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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.
The Social Security benefits formula is what the government uses to determine your primary insurance amount (PIA). That's the benefit you're entitled to if you sign up at your full retirement...
We illustrate the calculation of retirement benefits using two examples, labeled case A and case B. In each case, the worker retires in 2025. Case A, born in 1963, retires at age 62. Case B, born in 1959, retires at his normal (or full) retirement age.
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.
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...
You can use Social Security's benefit calculators to: Estimate your retirement benefits based on when you would begin receiving them (from age 62 to 70) Calculate what payments you would receive based on your earning history. Find out your full retirement age. Learn about earning limits if you plan to work while receiving Social Security benefits.