Your Retirement Benefit—How It Is Figured 211948C 10070 10

User Manual: 211948C

Open the PDF directly: View PDF PDF.
Page Count: 2

(over)
Your Retirement Benefit: How It Is Figured
Your Retirement Benefit:
How It Is Figured YEARS
2010
As you make plans for your retirement, you
may ask, “How much will I get from Social
Security?” There are several ways you can find
out. Social Security sends a yearly Social Security
Statement to everyone age 25 or older who has
paid Social Security taxes and has not yet received
benefits. You should receive a Statement about
three months before your birthday each year.
You also can request a Statement online at
www.socialsecurity.gov/onlineservices. Or, you
can request a Statement by calling Social Security
and asking for a form SSA-7004, Request for Social
Security Statement. You can use the Retirement
Estimator at www.socialsecurity.gov/estimator to
find out how much you might receive.
Many people wonder how their benefit is
figured. Social Security benefits are based on
your lifetime earnings. Your actual earnings are
adjusted or “indexed” 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. We apply a
formula to these earnings and arrive at your basic
benefit, or “primary insurance amount” (PIA).
This is how much you would receive at your full
retirement age—65 or older, depending on your
date of birth.
On the back of this page is a worksheet you
can use to estimate your retirement benefit if
you were born in 1948. It is only an estimate;
for specific information, talk with a Social
Security representative.
Factors that can change the amount of
your retirement benefit
•
•
You choose to get benefits before your full
retirement age. You can begin to receive
Social Security benefits as early as age 62,
but at a reduced rate. Your basic benefit will
be reduced by a certain percentage if you
retire before reaching full retirement age.
You are eligible for cost-of-living benefit
increases starting with the year you become
age 62. This is true even if you do not get
benefits until your full retirement age or even
age 70. Cost-of-living increases are added to
your benefit beginning with the year you reach
62 up to the year you start getting benefits.
•
•
You delay your retirement past your full
retirement age. Social Security benefits are
increased by a certain percentage (depending
on your date of birth) if you delay
receiving benefits until past your full
retirement age. If you do so, your benefit
amount will be increased until you start
taking benefits or you reach age 70.
You are a government worker with a
pension. If you also get or are eligible for a
pension from work where you did not pay Social
Security taxes (usually a government job), a
different formula is applied to your average
indexed monthly earnings. To find out how the
Windfall Elimination Provision (WEP) affects
your benefits, go to www.socialsecurity.gov/
gpo-wep and use the WEP online calculator. You
also can review the WEP fact sheet to find out
how your benefit is figured. Or, you can contact
Social Security and ask for Windfall Elimination
Provision (Publication No. 05-10045).
You may find a more detailed explanation about
how your retirement benefit is calculated in the
Annual Statistical Supplement, 2008, Appendix D.
The publication is available on the Internet at
www.socialsecurity.gov/policy/docs/statcomps/
supplement or you can order a paper copy by
writing to the Government Printing Office, P.O.
Box 371954, Pittsburgh, PA 15250-7954.
Contacting Social Security
For more information and to find copies of
our publications, visit our website at
www.socialsecurity.gov or call toll-free,
1-800-772-1213 (for the deaf or hard of hearing,
call our TTY number, 1-800-325-0778). We treat
all calls confidentially. We can answer specific
questions from 7 a.m. to 7 p.m., Monday through
Friday. We can provide information by automated
phone service 24 hours a day.
We also want to make sure you receive
accurate and courteous service. That is why we
have a second Social Security representative
monitor some telephone calls.
YEARS
Estimating your Social Security retirement benefit
For workers born in 1948 (people born in 1948 become age 62 in 2010 and are eligible for a benefit)
This worksheet shows how to estimate the Social Security monthly retirement benefit you would be eligible
for at age 62 if you were born in 1948. It also allows you to estimate what you would receive at age 66, your
full retirement age, excluding any cost-of-living adjustments for which you may be eligible. If you continue
working past age 62, your additional earnings could increase your benefit. People born after 1948 can use this
worksheet, but their actual benefit may be higher due to additional earnings and benefit increases. If you were
born before 1948, please go online at www.socialsecurity.gov or contact us for your worksheet.
Step 1: Enter your actual earnings in Column B, but
not more than the amount shown in Column A. If
you have no earnings, enter “0.”
Step 2: Multiply the amounts in Column B by the
index factors in Column C, and enter the results in
Column D. This gives you your indexed earnings,
or the approximate value of your earnings in
current dollars.
Step 3: Choose from Column D the 35 years with the
highest amounts. Add these amounts. $_________
Step 4: Divide the result from Step 3 by 420 (the
number of months in 35 years). Round down to the
next lowest dollar. This will give you your average
indexed monthly earnings. $_________
Step 5: a. Multiply the first $761 in Step 4 by 90%.
$_________
b. Multiply the amount in Step 4 over $761 and
less than or equal to $4,586 by 32%. $_________
c. Multiply the amount in Step 4 over $4,586 by 15%.
$_________
Step 6: Add a, b and c from Step 5. Round down
to the next lowest dollar. This is your estimated
monthly retirement benefit at age 66, your full
retirement age. $_________
Step 7: Multiply the amount in Step 6 by 75%.
This is your estimated monthly retirement benefit
if you retire at age 62. $_________
Year
A.
Maximum
earnings
B.
Actual
earnings
C.
Index
factor
D.
Indexed
earnings
1951 $3,600 14.77
1952 3,600 13.90
1953 3,600 13.17
1954 3,600 13.10
1955 4,200 12.52
1956 4,200 11.70
1957 4,200 11.35
1958 4,200 11.25
1959 4,800 10.72
1960 4,800 10.32
1961 4,800 10.11
1962 4,800 9.63
1963 4,800 9.40
1964 4,800 9.03
1965 4,800 8.87
1966 6,600 8.37
1967 6,600 7.93
1968 7,800 7.42
1969 7,800 7.01
1970 7,800 6.68
1971 7,800 6.36
1972 9,000 5.79
1973 10,800 5.45
1974 13,200 5.15
1975 14,100 4.79
1976 15,300 4.48
1977 16,500 4.23
1978 17,700 3.92
1979 22,900 3.60
1980 25,900 3.30
Year
A.
Maximum
earnings
B.
Actual
earnings
C.
Index
factor
D.
Indexed
earnings
1981 29,700 3.00
1982 32,400 2.84
1983 35,700 2.71
1984 37,800 2.56
1985 39,600 2.46
1986 42,000 2.39
1987 43,800 2.24
1988 45,000 2.14
1989 48,000 2.06
1990 51,300 1.97
1991 53,400 1.90
1992 55,500 1.80
1993 57,600 1.79
1994 60,600 1.74
1995 61,200 1.67
1996 62,700 1.60
1997 65,400 1.51
1998 68,400 1.43
1999 72,600 1.36
2000 76,200 1.29
2001 80,400 1.26
2002 84,900 1.24
2003 87,000 1.21
2004 87,900 1.16
2005 90,000 1.12
2006 94,200 1.07
2007 97,500 1.02
2008 102,000 1.00
2009 106,800 1.00
Social Security Administration
SSA Publication No. 05-10070
ICN 467100
Unit of Issue - HD (one hundred)
January 2010 (Destroy Prior Edition)

Navigation menu