as late as 70.  If you retire before 67, SS calls this “early retirement”.  After 67 is “late retirement”.  The earlier you retire, the more years you will have to collect benefits.  As such, your monthly payment will be lower if you retire early.  If you retire late, you will have a higher monthly payment.  Remember that age 67 is “full retirement” age; if you retire at exactly age 67, you will receive your PIA.  If you retire at any other age, there will be an age adjustment.  The exact details are a mess.  Here’s a snippet regarding early retirement:

I wouldn’t bother memorize those details (or even learning them at all). There is a good chance these intricate details will change before you reach your sixties.  But, to give you a taste of how age affects retirement payments, consider the following.  If you retire at 62, your benefits will be 30% lower than someone retiring at 67.  If you retire at 70, your benefits will be 24% higher than someone retiring at age 67.  Life expectancy should be the primary determinant of your selected retirement age.  If you have a terminal illness, it’s probably best to “retire” at 62.  If you are very healthy and your parents lived to 100, wait until 70.  Let’s review.

Steps for Solving for SS retirement benefits

1.       Solve for your averaged indexed monthly earnings (AIME), which is based on your highest 35 years of SS eligible income.

2.       Solve for your primary insurance ammount (PIA).  Use the table provided above (or find the info online) to convert your AIME into a PIA.  The PIA is your monthly retirement benefit if you retire at 67.

3.       Make age adjustments.  You can retire as young as 62 (30% reduction of payment amount relative to PIA) and as late as 70 (24% increase in payment amount relative to PIA).

11.4 Disability Benefits

            Social Security retirement benefits get all the attention.  When I first started teaching Personal Finance, I didn’t even know that SS provided disability and survivorship benefits.  It makes me mad that I got a Ph.D. in Economics and was never exposed to this stuff.  Anyway, let’s talk disability.  The SSA aims to protect vulnerable populations, such as the disabled.  If you have a disability that is deemed appropriate by the SSA and the requisite work history, you can qualify for monthly SS payments, much like a retiree would receive. 

            What disabilities are covered?  I know this is going to shock you… it’s complicated.[6]  But if you are truly disabled to the point of losing the capability to work, you should be able to receive benefits (but you must formally apply).  Here is the exact wording provided by the SSA: “Your condition must significantly limit your ability to do basic work-related activities, such as lifting, standing, walking, sitting, or remembering – for at least 12 months. If it does not, we will find that you do not have a qualifying disability.”[7]  Fair enough.  Even if you work, you might be eligible.[8] 

            Unless you are applying for disability, it’s probably unnecessary to dive into the details.  Instead, let’s focus on what’s actionable… the “why you should care” part.  Suppose you are a single parent and the sole income-earner for yourself and three children.  If you become disabled, your kids’ livelihoods are in serious jeopardy.  To control risk, you can buy disability insurance so that your children will not starve if you become disabled.  To determine how much insurance you need, you should first determine what SS will provide.  That’s an extreme situation.  But if there is anyone that depends on your income, disability insurance should be a consideration.  We need to see what SS offers to determine if more disability insurance should be purchased.

            So how much SS benefit will you receive if you become disabled?  It depends (argh!).  Like retirement benefits, disability insurance benefits are based, in part, on AIME and PIA.  But, given that one could become disabled at an early age, adjustments must be made.  I am simplifying to a comical degree, but here is the idea… The SSA considers your working history between age 22 and the time of disability to project what your PIA would have been come retirement age.  This synthetic PIA is used to appoint your monthly disability payment.  The more you earned each year (and paid in taxes) prior to disability, the greater benefit you will receive.  If you want a more thorough explanation, see the footnoted link.[9] 

            Disability benefits convey not only to the disabled individual but may also be awarded to the spouse and children of the disabled.  And, in the case of a break-up, the other parent with whom the newly disabled had a child may also be eligible.  If Oscar de la Hoya becomes disabled, his four “baby mamas” and six children, all stand to earn disability payments on his behalf.[10]  Children of the disabled are eligible for benefits, typically, until age 18.  The other parent of said children (spouse or otherwise) earn benefits while the children are 16 and under and may be eligible for benefits to kick back in when they turn 62.  It’s a mess, but you would be very thankful you have disability insurance if you need it.

11.5 Survivorship Benefits

            The SSA also provides a version of life insurance that they call “survivorship benefits”.  If you become disabled, you, your kids, and your kids’ parent (spouse or otherwise) may receive payments.  If you die, the same benefits apply except your dead carcass would get nothing.  This is probably even more important than disability benefits.  You will likely need (or want) life insurance at some point in your life.  To know how much life insurance to buy, you should first assess your potential survivorship benefits.  Since we already addressed disability, there’s not a whole lot to discuss.  But, as an example, if I were to die right now, my wife would get a monthly payment until my children are 16, and my kids would get a monthly benefit until 18 (which my wife would directly receive on their behalf).  If my wife and I both die, the kids would get even more. 

