Social Security benefits are typically computed using "average indexed monthly earnings." This average summarizes up to 35 years of a worker's indexed earnings. We apply a formula to this average to compute the primary insurance amount (PIA). The PIA is the basis for the benefits that are paid to an individual.
Social Security benefits depend on earnings
The amount of a person's retirement benefit depends primarily on his or her lifetime earnings. We index such earnings (that is, convert past earnings to approximately their equivalent values near the time of the person's retirement) using the national average wage index.
Your monthly Social Security benefit is determined by four main factors: your work history, your earnings history, your birth year, and your claiming age.
Many people wonder how we figure their Social Security retirement benefit. We: Base Social Security benefits on your lifetime earnings. Adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received.
The average person collecting a retired worker benefit from Social Security receives $1,905.31 a month, according to the 2024 Social Security Statistical Supplement. However, the average 69-year-old beneficiary gets $1,945.18 -- about $40 more per month than the average retired worker.
The first three digits are the area number. The next two digits are the group number. The final four digits are the serial number.
After you've adjusted your income for inflation, total up the income from your 35 highest-earning years. If you didn't earn income in at least 35 years, then total your income for all the years you've worked. Next, divide this total by 420 -- the number of months in 35 years -- which will give you your AIME.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits only when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
How much will I get from Social Security if I make $100,000? If $100,000 is your average income over 35 of your highest-earning working years and you plan to max out your benefits by collecting when you turn 70, you can expect to get about $3,253 per month from Social Security.
Taxes aren't determined by age, so you will never age out of paying taxes. People who are 65 or older at the end of 2024 have to file a return for tax year 2024 (which is due in 2025) if their gross income is $16,550 or higher.
There is no fixed minimum benefit for those with 40 credits, as the amount is calculated based on the average indexed monthly earnings (AIME) over your 35 highest-earning years. For those with low lifetime earnings, there is a special minimum benefit.
Individuals could apply at any office, so the area number was not an indication of where they lived or worked. This changed in 1972 when the Social Security Administration began issuing SSN's from its Baltimore headquarters and assigning area numbers based on the applicant's mailing address.
The middle two digits, group number, range from 01 to 99. Even before SSN randomization, the group numbers were not assigned consecutively in an area. Instead, for administrative reasons, group numbers were issued in the following order: odd numbers from 01 through 09. even numbers from 10 through 98.
It takes your State about 9 weeks to notify the Social Security Administration (SSA) about your baby's birth. After the birth is registered, SSA will issue your baby a Social Security number. The card will be mailed to you about one week after SSA is notified by the State of your baby's birth.
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.
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Your monthly benefit is calculated as a percentage of your average lifetime earnings. 2. Second, the Social Security benefit formula is progressive. This means that - as a percentage of pre-retirement income - the monthly benefit that a low-income earner receives will be more generous than that of a high-income earner.
You currently have fewer than the 40 credits needed to become fully insured for retirement benefits. You can still earn credits and become fully insured if you work. We cannot pay you benefits if you don't have enough credits.
If you become disabled before your full retirement age, you might qualify for Social Security disability benefits. You must have worked and paid Social Security taxes in five of the last 10 years.