Social Security: Benefit Calculation

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Social Security: Benefit Calculation
~~January 19~~November 24, 2021 , 2021
Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI), commonly referred to Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI), commonly referred to
on a combined basis as OASDI, are social insurance programs that protect insured workers and on a combined basis as OASDI, are social insurance programs that protect insured workers and
Barry F. Huston
their family members against loss of income due to old age, disability, or death. These programs their family members against loss of income due to old age, disability, or death. These programs
Analyst in Social Policy Analyst in Social Policy
are often referred to as Social Security. Monthly Social Security benefit amounts are determined are often referred to as Social Security. Monthly Social Security benefit amounts are determined

by federal law. Most Social Security beneficiaries are retired or disabled workers whose monthly by federal law. Most Social Security beneficiaries are retired or disabled workers whose monthly
benefits depend on their past earnings, the age at which they claimed benefits, and other factors. benefits depend on their past earnings, the age at which they claimed benefits, and other factors.

Benefits are also paid to workers’ dependents and survivors based on the earnings of the insured Benefits are also paid to workers’ dependents and survivors based on the earnings of the insured
workers. workers.
The computation process involves three main steps: The computation process involves three main steps:
1. First, a summarized measure of lifetime Social Security–covered earnings is computed. That measure is called the 1. First, a summarized measure of lifetime Social Security–covered earnings is computed. That measure is called the
average indexed monthly earnings (AIME). (AIME).
2. Second, a progressive benefit formula is applied to the AIME to compute the 2. Second, a progressive benefit formula is applied to the AIME to compute the primary insurance amount (PIA). The (PIA). The
benefit formula is progressive. As a result, workers with higher AIMEs receive higher Social Security benefits, with benefit formula is progressive. As a result, workers with higher AIMEs receive higher Social Security benefits, with
benefits received by people with lower earnings replacing a larger share of career-average earnings. benefits received by people with lower earnings replacing a larger share of career-average earnings.
3. Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving benefits. For 3. Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving benefits. For
retired workers who claim benefits at the full retirement age (FRA) and for disabled workers, the monthly benefit retired workers who claim benefits at the full retirement age (FRA) and for disabled workers, the monthly benefit
equals the PIA. Retired workers who claim earlier than the FRA receive monthly benefits lower than the PIA (i.e., equals the PIA. Retired workers who claim earlier than the FRA receive monthly benefits lower than the PIA (i.e.,
an actuarial reduction), and those who claim later than the FRA receive benefits higher than the PIA (i.e., a delayed an actuarial reduction), and those who claim later than the FRA receive benefits higher than the PIA (i.e., a delayed
retirement credit). retirement credit).
Retired-worker benefits can be affected by other adjustments. For example, the Retired-worker benefits can be affected by other adjustments. For example, the windfall elimination provision can reduce can reduce
benefits for individuals who receive a pension based on employment not covered by Social Security, and benefits can be benefits for individuals who receive a pension based on employment not covered by Social Security, and benefits can be
temporarily withheld under the temporarily withheld under the retirement earnings test if a beneficiary under the FRA continues to work and earns above a if a beneficiary under the FRA continues to work and earns above a
certain amount. Although not an adjustment, income tax can affect Social Security benefits and thus the beneficiary’s net certain amount. Although not an adjustment, income tax can affect Social Security benefits and thus the beneficiary’s net
income. income.
Benefits for eligible dependents and survivors are based on the worker’s PIA. For example, a dependent spouse can receive a Benefits for eligible dependents and survivors are based on the worker’s PIA. For example, a dependent spouse can receive a
benefit equal to 50% of the worker’s PIA, and a widow(er) can receive a benefit equal to 100% of the worker’s PIA. benefit equal to 50% of the worker’s PIA, and a widow(er) can receive a benefit equal to 100% of the worker’s PIA.
Dependent benefits may also be adjusted based on the age at which they are claimed and other factors. Dependent benefits may also be adjusted based on the age at which they are claimed and other factors.
In In ~~December 2020~~October 2021, there were approximately , there were approximately ~~64.8~~65.2 million Social Security beneficiaries collecting an million Social Security beneficiaries collecting an ~~a verage~~average monthly benefit monthly benefit
of $1,of $1,~~422~~442. Retired-worker and disabled-worker beneficiaries accounted for 84.. Retired-worker and disabled-worker beneficiaries accounted for 84.05% of the beneficiary population. The largest % of the beneficiary population. The largest
single category of beneficiaries was retired workers (single category of beneficiaries was retired workers (~~71.4~~72.3%), with an average monthly benefit of $1,%), with an average monthly benefit of $1,~~544~~563. The second. The second -largest -largest
category was disabled workers (12.category was disabled workers (12.62%), with an average monthly benefit of $1,%), with an average monthly benefit of $1,~~277~~282. Family members of retired, disabled, or . Family members of retired, disabled, or
deceased workers accounted for the remainder of the beneficiary population (deceased workers accounted for the remainder of the beneficiary population (~~16.0~~15.5%). The Social Security Administration’s %). The Social Security Administration’s
Office of the Chief Actuary estimates that about Office of the Chief Actuary estimates that about 9394% of workers (% of workers (~~180~~176 million) are covered under the OASDI programs. million) are covered under the OASDI programs.
Because of the number of people receiving benefits, the number of people expected to receive benefits, and the program’s Because of the number of people receiving benefits, the number of people expected to receive benefits, and the program’s
projected long-term financial imbalance, there has been some congressional interest in making changes to the benefit projected long-term financial imbalance, there has been some congressional interest in making changes to the benefit
formula. formula.

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Introduction
Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI), commonly referred to on Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI), commonly referred to on
a combined basis as OASDI, are social insurance programs that protect insured workers and their a combined basis as OASDI, are social insurance programs that protect insured workers and their
family members against loss of income due to old age, disability,family members against loss of income due to old age, disability, or death. These programs are or death. These programs are
often referred to as Social Security. Most Social Security beneficiaries are retired or disabled often referred to as Social Security. Most Social Security beneficiaries are retired or disabled
workers whose monthly benefits depend on their past earnings, their age, and other factors. workers whose monthly benefits depend on their past earnings, their age, and other factors.
Benefits are also paid to workers’ dependents and survivors based on the earnings of the insured Benefits are also paid to workers’ dependents and survivors based on the earnings of the insured
workers. workers.
Social Security has a significant impact on beneficiaries, both young and old, in terms of income Social Security has a significant impact on beneficiaries, both young and old, in terms of income
support and poverty reduction.1 Under current law, Social Security’s revenues are projected to be support and poverty reduction.1 Under current law, Social Security’s revenues are projected to be
insufficient to pay full scheduled benefits after insufficient to pay full scheduled benefits after ~~2035~~2034.2 For both of those reasons, Social Security .2 For both of those reasons, Social Security
is of ongoing interest to policymakers. Most proposals to change Social Security would change is of ongoing interest to policymakers. Most proposals to change Social Security would change
the benefit computation rules. Evaluating such proposals requires an understanding of how the benefit computation rules. Evaluating such proposals requires an understanding of how
benefits are computed under current law. benefits are computed under current law.
This report provides several examples of how benefits are computed under current law. To help This report provides several examples of how benefits are computed under current law. To help
~~il ustrate~~illustrate the benefit formula, this report makes use of the benefit formula, this report makes use of hypothetical earners. Wages for . Wages for
hypothetical earners are expressed at each age as a percent of the Social Security Administration’s hypothetical earners are expressed at each age as a percent of the Social Security Administration’s
(SSA’s) Average Wage Index (AWI).3 Throughout this report, examples of benefit calculations (SSA’s) Average Wage Index (AWI).3 Throughout this report, examples of benefit calculations
are shown for very low, low, medium, and high lifetime hypothetical earners as are shown for very low, low, medium, and high lifetime hypothetical earners as ~~wel~~ well as as maximum
earners.4 This technique demonstrates how Social Security benefits are computed under current .4 This technique demonstrates how Social Security benefits are computed under current
law, how career earnings affect benefit levels, and how program changes may affect beneficiaries. law, how career earnings affect benefit levels, and how program changes may affect beneficiaries.
In addition, this technique In addition, this technique ~~il ustrates~~illustrates how indexed parameters that change year to year affect how indexed parameters that change year to year affect
benefit benefit ~~amounts~~amounts. Appendix A provides more details, including distributional information, on provides more details, including distributional information, on
wages of hypothetical earners born in wages of hypothetical earners born in ~~1951~~1952. This year is chosen simply because it is the youngest . This year is chosen simply because it is the youngest
~~cohort of workers and beneficiaries for which complete information on indexed earnings and~~
~~program specific factors are known.~~

