Question

How are Social Security benefits calculated for married couples (your explanation should include a definition of the terms AIME and PIA)? Explain the equity considerations of this system (who gets the best and worst returns on their taxes paid into the system with respect to income and marriage)?

Answer 1

Social Security benefits calculated for married couples :

-> Social security benefits depends not only on life expectancy but also joint life expectancy. The big mistake of married couples in deciding when to take take this socail security benefit is they view the decision as if they were single which is the main factor to look the break even age.

->social security benefits are depends upon below factors :

1.Impact of spousal and survivor benefit

2.Eligibility for spousal and survivor benefit

3.social security taxes

4.Earninngs test

5. Calculate and then claim.

-> Socail security benefit is generally calculated using AIME(Average indexed monthy earning). This formula is used to compute primary insurance amount(PIA)

->AIME and PIA briefly describes the different types of beneficiaries paid by Social Security. it inclues Retired worker benefit ,Spouse of retired worker and child of retired worker.

Equity considerations of this system :

According to the Social Security Administration, the average retired worker will receive a monthly benefit of $1,404 in January 2018. However, it's possible to get much more if you delay retirement or earn a relatively high salary throughout your career.

For 2018, the maximum monthly benefit payable to a newly retired worker at their full retirement age will be $2,788. In order to get this, the worker would need to have earned more than the taxable maximum earnings for at least 35 years. Furthermore, if a worker entitled to the maximum benefit chose to wait until age 70, it would produce a maximum monthly benefit of $3,680.

To be clear, if you're still working and haven't claimed your Social Security retirement benefit yet, there's no way to tell you with 100% accuracy how much you'll get.

However, the best estimate of your future benefits can be obtained by viewing your annual Social Security statement, which is available by creating an account and logging in to official SSA forum.On your annual statement, you'll find a Social Security benefit projection based on your actual work history, in addition to other valuable information such as eligibility and estimates for disability and survivors benefits.