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How Social Security Benefits Are Calculated

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 SSA then 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, for most people, age 65. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. For more information, see

As you can see from the above, the benefit computation is complex and there are no simple tables that we can present that will tell you how much you will receive. However, there are several ways you can find out how your benefit is figured:

  1. Request a Social Security Statement. 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 retirement, disability and dependent benefits:
  2. How Your Retirement Benefit Is Figured, A publication that walks you through the formula for computing your retirement benefit:

The Social Security Administration has not approved, endorsed, or authorized this material. Contact the Social Security Administration for complete details regarding eligibility for benefits.

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