1 Research suggests1 Research suggests that Social Securitythat Social Security benefits accounted for most of the decline in poverty from 1967 through 2000. benefits accounted for most of the decline in poverty from 1967 through 2000.
For more information, see CRSFor more information, see CRS Report R45791, Report R45791, Poverty ~~Am ong Am ericans~~Among the Population Aged 65 and Older. .
2 Social2 Social Security Administration (SSA),Security Administration (SSA), Office of the Chief Actuary, Office of the Chief Actuary, The ~~2020 Annual~~2021Annual Report of the Board of Trustees
of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, , ~~April 22, 2020~~August 31, 2021, ,
https://www.ssa.gov/OACThttps://www.ssa.gov/OACT ~~/T R/2020/tr2020~~/TR/2021/tr2021.pdf (hereinafter cited as “.pdf (hereinafter cited as “ ~~2020~~2021 Annual Report Annual Report ”). Under current law, the ”). Under current law, the
OASIOASI and DI trust funds are distinct entities and cannot borrow from each other when faced with a fundingand DI trust funds are distinct entities and cannot borrow from each other when faced with a funding shortfall. shortfall.
~~T he~~The shifting of funds between shifting of funds between ~~OASI~~ OASI and DI can be done only with authorization from Congress. In the past, Congress and DI can be done only with authorization from Congress. In the past, Congress
has authorized temporary interfund borrowing among the OASI,has authorized temporary interfund borrowing among the OASI, DI, and MedicareDI, and Medicare Hospital Insurance trust funds, as Hospital Insurance trust funds, as
wellwell as temporary payroll tax reallocations between OASI and DI, to deal with fundingas temporary payroll tax reallocations between OASI and DI, to deal with funding shortfalls. Most recently, under shortfalls. Most recently, under
the Bipartisan Budgetthe Bipartisan Budget Act of 2015 (P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from Act of 2015 (P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from
the OASIthe OASI fund to the DI fund for calendar years 2016-2018. Because of such actions, the OASI and DI fund to the DI fund for calendar years 2016-2018. Because of such actions, the OASI and DI ~~t rust~~trust funds are funds are
discusseddiscussed on a combined basis.on a combined basis. Separately, the OASISeparately, the OASI fund isfund is projected to have asset reserves until projected to have asset reserves until ~~2034~~2033, at which point , at which point
continuing income to the fund wouldcontinuing income to the fund would be be sufficient to pay 76% of OASIsufficient to pay 76% of OASI ~~scheduled benefits. T he DI fund~~ scheduled benefits. The DI fund is projected to is projected to
have asset reserves until have asset reserves until ~~2065~~2057, at which point continuing income would, at which point continuing income would be sufficient to pay be sufficient to pay 9291% of DI scheduled % of DI scheduled
benefits (benefits (~~2020~~2021 Annual Report, p. Annual Report, p. ~~5.) T he 2020 Annual Report reflects~~6.) The 2021 intermediate assumptions reflect the trustees’ understanding of the the trustees’ understanding of the ~~OASDI~~
~~program~~status of the Social Security trust funds at the start of at the start of ~~2020. T hus, it does not~~2021. Unlike the previous year’s report, the 2021 estimates do include potential effects of include potential effects of ~~the~~ Coronavirus Disease 2019Coronavirus Disease 2019 ~~pandemic.~~
~~3 SSA, Office of the Chief Actuary (OCACT~~ (COVID-19). Although the report includes impacts from COVID-19, the impacts are confined to the near term. The trustees acknowledge that effects from the pandemic, especially in the long term, are subject to a high level of uncertainty. 3 SSA, Office of the Chief Actuary (OCACT), ), Scaled Factors for Hypothetical Earnings Examples Under the ~~2020~~2021
Trustees Report Assumptions, August 2021 at~~Report Assum ptions, April 2020~~ https://www.ssa.gov/OACT https://www.ssa.gov/OACT ~~/NOT ES/ran3/an2020~~/NOTES/ran3/an2021-3.pdf. -3.pdf.
4 A maximum earner is a worker who has earnings at or above the contribution and benefit base for each year starting at 4 A maximum earner is a worker who has earnings at or above the contribution and benefit base for each year starting at
age 22 through the year prior to retirement (age 22 through the year prior to retirement (~~2020~~2021 Annual Report, p. Annual Report, p. ~~152). T he~~156). The contribution and benefit base contribution and benefit base for for ~~2021~~2022 is is
$$~~142,800~~147,000 (see SSA, (see SSA, ~~2021~~ 2022 Social Security Changes, https://www.ssa.gov/news/press/factsheets/, https://www.ssa.gov/news/press/factsheets/~~colafacts2021~~colafacts2022.pdf). .pdf).
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cohort of workers and beneficiaries for which complete information on indexed earnings and program-specific factors are known. Eligibility and Insured Status
Workers become eligible for Social Security benefits for themselves and for their family members Workers become eligible for Social Security benefits for themselves and for their family members
by working in Social Security–by working in Social Security–covered employment.5 .5 ~~General y~~Generally speaking, about speaking, about 9394% of workers % of workers
earn wages or self-employment income in Social Security–covered employment.6 While working earn wages or self-employment income in Social Security–covered employment.6 While working
in covered employment, workers earn in covered employment, workers earn quarters of coverage (QCs), or credits. The amount needed (QCs), or credits. The amount needed
for a QC increases for a QC increases ~~annual y~~annually with growth in average earnings in the national economy as with growth in average earnings in the national economy as
measured by the AWI (measured by the AWI (seesee Table B-1).7 In .7 In ~~2021~~2022, a worker , a worker ~~earns~~will earn one credit or QC for every one credit or QC for every
$1,$1,~~470~~510 of earnings, up to four per year. Therefore, a worker earning $ of earnings, up to four per year. Therefore, a worker earning $~~5,880~~6,040 in covered in covered
employment at any point in the calendar year would be credited with the maximum number (i.e., employment at any point in the calendar year would be credited with the maximum number (i.e.,
four) of QCs for that year. four) of QCs for that year.
Insured Status
To be eligibleTo be eligible for most benefits, workers must be for most benefits, workers must be fully insured, which requires one QC for each , which requires one QC for each
year elapsed after the worker turns 21 years old—with a minimum of six QCs and a maximum of year elapsed after the worker turns 21 years old—with a minimum of six QCs and a maximum of
40 QCs—and the year before the worker attains age 62, the year before the worker dies, or the 40 QCs—and the year before the worker attains age 62, the year before the worker dies, or the
year before the worker becomes disabled. A worker is first eligibleyear before the worker becomes disabled. A worker is first eligible for Social Security retirement for Social Security retirement
benefits at 62, so to be eligiblebenefits at 62, so to be eligible for retirement benefits, a worker must for retirement benefits, a worker must ~~general y~~generally have worked for have worked for
10 years. Workers are 10 years. Workers are permanently insured when they are fully insured and when they are fully insured and ~~wil~~ will not lose fully not lose fully
insured status when they stop working under covered employment, for example, if a worker has insured status when they stop working under covered employment, for example, if a worker has
the maximum 40 QCs. the maximum 40 QCs.
Benefits may be paid to eligible Benefits may be paid to eligible survivors of a worker who was fully insured at the time of death.8 survivors of a worker who was fully insured at the time of death.8
Some dependents are also eligibleSome dependents are also eligible for survivors benefits if the deceased worker was for survivors benefits if the deceased worker was currently
insured, which requires earning six QCs in the 13 quarters ending with the quarter of death. , which requires earning six QCs in the 13 quarters ending with the quarter of death.
To be eligible To be eligible for disability benefits, workers must also satisfy a recency of work requirement. for disability benefits, workers must also satisfy a recency of work requirement.
Workers aged 31 or older must have earned 20 QCs in the 10 years before becoming disabled. Workers aged 31 or older must have earned 20 QCs in the 10 years before becoming disabled.
Fewer QCs are required for younger workers.9 Fewer QCs are required for younger workers.9
In the case of workers having work history in multiple countries, international In the case of workers having work history in multiple countries, international totalization
agreements ~~al ow~~allow workers who divide their careers between the United States and certain workers who divide their careers between the United States and certain
~~countries to fil gaps in Social Security coverage by combining work credits under each country’s~~
~~system to qualify for benefits under one or both systems.10~~

