How is my Social Security retirement benefit calculated?

AIME — Average Indexed Monthly Earnings — is the foundation. SSA pulls your 35 highest-earning years from your work record, adjusts each one for wage inflation up to age 60, sums them, and divides by 420 (months in 35 years).

If you have fewer than 35 years of earnings, the missing years count as zero. That drags your average down. People who took years off, raised kids, or worked under the table for cash show up here.

The fix isn't always retroactive — but if you're still working, every year over 35 replaces a lower-earning (or zero) year, raising your AIME.

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Once you have your AIME, the formula breaks it into three slices. The first $1,286 of AIME gets 90% credit. The next slice — between $1,286 and $7,749 — gets 32% credit. Anything above $7,749 gets 15% credit. Add the three pieces. That's your PIA.

The formula is progressive on purpose. Lower-earning workers replace a higher percentage of their working income; higher earners replace less.

Bend points change every year based on national wage growth. The values above are 2026.

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AIME averages 35 years. If you only have 28 years on the record, the other 7 count as $0. Each zero-year pulls your average down meaningfully — in many cases, hundreds of dollars a month off the eventual benefit.

You can fix this by working more years. Every additional year above 35 replaces your lowest year on the record. So even a part-time year at modest wages can raise your AIME, because it's replacing a $0.

This is one of the most preventable benefit cuts I see.

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PIA is the benefit at FRA — your full retirement age. If you file before FRA, your check is reduced. If you wait past FRA, your check grows.

The early-filing reduction is roughly 30% at age 62 if your FRA is 67. Each month before FRA shaves a permanent percentage off.

Delayed retirement credits add about 8% per year you wait past FRA, up to age 70. At 70, your check is around 124% of PIA.

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Social Security only counts wages up to the annual taxable wage cap — $184,500 in 2026. Anything above that doesn't get taxed for Social Security and doesn't count toward your AIME or future benefit.

If you've earned at or near the cap for 35 years, you're in line for the maximum benefit — currently about $4,152 per month at FRA in 2026.

More earnings above the cap won't grow your check. That's the design.

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Your PIA isn't just your retirement check. It's also the basis for your spouse's spousal benefit (up to 50% of your PIA), your survivor's widow or widower benefit (up to 100% of your PIA), and your minor children's benefits.

This is why the wait-to-70 question is bigger than just you. Delayed credits boost YOUR check, not the spousal benefit (which uses PIA, not actual claimed amount). But the survivor benefit DOES grow with your delayed credits.

If your spouse is likely to outlive you and they earned less, your delay is also their inheritance.

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Bring up the my Social Security account if they have one — or help them set one up. Pull the benefit estimate and the earnings record. The estimate already has the formula applied, so the heavy lift is checking the underlying earnings record for errors and confirming they understand the trade-offs of filing early vs. late.

If they're approaching FRA and feeling pressure to file, the math is rarely an emergency. Most decisions can wait 30-90 days while you check the work.

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The benefit calculation has plenty of edge cases — public-sector pensions, foreign work, military service, railroad retirement, divorce records. If you don't see your situation above, write a sentence or two and I'll route you to the right place.