What is the calculation of benefits from the u.s social security program?

Expert Solution

Below are the steps to calculate your social security -

Your average indexed monthly earnings or AIME are calculated as the average of your 35 highest-earning inflation indexed years, divided by 12. To calculate your AIME, the SSA takes each year of earnings throughout your working lifetime, up to the Social Security taxable maximum. Then, each year's earnings are adjusted for inflation, or "indexed
Your AIME is applied to the Social Security benefit formula, using the bend points that were in effect for the year in which you turned 62
Any applicable cost of living adjustments are applied to your PIA, based on the year in which you actually claim your retirement benefit
To determine your PIA, your average indexed monthly earnings are applied to a formula. For 2018, the formula is:

90% of the first $895 in AIME

32% of the amount of AIME greater than $895, up to $5,397

15% of the amount of AIME greater than $5,397

Finally, if you choose to start your benefits at any age other than your exact full retirement age, your monthly benefit will be adjusted up or down.

ekkarill92 answered 1 year ago

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