5 A list of eligibility requirements for family members is covered in5 A list of eligibility requirements for family members is covered in Appendix C. . Covered employment is Covered employment is
employment for which earnings are creditable for Socialemployment for which earnings are creditable for Social Security purposes (Security purposes (~~2020~~2021 Annual Report, p. Annual Report, p. ~~238~~243). The).
~~T he~~ roughly roughly 76% of workers who are not covered by Social Security% of workers who are not covered by Social Security are state and local government workers, are state and local government workers,
certain workers employed by certain workers employed by ~~religious~~ religious groups, and certain noncitizen workers. groups, and certain noncitizen workers.
6 OCACT 6 OCACT , “Social Security, “Social Security Program Fact SheetProgram Fact Sheet ~~,” July 2020~~,” June 2021, https://www.ssa.gov/oact/, https://www.ssa.gov/oact/~~FACT S~~FACTS/index.html. /index.html.
7 7 ~~T he~~The AWI is the average of all workers’ wages AWI is the average of all workers’ wages ~~subject~~ subject to federal income taxes and contributions to deferred to federal income taxes and contributions to deferred
compensation plans. It is calculated usingcompensation plans. It is calculated using some wagessome wages that are not subject to the Social Security payroll tax. that are not subject to the Social Security payroll tax.
8 For more information on survivors benefits, see CRS8 For more information on survivors benefits, see CRS Report RS22294, Report RS22294, Social Security Survivors Benefits. .
9 9 ~~T o~~To be eligible be eligible for disabilityfor disability benefits, workers must also be found unablebenefits, workers must also be found unable to engage in substantial gainful activity. See to engage in substantial gainful activity. See
CRSCRS Report R44948, Report R44948, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility,
Benefits, and Financing. .
~~10 See CRS Report RL32004, Social Security Benefits for Noncitizens.~~
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Social Security: Benefit Calculation

countries to fill gaps in Social Security coverage by combining work credits under each country’s system to qualify for benefits under one or both systems.10 Amount Needed to Earn Credits
As discussed, in As discussed, in ~~2021~~2022, a worker , a worker ~~would~~will earn one QC for each $1, earn one QC for each $1,~~470 of~~ 510 of covered earnings.11 Therefore, a earnings.11 Therefore, a
worker earning $worker earning $~~5,880~~6,040 in covered employment at any point in the calendar year would be credited in covered employment at any point in the calendar year would be credited
with the maximum number (i.e., four) of QCs for that year. Alternatively, if a worker earned with the maximum number (i.e., four) of QCs for that year. Alternatively, if a worker earned
~~$4,410~~$4,530 in covered employment in in covered employment in ~~2021~~2022, he or she would be credited with three QCs for that year , he or she would be credited with three QCs for that year
($4,($4,~~410~~530 divided by $1, divided by $1,~~470~~510). ).
Average Index Monthly Earnings
The first step of computing a Social Security benefit is determining a worker’s The first step of computing a Social Security benefit is determining a worker’s average indexed
monthly earnings (AIME), a measure of a worker’s past earnings. (AIME), a measure of a worker’s past earnings.
A worker’s Social Security benefit is based on his or her earnings during covered employment. A worker’s Social Security benefit is based on his or her earnings during covered employment.
That is, only earnings from years of covered employment are included in the calculation. That is, only earnings from years of covered employment are included in the calculation.
Earnings that were not covered (i.e., not subject to the Social Security payroll tax) are not Earnings that were not covered (i.e., not subject to the Social Security payroll tax) are not
included in the calculation. included in the calculation.
Under current law, the Social Security payroll tax is applied to covered earnings up to an annual Under current law, the Social Security payroll tax is applied to covered earnings up to an annual
limit, or taxable maximum. The taxable maximum is indexed to national average wage growth for limit, or taxable maximum. The taxable maximum is indexed to national average wage growth for
years in which a cost-of-living adjustment (COLA) is payable. The taxable maximum years in which a cost-of-living adjustment (COLA) is payable. The taxable maximum ~~increases~~
~~from $137,700 in 2020 to $142,800 in 2021~~will increase from $142,800 in 2021 to $147,000 in 2022. This level of earnings is both the contribution base . This level of earnings is both the contribution base
(i.e., amount of covered earnings subject to the Social Security payroll tax) and the benefit base (i.e., amount of covered earnings subject to the Social Security payroll tax) and the benefit base
(i.e., amount of covered earnings used to determine benefits). Earnings in excess of the taxable (i.e., amount of covered earnings used to determine benefits). Earnings in excess of the taxable
maximum are not subject to the Social Security payroll tax and are not factored into benefit maximum are not subject to the Social Security payroll tax and are not factored into benefit
calculations. calculations.
Wage Indexing
Rather than using the amounts earned in past years directly, the AIME computation process first Rather than using the amounts earned in past years directly, the AIME computation process first
updates past earnings to account for the growth in updates past earnings to account for the growth in ~~overal~~ overall economy-wide earnings. That is done economy-wide earnings. That is done
by increasing each year of a worker’s taxable earnings after 1950 by the growth in average by increasing each year of a worker’s taxable earnings after 1950 by the growth in average
earnings in the economy, as measured by the AWI, from the year of work until two years prior to earnings in the economy, as measured by the AWI, from the year of work until two years prior to
eligibilityeligibility for benefits, which for retired workers is at age 60. (Workers are first eligible for for benefits, which for retired workers is at age 60. (Workers are first eligible for
benefits at age 62.12) For example, the national average wage grew from $32,155 in 2000 to benefits at age 62.12) For example, the national average wage grew from $32,155 in 2000 to
$41,674 in 2010. So if a worker earned $20,000 in 2000 and turned 60 in 2010, the $41,674 in 2010. So if a worker earned $20,000 in 2000 and turned 60 in 2010, the indexed wage wage
for 2000 would be $20,000 × ($41,674/$32,155), or $25,921. Earnings from later years—for for 2000 would be $20,000 × ($41,674/$32,155), or $25,921. Earnings from later years—for
retired workers at ages 60 and above—are not indexed. retired workers at ages 60 and above—are not indexed.
~~Number of Years~~
~~For retired workers, the AIME equals the average of the highest 35 years of indexed earnings~~
~~divided by 12 (to change the benefit from an annual to a monthly measure). Those years of~~
~~earnings are known as computation years. If the person worked fewer than 35 years in~~

~~11 Since~~ 10 See CRS Report RL32004, Social Security Benefits for Noncitizens. 11 Since 1978, the amount needed to earn a QC1978, the amount needed to earn a QC has been indexedhas been indexed to changes in the AWIto changes in the AWI . See. See ~~OCACT~~ OCACT, “Quarter of , “Quarter of
Coverage,” https://www.ssa.gov/OACTCoverage,” https://www.ssa.gov/OACT /COLA/QC.html./COLA/QC.html. Under current law, the amount needed to earn a QC cannot Under current law, the amount needed to earn a QC cannot
decrease. decrease. ~~T hat~~That is, the amount required is is, the amount required is the higher of (1) the amount in effect for the calendar year a determination is the higher of (1) the amount in effect for the calendar year a determination is
made or (2) the product of that calendar year’s amount and the change in the AWI (42 U.S.C.made or (2) the product of that calendar year’s amount and the change in the AWI (42 U.S.C. §413(a)). §413(a)).
12 SSA12 SSA ~~uses~~ uses the national average wagethe national average wage ~~indexing~~ indexing series to ensure that future benefits reflect the general rise in the series to ensure that future benefits reflect the general rise in the
standard of living over the course of a worker’s earning history. For details, seestandard of living over the course of a worker’s earning history. For details, see “Index earnings used“Index earnings used to compute initial to compute initial
benefits” in OCACTbenefits” in OCACT , “National Average Wage Index,” https://www.ssa.gov/oact/COLA/AWI.html. , “National Average Wage Index,” https://www.ssa.gov/oact/COLA/AWI.html.
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Number of Years For retired workers, the AIME equals the average of the highest 35 years of indexed earnings divided by 12 (to change the benefit from an annual to a monthly measure). Those years of earnings are known as computation years. If the person worked fewer than 35 years in employment subject to Social Security payroll taxes, the computation includes some years of zero employment subject to Social Security payroll taxes, the computation includes some years of zero
earnings. earnings.
In the case of workers who die before turning 62 years old, the number of computation years is In the case of workers who die before turning 62 years old, the number of computation years is
~~general y~~generally reduced below 35 by the number of years until he or she would have reached 62. For reduced below 35 by the number of years until he or she would have reached 62. For
example, the AIME for a worker who died at 61 is based on 34 computation years. example, the AIME for a worker who died at 61 is based on 34 computation years.
For disabled workers, the number of computation years depends primarily on the age at which For disabled workers, the number of computation years depends primarily on the age at which
they become disabled, increasing from two years for those aged 24 or younger to 35 years for they become disabled, increasing from two years for those aged 24 or younger to 35 years for
those aged 62 or older.13those aged 62 or older.13
AIME for Hypothetical Workers Born in ~~1951~~1952
Table 1 shows the AIME for the four hypothetical scaled earners and maximum earner for the shows the AIME for the four hypothetical scaled earners and maximum earner for the
~~1951~~1952 birth cohort. (Nominal annual earnings for this cohort are shown i birth cohort. (Nominal annual earnings for this cohort are shown in Table A-2, and wage- and wage-
indexed earnings for this cohort are shown iindexed earnings for this cohort are shown in Table A-3.) These workers, born in These workers, born in ~~1951~~1952, are , are
assumed to have entered the labor force in assumed to have entered the labor force in ~~1972~~1973 (i.e., age 21) and worked (i.e., age 21) and worked ~~continual y until 2013~~continually until 2014
(i.e., age 62). As discussed and shown i(i.e., age 62). As discussed and shown in Table A-3, annual earnings until age 60 are wage-annual earnings until age 60 are wage-
indexed using the AWI, whereas earnings for later years are kept at nominal values (reflected by indexed using the AWI, whereas earnings for later years are kept at nominal values (reflected by
an index factor of 1.00 ian index factor of 1.00 in Table A-3). The AIME is calculated by taking the total of the highest 35 . The AIME is calculated by taking the total of the highest 35
years of earnings and dividing by 420 (the number of months in 35 years). years of earnings and dividing by 420 (the number of months in 35 years).
Table 1. Total Wage-Indexed Earnings and Average Indexed Monthly Earnings (AIME)
for Hypothetical Workers Born in ~~1951~~1952, by Earnings Level
Very Low
Low
Medium
Higher
Maximum

