Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then the Social Security Administration calculates your average monthly indexed earnings during the 35 years in which you earned the most. The Social Security Administration applies a formula to these earnings and arrives at your basic benefit, or "primary insurance amount" (PIA). This is the amount you would receive at your full retirement age.
As you can see from the above, the benefit computation is complex and there are no simple tables that we can give you that will tell you how much you will receive. However, there are several ways you can find out how your Social Security retirement benefit is figured:
- Request a Social Security Statement. You can make your request over the Internet and the Social Security Administration will mail you a detailed report of your lifetime earnings and an estimate of Social Security retirement, disability and dependent benefits: www.ssa.gov/statement.
- Compute your own Social Security benefit estimate using a program that you can download from your PC: www.ssa.gov/OACT/ANYPIA/anypia.html.
- How Your Retirement Benefit Is Figured is a publication that walks you through the formula for computing your retirement benefit: www.ssa.gov/pubs/10070.html.
- See examples of how Social Security benefits are computed at www.socialsecurity.gov/OACT/ProgData/retirebenefit1.html.