11.6 Using SSA.gov to determine your benefits

  Thankfully, the SSA makes things easy for us.  You should open an account at SSA.gov and start digging into your SS data.  There you will find your SS income history, credits-earned, and information about your potential benefits.  Setting up an account is easy and free.  If you have no working history, there won’t be much info on your account. Here is some content from mine to give you an idea of what’s provided.  From your readings, you should be able to interpret why each image is useful in analyzing my SS situation. You might try to assess the importance of each image before reading the caption.

1.       I’ve reached 40 credits. 

Yay. This means that I will receive retirement benefits.  Remember that having more credits does not directly affect your retirement benefits.    

2.    Here are my SS earnings and Medicare earnings.  

How do these numbers differ from my total income for each year?  Remember that contributions towards an employer-offered health insurance plan reduce your SS and Medicare taxes.  So, the SS and Medicare earnings provided are found by taking my total working income minus any health insurance costs that I pay.  Note that I was employed by my university as a full-time student from 2008 to 2012.  While I earned income, these earnings are (uniquely) non-taxable for SS and Medicare.  If I were to stop working today, my eventual SS retirement benefits would be very small since AIME is based on your top 35 years of income.  Since I only have 11 years of significant earnings, 24 years of no-earnings would be averaged into my AIME value.

3.     Social Security and Medicare taxes that I have paid so far during my lifetime, which has been matched by my employers.

4.     Estimates of my future SS retirement benefits at different retirement ages if my annual SS earnings from now until 67 match my 2023 income. 

5.      Disability benefits.

If I become disabled, I am immediately entitled to $2,952/mo in SS disability payments.  My wife and kids would also receive payments.

6.      Survivorship Benefits.  

I don’t plan to die anytime soon, but it’s nice to know my wife and kids will be compensated if I do. 

11.7 Conclusion

            A combination of events put the future of SS into jeopardy.  Firstly, there are loads of older people now—the “baby boomers” generation has retired and are now collecting SS payments, leading to unprecedented payments of retirement benefits.  Secondly, birth rates have declined, meaning that there will be fewer future workers to tax.  Third, the US government has been spending SS taxes on other things.  As a result, the SS fund is severely depleted.  Without changes, the SS fund will not have enough money (via taxes and savings) to fully compensate its members.[11]  What will happen to SS?  Who knows.  Some have proposed making SS payments needs-based, so that high net-worth individuals would receive reduced SS benefits.  Others propose increased SS tax rates or increasing the full retirement age.  We can only guess what the future holds.  But I think it’s reasonable to prepare for the possibility that your SS benefits will be smaller than current retirees receive.  I’m personally saving and investing a bit more, just in case. 

End Notes


[1] The term “eligible income” is just what I’m calling it here.  SS does not tax all of your income, nor is SS based on gross income, adjusted gross income, or any other term that is commonplace to personal finance.  Frankly, I don’t know what the hell to call it.

[2] This is complicated and irrelevant for most.  But if your income is that high (congratulations), you can learn more here:  www.irs.gov/businesses/small-businesses-self-employed/questions-and-answers-for-the-additional-medicare-tax

[3] If you get paid “under the table”, you will pay no taxes and earn no credits.  And possibly get in big trouble (this is rare tbh).  Similarly, if you are hired as a “contract worker”, it is your responsibility, not the employer, to pay your SS and Medicare taxes when you file your taxes.  Many low-paid part-time workers choose to just not pay taxes and will earn no SS credits.  This is a bold and (usually) illegal strategy. 

[4] I made this table.  If you look online, you will see this explained in various ways, most of which are really confusing in my eyes.  But I’m kind of dumb so maybe it’s just me.

[5] If you keep working, your AIME may continue to rise and thusly your PIA could also increase. 

[6] Link to SSA’s discussion on this:  www.ssa.gov/disability/professionals/bluebook/listing-impairments.htm

[7] Source. 

[8] Source. 

[9] Source. 

[10] Is baby mama an offensive term?  I’m honestly asking. 

[11] Source. 

Key Terms

Average Indexed Monthly Earnings:  The starting point for calculating retirement benefits.  The SSA averages your monthly earnings over your best 35 years and makes necessary inflation adjustments (i.e. “indexed”).  This value effectively shows your average income each month while you were working. 

Bend Point:  When a person increases their AIME, their PIA also increases.  But, the increase in PIA suddenly drops when a peron’s AIME rises to

Disability Benefits:  One of the three SS benefits.  If a person becomes disabled and cannot work, they may be eligible to receive monthly disability payments through SS.

Early Retirement:  When you start collecting SS retirement benefits before 67, you are deemed to have taken “early retirement”.  The earliest one can “retire” for SS purposes is 62.