Earner
Earner
Earner
Earner
Earner
Total Earnings from Highest Total Earnings from Highest
35 Years of Wage-Indexed 35 Years of Wage-Indexed
$ $~~375,065.37~~
~~$675,159.58~~
~~$1,500,603.99~~
~~$2,400,932.27~~
~~$3,586,573.11~~386,516.41 $695,712.04 $1,545,756.54 $2,473,343.43 $3,734,047.63
Earnings Earnings
AIME AIME
~~893~~920.00 .00
1, 1,~~607~~656.00 .00
3, 3,~~572~~680.00 .00
5, 5,~~716~~888.00 .00
8, 8,~~538~~890.00 .00
Source: CRS. CRS.
Note: Wage-indexed earnings are rounded to the nearest cent, and AIMEs are rounded down to the nearest Wage-indexed earnings are rounded to the nearest cent, and AIMEs are rounded down to the nearest
dol ar (see 20 C.F.R. §dol ar (see 20 C.F.R. § ~~404.211).~~
~~Primary Insurance Amount~~
~~The next step in determining a benefit is to compute the primary insurance amount (PIA) by~~
~~applying a benefit formula to the AIME.~~

~~13 T he~~404.211). 13 The number of computation years equals number of computation years equals the number of “elapsed years” minus any “dropout years.” the number of “elapsed years” minus any “dropout years.” ~~T he~~The number of number of
elapsedelapsed years equalsyears equals the calendar years after an individualthe calendar years after an individual turns 21 years old through the year before the individualturns 21 years old through the year before the individual first first
becomes eligiblebecomes eligible for disability benefits with a minimum of two. For every five elapsedfor disability benefits with a minimum of two. For every five elapsed years, there is one disability years, there is one disability
dropout year up to a maximum of five. In addition, people with fewerdropout year up to a maximum of five. In addition, people with fewer than three disability dropout years may be than three disability dropout years may be
credited with up to two additional dropout years basedcredited with up to two additional dropout years based on the care of a child for up to a total of three dropout years. See on the care of a child for up to a total of three dropout years. See
CRSCRS Report R43370, Report R43370, Social Security Disability Insurance (SSDI): ~~Becom ing~~Becoming Insured, Calculating Benefit ~~Paym ents~~Payments,
and the Effect of Dropout Year Provisions. .
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Primary Insurance Amount The next step in determining a benefit is to compute the primary insurance amount (PIA) by applying a benefit formula to the AIME. First, the AIME is sectioned into three brackets (or segments) of earnings, which are divided by First, the AIME is sectioned into three brackets (or segments) of earnings, which are divided by
dollar amounts known as bend points. In dollar amounts known as bend points. In ~~2021~~2022, the bend points , the bend points ~~are $996~~will be $1,024 and $6, and $6,~~002~~172.14 Those .14 Those
amounts are indexed to the AWI, so they amounts are indexed to the AWI, so they ~~general y~~generally increase each year.15 increase each year.15
Three factors—which are fixed by law at 90%, 32%, and 15%—are applied to the three brackets Three factors—which are fixed by law at 90%, 32%, and 15%—are applied to the three brackets
of AIME to of AIME to ~~al ow~~allow for a progressive benefit formula. for a progressive benefit formula. For workers with AIMEs of $For workers with AIMEs of $~~996~~1,024 or less in or less in
~~2021~~2022, the PIA is 90% of the AIME. Because the other two factors are lower, the share of earnings , the PIA is 90% of the AIME. Because the other two factors are lower, the share of earnings
that is replaced by the Social Security benefit declines as AIMEs increase. For workers who that is replaced by the Social Security benefit declines as AIMEs increase. For workers who
become eligiblebecome eligible for retirement benefits, become disabled, or die in for retirement benefits, become disabled, or die in ~~2021~~2022, the PIA is determined as , the PIA is determined as
shown in the examples inshown in the examples in Table 2. Benefits are based on covered earnings. Earnings up to the Benefits are based on covered earnings. Earnings up to the
maximum taxable amount ($maximum taxable amount ($~~142,800 in 2021~~147,000 in 2022) are subject to the Social Security payroll tax. If a ) are subject to the Social Security payroll tax. If a
worker earns the maximum taxable amount in every year of a full work history, becomes eligible worker earns the maximum taxable amount in every year of a full work history, becomes eligible
~~in 2021~~in 2022, and claims benefits at the full retirement age (FRA), the maximum PIA is $3,, and claims benefits at the full retirement age (FRA), the maximum PIA is $3,~~148~~345.16 .16
PIA for Hypothetical Workers Born in ~~1951~~1952
Table 2 shows how to calculate the PIAs for the four hypothetical scaled earners and the shows how to calculate the PIAs for the four hypothetical scaled earners and the
maximum earner for the maximum earner for the ~~1951~~1952 birth cohort (who reached age 62 in birth cohort (who reached age 62 in ~~2013~~2014). This table highlights ). This table highlights
several features of the benefit formula. First, the formula results in a several features of the benefit formula. First, the formula results in a progressive replacement replacement
rate—measured as the percent of AIME that the PIA replaces. That is, the replacement rate is rate—measured as the percent of AIME that the PIA replaces. That is, the replacement rate is
higher for lower earners (i.e., 83% for very low earners) than for higher earners (i.e., 37% for higher for lower earners (i.e., 83% for very low earners) than for higher earners (i.e., 37% for
high earners). Second, the benefit formula results in high earners). Second, the benefit formula results in individual equity. . ~~Specifical y~~Specifically, the more a , the more a
worker earns (and pays in payroll tax), up to the taxable maximum, the higher the PIA. For worker earns (and pays in payroll tax), up to the taxable maximum, the higher the PIA. For
instance, a hypothetical low earner born in instance, a hypothetical low earner born in ~~1951~~1952 had monthly wage-indexed earnings of about had monthly wage-indexed earnings of about
$1,$1,~~607~~656, resulting in a PIA of $, resulting in a PIA of $~~973.00~~1,003.20, whereas a maximum earner born in the same year had , whereas a maximum earner born in the same year had
wage-indexed earnings of about $8,wage-indexed earnings of about $8,~~538~~890 and thus a PIA of $2, and thus a PIA of $2,~~803.10~~642.60. The maximum earner paid . The maximum earner paid
the largest possible amount in payroll tax in each year of employment, while the low earner paid the largest possible amount in payroll tax in each year of employment, while the low earner paid
considerably less.17 His or her PIA is almost four times that of the very low earner. considerably less.17 His or her PIA is almost four times that of the very low earner.

