Your Social Security Advisor

How Is My Benefit Amount Determined? – Ask Rusty

social security-rusty-marry-girlfriend social security benefits benefit increase medicare benefits retireeDear Rusty: I am 60 years old. I have worked full time since age 22. I am thinking about working part-time ages 62-65.  When I start collecting my social security benefit sometime after age 65, will my monthly amount be based on only the last few years of my working? Can you please explain how my monthly amount will be determined?  Signed: Planning My Future

Dear Planning: I admire that you’re thinking ahead to your retirement years and I’m happy to clarify this for you. Your Social Security benefit, when you claim it, will be based upon the highest earning 35 years of your lifetime working career (not only the last few years). To determine your benefit, Social Security will take your entire record of lifetime earnings, adjust each year for inflation, and select the 35 years in which you had the highest earnings. After totaling those years they’ll divide by 420 (the number of months in 35 years) to determine your “average indexed monthly earnings” (AIME). They then break your AIME into several parts (using what’s known as “bend points”) and then take a percentage of each part and add it up to arrive at what’s called your “primary insurance amount” or “PIA.” The “bend point” values change each year, but for 2019 they are $926 and $5583. To compute your benefit, the formula will take 90% of the first $926 of your AIME; 32% of your AIME between $926 and $5583; and 15% of any amount of your AIME over $5583. The product of those three computations are added together to arrive at your PIA.

Your PIA is the amount you will get at your full retirement age, or your “FRA,” which for you (born in 1959) is 66 years and 10 months. If you claim any earlier than your FRA, your benefit will be reduced – about 29% less if claimed at 62. If you wait beyond your FRA the benefit will be more – 8% more for each year you delay, up to age 70 when maximum is reached. At age 70 your benefit will be about 25% more than it would be at your FRA. But a note of caution: any benefit estimates you have now from Social Security assume you’ll keep earning at your current level until you reach your FRA, so if you work part-time starting at age 62 your benefit amounts will be less than those shown in the current estimates.

Finally, the above applies to your own individual SS retirement benefit from your own lifetime work record. If you are married, and your PIA is less than 50% of your husband’s PIA, then you might also be eligible for a spousal boost from your husband. Or if you are the higher earner, your husband might be eligible for a spousal boost from you when you claim your Social Security benefit.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website ( or email us at [email protected].

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Paul Lorentz
2 years ago

Very interesting and informative article. However, It leaves one question unanswered. What is a “spousal boost”, how is it calculated and how does it effect each spouses SS benefit.

2 years ago
Reply to  Paul Lorentz

The spousal boost at full retirement age (FRA) is the difference between the lower-earning spouse’s benefit at FRA and 50% of the higher-earning spouse’s benefit at FRA. The spousal boost is reduced if taken before one’s full retirement age. The spousal boost amount is added to the spouse’s own normal SS retirement benefit amount to arrive at the total benefit amount as a spouse. The higher earning spouse’s benefit is not affected.

Katie Walden
2 years ago

That is the most complete explanation of calculating s.s. benefits that I have ever read. Thank you.

2 years ago
Reply to  Katie Walden

The explanation provided is also completely accurate. Remember, SS was designed, like the German system of the time it was largely copied from, by government bureaucrats to achieve two goals. To both collect additional tax revenues for the federal government (primary goal instated to the public) and also as a convoluted sort of partial, emphasis on partial, supplemental retirement system (secondary goal, which is how it was marketed to the public to win approval). Where only approximately 50 percent of those contributing into the system would ever likely live to collect anything from the system as originally envisioned. Which is why the full retirement age of 65 was established at the time the SS program was created. That was the average lifespan in America at the time.

Like all government designed programs, the methodology employed to calculate anything is overly complex for the intended purpose. That is just typical of government in general. We would refer to that as a bug in the process, but government would describe it as a feature and of course highly unlikely to ever change in a meaningful way.

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