# What is the formula for calculating my Social Security benefits?

## What is the formula for calculating my Social Security benefits?

We base Social Security benefits on your lifetime earnings. We adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Then, Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most.

Is Social Security calculated on gross or net income?

When reporting your wages, Social Security requires that you report your gross income — the amount you’ve earned before any deductions were taken from your paycheck. Social Security looks at gross income to determine whether you’re meeting or exceeding substantial gainful activity (SGA).

How are the benefits of Social Security calculated?

The sum of those three figures is your PIA, also known as your “full retirement benefit.” The sliding scale is designed to weight the benefit to help low-wage earners, who need retirement money the most. Finally, Social Security plugs in the age at which you claim benefits.

### How is the pia calculated for Social Security?

Essentially, the PIA is the sum of three parts of your AIME. For instance: In 2017, retirees get 90 percent of the first \$885 of the AIME, plus 32 percent of any AIME dollars between \$885 and \$5,336, plus 15 percent of AIME amounts above \$5,336.

How are bend points used to calculate social security?

Bend points from the year you turn 62 are used to calculate your Social Security Retirement Benefits. The example in the table below uses 2020 bend points. It works like this: You take 90% of the first \$906 of AIME. You take 32% of the next \$5,785 of AIME. You take 15% of any amount over that \$5,785.

How to calculate your Aime for Social Security benefits?

How to Calculate Your AIME for Social Security Benefits A B C D E 2013 60 45000 44888.16 1 2014 61 45000 44888.16 1 2015 62 – 44888.16 1