~~14 T he~~ 14 The bend points used bend points used in the PIA formula are rounded to the nearest dollar (42 U.S.C.in the PIA formula are rounded to the nearest dollar (42 U.S.C. §415(a)(1§415(a)(1 )(B)(iii)). )(B)(iii)).
15 Bend points are indexed15 Bend points are indexed to the AWI and can decrease when AWI decreases (42 U.S.C.to the AWI and can decrease when AWI decreases (42 U.S.C. §415(a)(1)(B)). Se§415(a)(1)(B)). See Table B-
1 for a list of historical bend point values. For more information on effects of wagefor a list of historical bend point values. For more information on effects of wage ~~indexing~~ indexing and price indexing on and price indexing on
benefits, see CRSbenefits, see CRS ~~In Focus IF11599, Social Security Benefits and the Effect of Declines in Average Wages and Prices.~~
~~16 SSA, “2021 Social Security Changes.”~~
~~17 For the 1951~~ Report R46819, Social Security: The Effects of Wage and Price Indexing on Benefits. 16 SSA, “2022 Social Security Changes.” 17 For the 1952 birth cohort, a hypothetical low earner would birth cohort, a hypothetical low earner would have paidhave paid a lifetime total of $a lifetime total of $~~14,674~~15,271.54 in Social Security in Social Security
payroll taxes on total nominal earnings of $payroll taxes on total nominal earnings of $~~242,032~~251,188.17, whereas a hypothetical maximum earner would have paid a , whereas a hypothetical maximum earner would have paid a
lifetime total of $lifetime total of $~~141,477~~148,112.69 in payroll taxes on total nominal earnings of $2, in payroll taxes on total nominal earnings of $2,~~338,700~~443,400. Both workers would. Both workers would have been have been
subjectsubject to the same employee payrollto the same employee payroll tax rate. rate. ~~T he~~The hypothetical maximum earner would have hypothetical maximum earner would have ~~receive~~ received larger benefits based larger benefits based
on higher earnings subject to the payroll tax. Social Securityon higher earnings subject to the payroll tax. Social Security benefits themselves may also be subjectbenefits themselves may also be subject to federal income to federal income
tax. For more information, see CRStax. For more information, see CRS Report RL32552, Report RL32552, Social Security: Taxation of Benefits. .
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Table 2. Computation of Primary Insurance Amounts (PIAs) for Hypothetical
Workers Born in ~~1951~~1952, by Earnings Levels
~~Three Brackets~~
PIAs for Hypothetical Workers
~~of Average~~
~~Indexed~~Three Brackets of Average
Very Low
~~Medium~~
~~High~~
~~Maximum~~
~~Factors~~
~~Monthly~~
~~Earner~~
~~Low~~ High Maximum Factors Indexed Low Earner Medium Monthly Earner
Earner
Earner
Earner
Earnings
(AIME) in ~~2013~~2014
AIME of
AIME of
AIME of
AIME of
AIME of
$~~893~~920.00
$1,~~607~~656.00
$3,~~572~~680.00
$5,~~716~~888.00
$8,~~538~~890.00
first $ first $~~791~~8161 of of
90% 90%
AIME, plus AIME, plus
$ $~~711.90~~
~~$711.90~~
~~$711.90~~
~~$711.90~~
~~$711~~734.40 $734.40 $734.40 $734.90 $734.90 .90
AIME over $ AIME over $~~791~~816
32% 32%
and through and through
~~32.64~~
~~261.12~~
~~889.92~~
~~1,272.64~~
~~1,272.64~~
~~$4,768~~33.28 268.80 916.48 1,312.32 1,312.32 $4,917, plus , plus
15% 15%
AIME over $4, AIME over $4,~~768~~917
0.00 0.00
0.00 0.00
0.00 0.00
~~142.20~~
~~565.50~~145.65 595.95
Total: Worker’s PIA (by (by
law, rounded down to nearest law, rounded down to nearest
~~744.50~~
~~973.00~~
~~1,601.80~~
~~2126.70~~
~~2550.00~~767.60 1,003.20 1,650.80 2,192.30 2,642.60
10 cents) 10 cents)
PIA as Percent of AIME
83% 83%
61% 61%
45% 45%
37% 37%
30% 30%
Source: CRS. CRS.
Notes: The bend points shown in the table apply to workersThe bend points shown in the table apply to workers who first become eligiblewho first become eligible ~~in 2013. See~~ in 2014. See Table B-1
for historical values of bend points. Under current law, PIA is rounded down to the nearest dimefor historical values of bend points. Under current law, PIA is rounded down to the nearest dime (42 U.S.C. (42 U.S.C.
§415(a)(1)(A)). §415(a)(1)(A)).
Benefit Amounts
The PIA calculated in the previous section may not be the benefit amount a worker The PIA calculated in the previous section may not be the benefit amount a worker ~~wil~~ will receive at receive at
retirement. The PIA is further adjusted for age at benefit claiming and COLAs to determine the retirement. The PIA is further adjusted for age at benefit claiming and COLAs to determine the
benefit amount. Also, PIAs may be recomputed to capture additional covered earnings.18 benefit amount. Also, PIAs may be recomputed to capture additional covered earnings.18
Age
The The earliest eligibility age is the age at which a retired worker can first claim benefits. The is the age at which a retired worker can first claim benefits. The full
retirement age (FRA, also (FRA, also ~~cal ed~~called the normal retirement age) is the age at which a worker can the normal retirement age) is the age at which a worker can
receive the full PIA, increased by any COLAs. The FRA was 65 for people born before 1938, but receive the full PIA, increased by any COLAs. The FRA was 65 for people born before 1938, but
the Social Security Amendments of 1983 (P.L. 98-21) raised the FRA for those born later, as the Social Security Amendments of 1983 (P.L. 98-21) raised the FRA for those born later, as
shown shown inin Table 3.
Table 3. Full Retirement Age (FRA) by Year of Birth
Year of Earliest Eligibility
Year of Birth
Age
FRA
1937 or earlier 1937 or earlier
1999 or earlier 1999 or earlier
65 65
1938 1938
2000 2000
65 and 2 months 65 and 2 months
1939 1939
2001 2001
65 and 4 months 65 and 4 months

18 20 C.F.R. §404.281. 18 20 C.F.R. §404.281.
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Year of Earliest Eligibility
Year of Birth
Age
FRA
1940 1940
2002 2002
65 and 6 months 65 and 6 months
1941 1941
2003 2003
65 and 8 months 65 and 8 months
1942 1942
2004 2004
65 and 10 months 65 and 10 months
1943-1954 1943-1954
2005-2016 2005-2016
66 66
1955 1955
2017 2017
66 and 2 months 66 and 2 months
1956 1956
2018 2018
66 and 4 months 66 and 4 months
1957 1957
2019 2019
66 and 6 months 66 and 6 months
1958 1958
2020 2020
66 and 8 months 66 and 8 months
1959 1959
2021 2021
66 and 10 months 66 and 10 months
1960 or later 1960 or later
2022 or later 2022 or later
67 67
Source: Social Security Administration,Social Security Administration, Office of the Chief Actuary, “NormalOffice of the Chief Actuary, “Normal Retirement Age,” Retirement Age,”
http://www.ssa.gov/OACT/progdata/nra.html. http://www.ssa.gov/OACT/progdata/nra.html.
Adjustments for Early and Late Benefit Claim
Retired workers may claim benefits when they turn 62 years old, but the longer that they wait, the Retired workers may claim benefits when they turn 62 years old, but the longer that they wait, the
higher their monthly benefit. The higher monthly benefit is intended to offset the fewer number of higher their monthly benefit. The higher monthly benefit is intended to offset the fewer number of
payments that people who delay claiming payments that people who delay claiming ~~wil~~ will receive over their lifetimes so that the total value receive over their lifetimes so that the total value
of lifetime benefits is approximately the same based on average life expectancy, regardless of of lifetime benefits is approximately the same based on average life expectancy, regardless of
when they claim.19 when they claim.19
The permanent reduction in monthly benefits that applies to people who claim The permanent reduction in monthly benefits that applies to people who claim before the FRA is the FRA is
an an actuarial reduction. It equals five-ninths of 1% for each month (6⅔% per year) for the first . It equals five-ninths of 1% for each month (6⅔% per year) for the first
three years of early claim and five-twelfths of 1% for each month (5% per year) beyond 36 three years of early claim and five-twelfths of 1% for each month (5% per year) beyond 36
months. months.
The permanent increase in monthly benefits that applies to those who claim The permanent increase in monthly benefits that applies to those who claim after the FRA is the FRA is
~~cal ed~~called the the delayed retirement credit (DRC). For people born in 1943 and later, that credit is 8% (DRC). For people born in 1943 and later, that credit is 8%
for each year of delayed claim after the FRA up to age 70.20for each year of delayed claim after the FRA up to age 70.20
For people with an FRA of 66, therefore, monthly benefits are 75% of the PIA for those who For people with an FRA of 66, therefore, monthly benefits are 75% of the PIA for those who
claim benefits at the age of 62 and 132% of the PIA for people who wait until the age of 70 to claim benefits at the age of 62 and 132% of the PIA for people who wait until the age of 70 to
claim (claim (seesee Table B-2). Because people who claim earlier receive more payments over a lifetime, . Because people who claim earlier receive more payments over a lifetime,
al all else equal, the else equal, the ~~overal~~ overall effect of claiming at different ages depends on how long the beneficiary effect of claiming at different ages depends on how long the beneficiary
lives. lives.
Workers with a higher FRA may receive relatively Workers with a higher FRA may receive relatively lower benefits for two reasons. First, monthly lower benefits for two reasons. First, monthly
benefits benefits ~~wil~~ will be different for individuals who have identical work histories and the same age of be different for individuals who have identical work histories and the same age of
claiming benefits but different FRAs. For example, someone with an FRA of 66 who claims at claiming benefits but different FRAs. For example, someone with an FRA of 66 who claims at

