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The formula for calculating your PIA is based on the average indexed monthly earnings, or AIME, in your 35 highest-earning years after age 21, up to the Social Security wage base.
Monthly Social Security benefits at full retirement age are determined through adjusting AIME by multipliers at specific earnings thresholds, which are called "PIA bend points". Accordingly, the PIA is the sum of three separate percentages of portions of estimated AIME. [6]
Social Security's benefit formula provides 90% of average indexed monthly earnings (AIME) below the first "bend point" of $791/month, 32% of AIME between the first and second bend points $791 to $4781/month, and 15% of AIME in excess of the second bend point up to the Ceiling cap of $113,700 in 2013. [171]
Each calendar year, the wages of each covered worker [a] up to the Social Security Wage Base (SSWB) are recorded along with the calendar by the Social Security Administration. If a worker has 35 or fewer years of earnings, then the Average Indexed Monthly Earnings is the numerical average of those 35 years of covered wages; with zeros used to ...
The actual Social Security retirement benefit calculation is quite complicated, involving average indexed monthly earnings (AIME) "bend points," and other intricate formulas.
From there, Social Security applies a formula using bend points (which change annually) ... Claiming Social Security at 62 would reduce your monthly PIA by 30%; delaying benefits until 70 would ...
When calculating based on the year of eligibility, the year in which the beneficiary was eligible for both a Title II Social Security Benefit and the non-covered pension. The following chart shows the percentages applied before the first bend-point based on the first year the beneficiary was eligible for both: [3] 1986| 80% 1987| 70% 1988| 60% ...
Image source: Getty Images. 1. Social Security's 2025 cost-of-living adjustment (COLA) For months, there's been speculation about next year's Social Security COLA.