Full Retirement:  Retiring at exactly age 67 (and zero months).  There’s nothing special about full retirement, but it’s a term that gets used a lot.  If you retire at age 67, your monthly retirement benefit is your PIA.

Late Retirement:  When you start collecting SS retirement benefits after 67, you are deemed to have taken “late retirement”.  The latest one can “retire” for SS purposes is 70.

Medicare:  A government system where current workers pay a small tax, which is used to pay for (or subsidize) medical costs for the elderly.

Primary Insurance Amount:  The SSA runs your AIME through a fixed table to solve for your PIA.  Your PIA is a dollar-value that shows how much you will be paid in monthly retirement benefits if you retire at age 67.

Retirement Benefits:  One of the three SS benefits.  SS benefits are paid to those that earned at least 40 credits when working.  Retirement benefits can start as early as 62 or as late as age 70.

Social Security:  I’m not defining SS here.  Read the chapter.

Social Security Credits:  A worker can earn up to four credits per year by working and paying SS taxes.  One must earn at least 40 credits to earn retirement benefits.  Credits are also relevant in determining disability and survivorship benefits.

Survivorship Benefits:  One of the three SS benefits.  If a person dies, their kids and surviving parent of said kids, may be eligible to receive monthly survivorship payments.  This is effectively a form of mandatory life insurance.

 

Practice Problems

a.       How much will he pay in Social Security taxes?

b.       How much will he pay in Medicare taxes?

a.       How much will he pay in Social Security taxes?

b.       How much will he pay in Medicare taxes?

a.       When will she pay her SS taxes?

a.       When will she pay her SS taxes?

 

 

Selected Solutions

a.       How much will he pay in Social Security taxes?

 SS Income = $65,000 - $1,500 - $5,000 = $58,500


 SS Taxes = $58,500(.062) = $3,627

 

b.      How much will he pay in Medicare taxes?

SS Income = $65,000 - $1,500 - $5,000 = $58,500      

SS Taxes = $58,500(.0145) = $848.25

SS Income = $100,000 - $2,500 - $8,000 = $89,500

SS Taxes = $89,500(.062) = $5,549

  She will reach the SS tax limit. 

  SS income = $168,600

  SS taxes = $168,600(.062) = $10,453.20

a.       How much will he pay in Social Security taxes?

He must pay double SS taxes since he is self-employed.  Since his health insurance is private, he will not get a direct SS tax break from this.

SS Income = $118,000

SS Taxes = $118,000(.124) = $14,632

b.      How much will he pay in Medicare taxes?

Same rules apply.  He must pay double compared to an employed person.

SS Income = $118,000

SS Taxes = $118,000(.029) = $3,422

 No.  Generally, the more SS “tax” you pay, the greater your future benefits will be.  So, it may be better to think of SS as a (pretty crappy           investment rather than a tax.

 Yes.  The money you pay is gone and does not directly benefit you.  It’s just like an income tax.

 35 years.  This is the basis for AIME.

 Monthly average of your best 35 years.

 Yearly average = $80,000

 AIME = $80,000/12 = $6,666.67

 We need to average in seven years of no income since the best 35 years are counted.  They had income for only 80% of the years.

 Yearly Average = .8(80,000) = $64,000

 AIME = $64,000/12 = $5,333.33


Read the book!

Read the book!

 Two.  Remember that you cannot earn a portion of a credit.  She needs $1,730 in income to earn a credit, $3,460 to earn two credits, and $5,190 to earn three.  She earns two.

a.   When will she pay her SS taxes?

 As she earns.  Her employer should withhold her SS taxes.  In other words, she doesn’t need to anything herself, her employer will pay her taxes.  To be clear, Erika still pays the taxes (it comes out of her paycheck), but, logistically, she doesn’t have to do any work.

 Two.  Same logic applies as in question 12. 

a.   When will she pay her SS taxes?

 When she files.  Since she is self-employed, she has to take care of this herself.  Keep in mind she will have to pay twice as much as Erika from question 12.

 Zero.  This is an obscure rule.  Full-time college students that are employees of their college typically do not pay SS taxes unless they have a traditional full-time role with the college.

 PIA = $1,928.92

 PIA = $1,928.92

 Reduce by 30%

  Payment = $1,928.92(.7) = $1,350.24

 PIA = $1,928.92

       Increase by 24%

  Payment = $1,928.92(1.24) = $2,391.86

 PIA = $3,249.18

 Reduce by 30%

 Payment = $3,249.18(.7) = $2,274.43

My wife will earn monthly payments until the kids are 16.  The kids will earn payments until they are 18.  (My wife may also get payments on my behalf again at age 62).

Pretty much the same answer as Question 19, except I also will receive monthly payments.