~~19 Said~~ 19 Said differently, adjustments for early or late benefit claiming differently, adjustments for early or late benefit claiming isare intended to be intended to be actuarially equivalent. Under average . Under average
life expectancies, early claimants receive smaller benefits but over a longer period of time, whereas late claimants life expectancies, early claimants receive smaller benefits but over a longer period of time, whereas late claimants
receive higher benefits for a shorter period of time. Average life expectancies vary across demographic groups suchreceive higher benefits for a shorter period of time. Average life expectancies vary across demographic groups such as as
age, race, and sex. For more information, see CRSage, race, and sex. For more information, see CRS Report R44846, Report R44846, The Growing Gap in Life Expectancy by ~~Incom e:~~
Income: Recent Evidence and ~~Im plications~~Implications for the Social Security ~~Retirem ent~~Retirement Age. .
20 For people born before 1943, 20 For people born before 1943, ~~t he~~the DRC varies from 3.0% to 7.5% depending DRC varies from 3.0% to 7.5% depending on the year of birth. Seeon the year of birth. See “Delayed “Delayed
Retirement Credit” in OCACTRetirement Credit” in OCACT , “, “ Early or Late Retirement?,” http://www.ssa.gov/OACTEarly or Late Retirement?,” http://www.ssa.gov/OACT /quickcalc/early_late.html#late. /quickcalc/early_late.html#late.
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age 62 age 62 ~~wil~~ will receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67, receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67,
claiming at 62 claiming at 62 ~~wil~~ will result in a monthly benefit that is 70% of the PIA. Depending on the claiming result in a monthly benefit that is 70% of the PIA. Depending on the claiming
age, the scheduled increase in the FRA from 66 to 67 age, the scheduled increase in the FRA from 66 to 67 ~~wil~~ will reduce monthly benefits for workers reduce monthly benefits for workers
with similar earnings by between 6.1% and 7.7%. Second, lifetime benefits with similar earnings by between 6.1% and 7.7%. Second, lifetime benefits ~~wil~~ will be different for be different for
workers who have identical work histories and identical age of death but different FRAs. For workers who have identical work histories and identical age of death but different FRAs. For
example, consider two workers who have FRAs of 65 and 67, respectively, both of whom claim example, consider two workers who have FRAs of 65 and 67, respectively, both of whom claim
at their FRA and thus receive identical monthly benefits. If both workers die at age 75, the worker at their FRA and thus receive identical monthly benefits. If both workers die at age 75, the worker
with an FRA of 65 with an FRA of 65 ~~wil~~ will have received monthly benefits for 10 years, compared with the worker have received monthly benefits for 10 years, compared with the worker
with an FRA of 67, who with an FRA of 67, who ~~wil~~ will have received monthly benefits for eight years. have received monthly benefits for eight years.
Cost-of-Living Adjustments
A COLA is applied to the benefit beginning in the second year of eligibility,A COLA is applied to the benefit beginning in the second year of eligibility, which for retired which for retired
workers is age 63. The COLA applies even if a worker has not yet begun to receive benefits. The workers is age 63. The COLA applies even if a worker has not yet begun to receive benefits. The
COLA COLA ~~usual y~~usually equals the growth in the Consumer Price Index for Urban Wage Earners and equals the growth in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) from the third quarter of one calendar year to the third quarter of the Clerical Workers (CPI-W) from the third quarter of one calendar year to the third quarter of the
next calendar year. The COLA becomes effective in December of the current year and is payable next calendar year. The COLA becomes effective in December of the current year and is payable
in January of the following year.21 Beneficiaries in January of the following year.21 Beneficiaries ~~wil~~ will receive a COLA of receive a COLA of ~~1.3~~5.9% for benefits paid in % for benefits paid in
January January ~~2021~~2022.22 .22
Benefit Amounts for Hypothetical Workers Born in ~~1951~~1952
As discussed, the PIA is not the benefit amount a worker receives. Adjustments to the PIA for As discussed, the PIA is not the benefit amount a worker receives. Adjustments to the PIA for
early or late claimingearly or late claiming (relative to a worker’s FRA) interact with COLAs to produce the actual (relative to a worker’s FRA) interact with COLAs to produce the actual
benefit amount. These two factors affect benefit amount. These two factors affect al all claimants, while other adjustments may affect only claimants, while other adjustments may affect only
some claimants (see some claimants (see “Other Adjustments to Benefits”)). Table 4 shows how claiming age—and shows how claiming age—and
the associated actuarial reduction or DRC—works with COLAs to produce benefit amounts the associated actuarial reduction or DRC—works with COLAs to produce benefit amounts
before other adjustments. before other adjustments. ~~Specifical y~~Specifically, Table 4 shows first how the PIA is adjusted for the shows first how the PIA is adjusted for the
claimant’s age. For instance, a worker born in claimant’s age. For instance, a worker born in ~~1951~~1952 (FRA of 66) claiming at age 62 (48 months (FRA of 66) claiming at age 62 (48 months
before FRA) would receive 75% of his or her PIA. This reduction represents five-ninths of 1% before FRA) would receive 75% of his or her PIA. This reduction represents five-ninths of 1%
reduction for 36 months and a five-twelfths of 1% reduction for 12 reduction for 36 months and a five-twelfths of 1% reduction for 12 ~~months~~months. Table 4 also shows also shows
how COLAs begin to affect benefit amounts beginning at age 63. For instance, a worker born in how COLAs begin to affect benefit amounts beginning at age 63. For instance, a worker born in
~~1951~~1952 claiming at age 66 (i.e., FRA) would receive 100% of his or her PIA plus COLAs for claiming at age 66 (i.e., FRA) would receive 100% of his or her PIA plus COLAs for ~~2014,~~
~~2015, and 2017~~2015, 2017, and 2018. (There was no COLA payable for 2016; . (There was no COLA payable for 2016; seesee Table B-1.) ~~Additional y,~~ Additionally, since the since the
COLAs represent a percentage change in benefit amounts that increase the base benefit, benefits COLAs represent a percentage change in benefit amounts that increase the base benefit, benefits
demonstrate cumulative growth with each COLA increase. Lastly, workers claiming benefits after demonstrate cumulative growth with each COLA increase. Lastly, workers claiming benefits after
FRA receive DRCs. For instance, a worker born in FRA receive DRCs. For instance, a worker born in ~~1951~~1952 claiming at age 70 would receive 132% claiming at age 70 would receive 132%
of his or her PIA plus of his or her PIA plus al all of the payable COLAs from of the payable COLAs from ~~2014~~2015 through through ~~2021~~2022. .
Adjustments for early or late claiming and COLAs can have significant effects on a worker’s Adjustments for early or late claiming and COLAs can have significant effects on a worker’s
benefit amount. For instance, a medium earner born in benefit amount. For instance, a medium earner born in ~~1951~~1952 claiming benefits at age 62, the claiming benefits at age 62, the
earliest eligibilityearliest eligibility age, would receive initialage, would receive initial benefits of $1,benefits of $1,~~201~~238. Those benefits would increase by . Those benefits would increase by
annual COLAs: benefits of $1,annual COLAs: benefits of $1,~~201~~238 at age 62 would grow to $1, at age 62 would grow to $1,~~341~~442 at age 70. (This amount at age 70. (This amount

~~21 Social~~ 21 Social Security payments always reflect the benefits dueSecurity payments always reflect the benefits due for the preceding month. for the preceding month.
22 SSA,22 SSA, ~~2020~~ 2022 Social Security Changes, https://www.ssa.gov/news/press/factsheets/, https://www.ssa.gov/news/press/factsheets/~~colafacts2020~~colafacts2022.pdf. If the CPI-W .pdf. If the CPI-W
does not increase over the relevant period, no COLA is payable. No COLA wasdoes not increase over the relevant period, no COLA is payable. No COLA was payable in January 2010 or January payable in January 2010 or January
2011, because2011, because the CPI-W for the third quarter of 2009 and for the third quarter of 2010 were both lower than the CPIthe CPI-W for the third quarter of 2009 and for the third quarter of 2010 were both lower than the CPI --
W for the third quarter of 2008. No COLA wasW for the third quarter of 2008. No COLA was payable in January 2016 becausepayable in January 2016 because the CPI-W for the third quarter of the CPI-W for the third quarter of
2015 was2015 was lower than the CPI-W for the third quarter of 2014. For details, see CRSlower than the CPI-W for the third quarter of 2014. For details, see CRS Report 94-803, Report 94-803, Social Security:
Cost-of-Living ~~Adjustm ents~~Adjustments. .
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reflects reflects ~~11.73~~16.58% in cumulative COLAs.23) In comparison, a medium earner born in % in cumulative COLAs.23) In comparison, a medium earner born in ~~1951~~1952 claiming claiming
benefits at age 70, thereby taking advantage of benefits at age 70, thereby taking advantage of al all possible DRCs, would receive initialpossible DRCs, would receive initial benefits benefits
of $2,of $2,~~362~~540. (This amount reflects a 32% increase from DRCs and . (This amount reflects a 32% increase from DRCs and ~~an 11.73~~a 16.58% increase from % increase from
COLAs.) COLAs.)
Table 4. Monthly Benefit Amounts for Hypothetical Workers Born in ~~1951~~1952, by
Earnings Level at Claiming Age
Primary insurance amounts (PIAs) adjusted for claiming age relative to Primary insurance amounts (PIAs) adjusted for claiming age relative to ~~ful~~ full retirement age (FRA) and cost-retirement age (FRA) and cost-
of-living adjustments (COLAs) of-living adjustments (COLAs)
~~Percent~~Year/Age Percent COLA
Very Low
Low
Medium
High
Maximum
~~Year/Age~~
of PIA
~~COLA~~
Earner
Earner
Earner
Earner
Earner

PIAs from Table 2.

