Question

The actuarial adjustment in Social Security refers to

Group of answer choices
a) the amount by which Social Security benefits are adjusted for individuals who are married as opposed to single.
b) the amount by which one's annual Social Security benefits are reduced if one has labor earnings above a certain amount in a given year.
c) the amount by which annual Social Security benefits are adjusted relative to the primary insurance amount when one begins claiming benefits at an age other than the full retirement age.
d) the amount by which one's Social Security benefits are reduced due to federal, state, and local taxes.

Answer 1

The actuarial adjustment in Social Security refers to the adjustments made to the benefit amount based on the age at which a person starts claiming those benefits. Hence, the correct answer is option C.

Step-by-step explanation:

The actuarial adjustment in Social Security refers to (c) the amount by which annual Social Security benefits are adjusted relative to the primary insurance amount when one begins claiming benefits at an age other than the full retirement age. This adjustment is necessary because the starting age for receiving benefits affects the total period over which the benefits are likely to be paid.

For those who choose to retire earlier than the full retirement age, the benefits are reduced to account for the longer payment period, while delaying benefits past the retirement age can lead to increased payments, reflecting the shorter time span over which benefits are expected to be received.