how is the social security benefit calculated?
15614
We base Social Security benefits on your lifetime earnings. We adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Then, Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most.
1139549
The basic Social Security benefit is called the primary insurance amount (PIA). Typically the PIA is a function of average indexed monthly earnings (AIME). We determine the PIA by applying a PIA formula to AIME.
942138
['Your Social Security benefits will be based on the income you earned during your working years.', 'Only your 35 highest-earning years will be counted.', 'If you take Social Security before full retirement age, your benefits will be permanently reduced.']
1292574
['The number of years that you worked and paid into Social Security. ... ', 'Your earnings during the years you paid into Social Security. ... ', 'When you decide to start receiving your benefits.']
1229335
In fact, once the rest has been determined, the Social Security benefit increase for working another year is simply the difference in earnings between the new year and the lowest historical year, divided by 420 (the number of months in the 35-year average for AIME), and multiplied by the 90%, 32%, or 15% replacement ...
1472130
So, if you claim Social Security as soon as you turn 62 this year, you'll receive a monthly retirement benefit of $1,713.50 -- about $623 less per month than you'd get if you waited until full retirement age. On the other hand, if you were to wait until age 70, your benefit would be permanently increased to $3,022.
654221
The next step is to calculate your average indexed monthly earnings, or AIME, which serves as the basis of your Social Security retirement benefit. To calculate this, add up all 35 of your highest inflation-indexed income figures and then divide the total by 35 to get your annual average.
1361891
Calculating your PIA This is the number that, along with your age at the time you apply, determines your initial Social Security 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.
250476
If you're an employee, the Social Security tax calculation is easy. If you earn less than $128,400 in 2018, simply multiply your earnings by 0.062 to find your Social Security tax. For example, if your salary is $50,000, your 2018 Social Security tax will be $3,100.
590041
To calculate your combined income, add together your adjusted gross income, the value of nontaxable interest income, plus half of your total Social Security benefits for the year. If you are an individual taxpayer, and your combined income is less than $25,000, you likely do not have to pay taxes on your benefits.
491586
Your retirement benefit is calculated using a formula with three factors: Service credit (Years) multiplied by your benefit factor (percentage per year) multiplied by your final monthly compensation equals your unmodified allowance. Service Credit - Total years of employment with a CalPERS employer.
842300
['Take your estimated Social Security benefit at age 62. ... ', "Divide the Social Security benefit estimate by 40 and multiply the result by the number of years you've been employed under FERS, rounded to the nearest full year."]
489192
We use the Social Security taxes you and other workers pay into the system to pay Social Security benefits. You pay Social Security taxes based on your earnings, up to a certain amount. In 2020, that amount is $137,700. You pay Medicare taxes on all of your wages or net earnings from self-employment.
1161205
How is the size of a person's Social Security retirement benefits determined? It depends on the number of credits earned in a person's lifetime, the average level of earning over a person's lifetime, the number of years a person has paid Social Security taxes.
992910
If your Normal Pension Age is 60 your final salary benefits are: A pension calculated by multiplying your service by your average salary and then dividing by 80; and. A lump sum equal to three times your pension.
13878
The supplement is computed as if you were age 62 and fully insured for a Social Security benefit when the supplement begins. ... Divide the Social Security benefit estimate by 40 and multiply the result by the number of years you've been employed under FERS, rounded to the nearest full year.
1068803
Social Security replaces a percentage of a worker's pre-retirement income based on your lifetime earnings. The amount of your average wages that Social Security retirement benefits replaces varies depending on your earnings and when you choose to start benefits.