$ $~~744.50~~
~~$973.00~~
~~$1,601.80~~
~~$2,126.70~~
~~$2,550.00~~

~~Benefit Amounts~~
~~2013/62~~
~~75%~~
-
~~558.00~~
~~729.00~~
~~1,201.00~~
~~1,595.00~~
~~1,912.00~~
~~2014/63~~
~~80%~~
~~1.5%~~
~~604.00~~
~~790.00~~
~~1,300.00~~
~~1,726.00~~
~~2,070.00~~
~~2015/64~~
~~86.66%~~
~~1.7%~~
~~665.00~~
~~870.00~~
~~1,432.00~~
~~1,902.00~~
~~2,281.00~~
~~2016/65~~
~~93.33%~~
~~0.0%~~
~~717.00~~
~~937.00~~
~~1,543.00~~
~~2,048.00~~
~~2,456.00~~
~~2017/66~~
~~100%~~
~~0.3%~~
~~770.00~~
~~1,007.00~~
~~1,658.00~~
~~2,201.00~~
~~2,640.00~~
~~2018/67~~
~~108%~~
~~2.0%~~
~~849.00~~
~~1,109.00~~
~~1,826.00~~
~~2,425.00~~
~~2,908.00~~
~~2019/68~~
~~116%~~
~~2.8%~~
~~937.00~~
~~1,225.00~~
~~2,017.00~~
~~2,678.00~~
~~3,211.00~~
~~2020/69~~
~~124%~~
~~1.6%~~
~~1,018.00~~
~~1,330.00~~
~~2,190.00~~
~~2,908.00~~
~~3,487.00~~
~~2021/70~~
~~132%~~
~~1.3%~~
~~1,098.00~~
~~1,435.00~~
~~2,362.00~~
~~3,136.00~~
~~3,760~~767.60 $1,003.20 $1,650.80 $2,192.30 $2,642.60 Benefit Amounts 2014/62 75% - 575.00 752.00 1,238.00 1,644.00 1,981.00 2015/63 80% 1.7% 624.00 816.00 1,343.00 1,783.00 2,150 2016/64 86.66% 0.0% 676.00 884.00 1,454.00 1,932.00 2,329.00 2017/65 93.33% 0.3% 730.00 955.00 1,571.00 2,087.00 2,515.00 2018/66 100% 2.0% 798.00 1,043.00 1,717.00 2,280.00 2,749.00 2019/67 108% 2.8% 886.00 1,158.00 1,906.00 2,532.00 3,052.00 2020/68 116% 1.6% 967.00 1,264.00 2,080.00 2,763.00 3,331.00 2021/69 124% 1.3% 1,047.00 1,369.00 2,253.00 2,992.00 3,607.00 2022/70 132% 5.9% 1,181.00 1,543.00 2,540.00 3,373.00 4,066.00 .00
Source: CRS. CRS.
Notes: Under current law, monthly benefit amounts are rounded down to the nearest dol ar (42 U.S.C. Under current law, monthly benefit amounts are rounded down to the nearest dol ar (42 U.S.C.
§415(g)). §415(g)).
Features of the Benefit Formula
In the AIME computation, earnings are indexed to the AWI, and the bend points in the benefit In the AIME computation, earnings are indexed to the AWI, and the bend points in the benefit
formula are also indexed to growth in the AWI. As a result, replacement rates—the portion of formula are also indexed to growth in the AWI. As a result, replacement rates—the portion of
earnings that benefits replace—remain earnings that benefits replace—remain ~~general y~~generally stable. That is, from year to year, the average stable. That is, from year to year, the average
benefits that benefits that new beneficiaries receive increase at approximately the same rate as average beneficiaries receive increase at approximately the same rate as average
earnings in the economy. earnings in the economy.
As demonstrated i As demonstrated in Table 2, ~~the~~ the benefit formula is benefit formula is ~~general y~~generally considered to be considered to be progressive. In this . In this
context, context, progressive means that a higher share of earnings means that a higher share of earnings ~~are~~is replaced for career low earners than replaced for career low earners than
for career higher earners. However, although low lifetime earners have a higherfor career higher earners. However, although low lifetime earners have a higher replacement rate, replacement rate,
they do not receive higher benefits compared to relatively higher lifetime earners. This feature is they do not receive higher benefits compared to relatively higher lifetime earners. This feature is
often referred to as often referred to as individual equity. That is, higher lifetime earners receive higher benefits. . That is, higher lifetime earners receive higher benefits.
~~Additional y,~~ Additionally, as shown ias shown in Table 4, a worker who claimed benefits early—before reaching FRA—a worker who claimed benefits early—before reaching FRA—
would receive lower monthly benefits than if he or she claimed at FRA. Furthermore, a worker would receive lower monthly benefits than if he or she claimed at FRA. Furthermore, a worker

~~23 T he~~ 23 The cumulative effect of the COLAs shown cumulative effect of the COLAs shown inin Table 4 ~~is 11.73~~is 16.58%. %.
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who claimed benefits late—after reaching FRA—would receive higher monthly benefits than if who claimed benefits late—after reaching FRA—would receive higher monthly benefits than if
he or she claimed at FRA. This feature is known as he or she claimed at FRA. This feature is known as actuarial equivalence, because the intent is to , because the intent is to
provide the same amount of lifetime benefits regardless of when a worker claims benefits.24provide the same amount of lifetime benefits regardless of when a worker claims benefits.24
Lastly, Lastly, al all things being equal, the more years a worker is able to work, the higher dollar amount things being equal, the more years a worker is able to work, the higher dollar amount
he or she may receive in benefits. Said differently, years of zero earnings he or she may receive in benefits. Said differently, years of zero earnings ~~wil general y~~will generally result in result in
lower lifetimelower lifetime earnings in the Social Security benefit computation. Consider the hypothetical earnings in the Social Security benefit computation. Consider the hypothetical
earners born in earners born in ~~1951~~1952 who are assumed to have worked continuously. If each scaled earner’s who are assumed to have worked continuously. If each scaled earner’s
highest year of earnings was replaced with a zero (representing a year out of the workforce, for highest year of earnings was replaced with a zero (representing a year out of the workforce, for
example, for education, caregiving or any other reason), his or her highest 35 years of wage-example, for education, caregiving or any other reason), his or her highest 35 years of wage-
indexed earnings, the amount used to compute AIME, and PIA would indexed earnings, the amount used to compute AIME, and PIA would al all decrease. (See Scenario decrease. (See Scenario
B inB in Table 5. Scenario A reproduces information for hypothetical earners from previous sections.) Scenario A reproduces information for hypothetical earners from previous sections.)
The replacement rate—measured as percent of AIME replaced by PIA—increases for some The replacement rate—measured as percent of AIME replaced by PIA—increases for some
earners. In Scenario B, the highest year of earnings (occurring in the hypothetical worker’s late earners. In Scenario B, the highest year of earnings (occurring in the hypothetical worker’s late
40s) was replaced by a year of lower earnings. This has the effect of 40s) was replaced by a year of lower earnings. This has the effect of ~~essential y~~essentially taking the taking the
second- through 36th-highest years of earnings second- through 36th-highest years of earnings fromfrom Table A-3. .
Scenario B demonstrates how a worker can benefit from Scenario B demonstrates how a worker can benefit from more work. That is, since the highest 35 work. That is, since the highest 35
years of earnings are used in the benefit formula, the hypothetical earners years of earnings are used in the benefit formula, the hypothetical earners ~~stil~~ still had 35 years of had 35 years of
earnings. However, if a worker does not have 35 years of earnings, the benefit formula earnings. However, if a worker does not have 35 years of earnings, the benefit formula ~~wil~~
will impute years of zero earnings. Consider the same hypothetical earners born in impute years of zero earnings. Consider the same hypothetical earners born in ~~1951~~1952 but with a but with a
longer break in employment (for example, representing years out of the workforce for education, longer break in employment (for example, representing years out of the workforce for education,
caregiving, or unemployment) of caregiving, or unemployment) of ~~six~~seven years. In this example, Scenario C, the hypothetical workers years. In this example, Scenario C, the hypothetical workers
would not have years of would not have years of extra earnings, and one year of zero earnings would be used in earnings, and one year of zero earnings would be used in their benefit calculations~~their~~
~~benefit calculations~~. Table 5 shows how their highest 35 years of wage-indexed earnings, AIME, shows how their highest 35 years of wage-indexed earnings, AIME,
and PIA would decrease. As in the previous example, as a result of a decrease in cumulative and PIA would decrease. As in the previous example, as a result of a decrease in cumulative
lifetime earnings, some replacement rates increase. This has the effect of lifetime earnings, some replacement rates increase. This has the effect of ~~essential y~~ essentially taking the taking the
~~seventh~~eighth- through 41st-highest years of earnings - through 41st-highest years of earnings fromfrom Table A-3. . ~~Since~~Since the hypothetical earners the hypothetical earners
had had ~~40 years~~41 years (from age 21 through age 61) of earnings, the highest 35 years of earnings would now include one year of zero of earnings, the highest 35 years of earnings would now include one year of zero
earnings. earnings.
Table 5. Wage-Indexed Earnings, Average Indexed Monthly Earnings (AIMEs), and
Primary Insurance Amounts (PIAs) for Hypothetical Earners Born in ~~1951~~1952, by
Earnings Level and Years of Earnings
Very Low
Low
Medium
Maximum

Earner
Earner
Earner
High Earner
Earner
Scenario A ( Scenario A (~~from~~from Table 1 andand Table 2)
Total Earnings from Total Earnings from
Highest 35 Years of Highest 35 Years of
$ $~~375,065.37~~
~~$675,159.58~~
~~$1,500,603.99~~
~~$2,400,932.27~~
~~$3,586,573.11~~386,516.41 $6695,712.0 $1,545,756.54 $2,473,343.43 $3,734,047.63
Waged Indexed Earnings Waged Indexed Earnings
4 AIME AIME
~~893~~920.00 .00
1, 1,~~607~~656.00 .00
3, 3,~~572~~680.00 .00
5, 5,~~716~~888.00 .00
8, 8,~~538~~890.00 .00
PIA PIA
~~744.50~~
~~973.00~~
~~1,601.80~~
~~2,216.70~~
~~2,550.00~~767.60 1,003.20 1,650.80 2,192.30 2,642.60
PIA as Percent of AIME PIA as Percent of AIME
83% 83%
61% 61%
45% 45%
37% 37%
30% 30%
Scenario B (Scenario A with highest year of earnings removed) Scenario B (Scenario A with highest year of earnings removed)

