Have you ever learned that something you have heard, read, or been taught turned out not to be true? Here are three multiple choice questions. Let’s see if what you think the answer should be turns out not to be the case.
The Social Security Administration paid out over $60 Billion in SSI payments in fiscal year 2016. SSI is:
a. Social Security Income for the unemployed,
b. Social Security Income for people with disabilities,
c. Welfare payments for elderly and disabled individuals with limited financial resources.
What percentages of the Congressional Budget Office’s August 2016 Baseline Budget Forecast is allocated to National Defense? To Medicare and Medicaid? To Social Security?
Individuals reach the age of consent (legal age) when they turn 18. They can vote, own property, join the military, all without parental consent. What can’t they legally do until they are 21?
a. Buy alcoholic beverages,
b. Have their own credit card without a co-signer or proof of financial independence,
d. Get married in Mississippi,
e. All of the above
The U.S. stock market as measured by the S&P 500 has its ups and downs every year. What is the average percentage intra-year decline since 1980?
Okay, now for the answers:
c. Although most of us thought that SSI stands for Social Security Income, it is actually an acronym for Supplemental Security Income and is not part of Social Security. It is a Federal income supplement program funded by general tax revenues (Not Social Security Taxes). SSI is designed to help aged, blind, and disabled people who have little or no income and provides cash for food, clothing, and shelter. Congress started SSI back in 1973 when it took over State welfare programs for poor folks over age 65 and for the disabled. Congress gave the Social Security Administration the job of administering SSI. SSI recipients are also categorically eligible for food stamps and Medicaid. Another program the Social Security Administration administers is SSDI, aka Social Security Disability Insurance. It provides income assistance to the disabled. Unlike SSI, SSDI is funded by Social Security Taxes and is only available to individuals with a long enough work history who paid Social Security taxes.
a. There is a lot of misconception regarding the percentage of the Federal Budget that pays for national defense and intelligence. You can find reports online claiming it to be over 50%, but that 50% is misleading because it only applies to 30% of the total budget. National Defense and Intelligence spending captures about 15% of the total Federal budget, while Medicare and Medicaid gets 27% and Social Security gets 24%.
e. All of the Above. When your pride and joy turns 18, he or she is suddenly old enough to fight for our country, vote for whomever they want in local and national elections, own property, get married in all states except Mississippi, and have their own bank account in all states. However, they are not allowed to buy alcohol in any State and not allowed to gamble in most states.
d. The average intra-year drop over the past 37 years is 14.2%. The smallest and biggest declines were in 1995 (down -3%) and 2008 (down -49%).
Kenneth B. Petersen CFP®, EA, MBA, AIFA® is an investment advisor and Principal of Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investing, taxes, retirement, or estate planning. Send your questions to: Ken Petersen, 2340 Garden Road Suite 202, Monterey, CA93940 or email them to firstname.lastname@example.org.