How does Social Security calculate my benefits?

Social Security uses three things to calculate your Primary Insurance Amount, or your basic benefit before adjusting for early or late retirement. For this example, we are using the bend points for someone who turned 62 in 2018, and had AIME of $6,000.

The three inputs are:

1. Date of birth
2. Lifetime average earnings, adjusted for inflation
3. Monthly non-Social Security pension

We'll walk you through an example in the following steps.

Step 1:

Social Security calculates how much of your Average Indexed Monthly Earnings (AIME) fall below your first bend point. Bend points are set by law and correspond to the year of your birth.

You get 90% of what falls under this bend point.

However, if you answered “Yes” to the first question in the “Employment Status” section of this website, the amount you get back of this first bucket will be different. To learn more, please see theWindfall Elimination Provision pamphlet

Step 2:

Social Security calculates how much of your AIME fall below your first and second bend points.

Step 3:

Social Security calculates how much of your AIME fall below your second bend point.

Final Calculation

Finally, Social Security adds the results of the three previous steps altogether.

Remember: this is the basic amount you are paid before Social Security adjusts your benefits lower for early retirement, or higher for delayed retirement.