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The Social Security benefits formula is used to calculate your primary insurance amount. The formula is based on your average monthly earnings over your 35 highest-earning...
The basic Social Security benefit is called the primary insurance amount (PIA). Typically the PIA is a function of average indexed monthly earnings (AIME). We determine the PIA by applying a PIA formula to AIME.
We illustrate the calculation of retirement benefits using two examples, labeled case A and case B. In each case, the worker retires in 2024. Case A, born in 1962, retires at age 62. Case B, born in 1958, retires at his normal (or full) retirement age.
Oct 10, 2018 · The formula breaks down your average monthly wage into three parts. In 2024, it is: 90 percent of the first $1,174 of your AIME; plus 32 percent of any amount over $1,174 up to $7,078; plus 15 percent of any amount over $7,078. The sum of those three figures is your PIA, also known as your full or basic retirement benefit.
Apply a formula to these earnings and arrive at your basic benefit, or “primary insurance amount.” This is how much you would receive at your full retirement age — 65 or older, depending on your date of birth. Even if you aren’t near your full retirement age, you can plan for retirement now.
May 17, 2023 · The Social Security Benefits Formula. Social Security calculates your benefits by tallying up the earned income you made in your top earning years and applying some simple arithmetic. To see...
Jun 6, 2024 · The Social Security benefits formula is designed to replace a higher proportion of income for low-income earners than for high-income earners. To do that, the formula uses what are called “bend points," which are adjusted for inflation each year.