24 Actuarial equivalence24 Actuarial equivalence is dependent on life expectancies, which are known to vary by demographic group. See is dependent on life expectancies, which are known to vary by demographic group. See
~~foot note 19~~footnote 19. .
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Total Earnings from Total Earnings from
Highest 35 Years of Highest 35 Years of
$ $~~363,288.96~~
~~$653,927.65~~
~~$1,453,412.38~~
~~$2,325,460.07~~
~~$3,473,823.39~~381,685.35 $687,025.00 $1,526,387.97 $2,442,406.91 $3,692,557.35
Waged Indexed Earnings Waged Indexed Earnings
AIME AIME
~~864~~908.00 .00
1, 1,~~556~~635.00 .00
3, 3,~~460~~634.00 .00
5, 5,~~536~~815.00 .00
8, 8,~~269~~791.00 .00
PIA PIA
~~735.20~~
~~956.70~~
~~1,565.90~~
~~2,099.70~~
~~2,509.60~~763.80 996.40 1,636.10 2,181.40 2,627.80
PIA as Percent of AIME PIA as Percent of AIME
8584% %
61% 61%
45% 45%
38% 38%
30% 30%
Percent Reduction in PIA Percent Reduction in PIA
1%
2%
2%
1%
2%
~~from Scenario A~~from Scenario A 0.5% 0.7% 0.9% 0.5% 0.6%
Scenario C (Scenario A with highest Scenario C (Scenario A with highest ~~six~~seven years of earnings removed) years of earnings removed)
Total Earnings from Total Earnings from
Highest 35 Years of Highest 35 Years of
$ $~~292,716.44~~
~~$526,879.92~~
~~$1,171,036.34~~
~~$1,873,701.39~~
~~$2,817,404.77~~333,684.98 $600,597.74 $1,334,164.89 $2,135,036.12 $3,371,699.59
Waged Indexed Earnings Waged Indexed Earnings
AIME AIME
~~696~~794.00 .00
1, 1,~~254~~429.00 .00
~~2,788~~3,176.00 .00
~~4,461~~5,083.00 .00
~~6,707~~8,027.00 PIA 714.60 930.50 1,489.60 2,071.60 2,513.20~~.00~~
~~PIA~~
~~626.40~~
~~860.00~~
~~1350.90~~
~~1886.30~~
~~2,275.30~~
PIA as Percent of AIME PIA as Percent of AIME
90% 90%
6965% %
4847% %
4241% %
3431% %
Percent Reduction in PIA Percent Reduction in PIA
from Scenario A from Scenario A
166.9% %
127.2% %
169.8% %
115.5% %
114.9% %
Source: CRS. CRS.
Note: Wage-indexed earnings are rounded to the nearest cent, and AIMEs are rounded down to the nearest Wage-indexed earnings are rounded to the nearest cent, and AIMEs are rounded down to the nearest
dol ar (see 20 C.F.R. §404.211). Under current law, PIA is rounded down to the nearest dimedol ar (see 20 C.F.R. §404.211). Under current law, PIA is rounded down to the nearest dime (42 U.S.C. (42 U.S.C.
§415(a)(1)(A)). §415(a)(1)(A)).
Auxiliary Benefits
Although the majority of Social Security benefits are paid to retired or disabled workers, many Although the majority of Social Security benefits are paid to retired or disabled workers, many
family members of workers are eligible to receive auxiliaryfamily members of workers are eligible to receive auxiliary benefits based on the workers’ benefits based on the workers’
earnings. In earnings. In ~~December 2020, 10.4 mil ion~~September 2021, 10.1 million family members of retired, disabled, or deceased family members of retired, disabled, or deceased
workers received Social Security auxiliary benefits (about workers received Social Security auxiliary benefits (about ~~16.0~~15.5% of the beneficiary population).25 % of the beneficiary population).25
Social Security auxiliary benefits are payable to the spouse, divorced spouse, or dependent child Social Security auxiliary benefits are payable to the spouse, divorced spouse, or dependent child
of a retired or disabled worker and to the widow(er), divorced widow(er), dependent child, or of a retired or disabled worker and to the widow(er), divorced widow(er), dependent child, or
parent of a deceased worker.26 When dependent beneficiaries also earned worker benefits, they parent of a deceased worker.26 When dependent beneficiaries also earned worker benefits, they
receive the larger of the worker or the auxiliary benefit.27 receive the larger of the worker or the auxiliary benefit.27
Benefits payable to family members are equal to a specified percentage of the worker’s PIA, Benefits payable to family members are equal to a specified percentage of the worker’s PIA,
subject to a subject to a maximum family benefit. A spouse’s base benefit (that is, before any adjustments) . A spouse’s base benefit (that is, before any adjustments)
equals 50% of the worker’s PIA. A widow(er)’s base benefit is 100% of the worker’s PIA. The equals 50% of the worker’s PIA. A widow(er)’s base benefit is 100% of the worker’s PIA. The
base benefit for children of a retired or disabled worker is 50% of the worker’s PIA, and the base base benefit for children of a retired or disabled worker is 50% of the worker’s PIA, and the base
benefit for children of deceased workers is 75% of the worker’s PIA. Benefits payable to family benefit for children of deceased workers is 75% of the worker’s PIA. Benefits payable to family

~~25 SSA,~~ 25 SSA, “Monthly Statistical Snapshot, “Monthly Statistical Snapshot, ~~December 2020,” T able~~September 2021,” Table 2. See the latest edition of the Monthly Statistical 2. See the latest edition of the Monthly Statistical
Snapshot at https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/. Snapshot at https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.
26 The~~26 T he~~ computation of dependent benefits may be quite computation of dependent benefits may be quite complex. For additional detailscomplex. For additional details and information on other and information on other
dependent benefits, see “Benefits for the Worker’s Family Members” in CRSdependent benefits, see “Benefits for the Worker’s Family Members” in CRS Report R42035, Report R42035, Social Security Primer. .
27 Someone with an auxiliary benefit higher than his or her retired-worker benefit is referred to as dually27 Someone with an auxiliary benefit higher than his or her retired-worker benefit is referred to as dually entitled and entitled and
receives his or her retired-worker benefit plus a reducedreceives his or her retired-worker benefit plus a reduced auxiliary benefit amount equalauxiliary benefit amount equal to the full auxiliary benefitto the full auxiliary benefit
minus the retired-worker benefit, in essence receiving the higher auxiliary benefit amount. For more information on minus the retired-worker benefit, in essence receiving the higher auxiliary benefit amount. For more information on
dualdual entitlement, see CRSentitlement, see CRS In FocusIn Focus IF10738, IF10738, Social Security Dual ~~Entitlem ent~~Entitlement. .
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members may be subject to adjustments based on the family member’s age at entitlement, receipt members may be subject to adjustments based on the family member’s age at entitlement, receipt
of a Social Security benefit based on his or her own work record, and other factors.28of a Social Security benefit based on his or her own work record, and other factors.28
Table C-1 provides a summary of Social Security benefits payable to the family members of a provides a summary of Social Security benefits payable to the family members of a
retired, disabled, or deceased worker. It includes the basic eligibility requirements and basic retired, disabled, or deceased worker. It includes the basic eligibility requirements and basic
benefit amounts before any applicable adjustments (such as for the maximum family benefit). benefit amounts before any applicable adjustments (such as for the maximum family benefit).
Maximum Family Benefits
The total amount of Social Security benefits payable to a family based on a retired, disabled, or The total amount of Social Security benefits payable to a family based on a retired, disabled, or
deceased worker’s record is capped by the maximum family benefit. The family maximum cannot deceased worker’s record is capped by the maximum family benefit. The family maximum cannot
be exceeded regardless of the number of beneficiaries entitled to benefits on the worker’s be exceeded regardless of the number of beneficiaries entitled to benefits on the worker’s
record.29 If the sum of record.29 If the sum of al all benefits payable on the worker’s record exceeds the family maximum, benefits payable on the worker’s record exceeds the family maximum,
the benefit payable to each dependent or survivor is reduced in equal proportion to bring the total the benefit payable to each dependent or survivor is reduced in equal proportion to bring the total
amount of benefits payable to the family within the limit. In the case of a amount of benefits payable to the family within the limit. In the case of a retired or deceased
worker, the maximum family benefit is determined by a formula and varies from 150% to 188% , the maximum family benefit is determined by a formula and varies from 150% to 188%
of the worker’s PIA. For the family of a worker who attains the age of 62 in of the worker’s PIA. For the family of a worker who attains the age of 62 in ~~2021~~2022 or dies in or dies in ~~2021~~
2022 before attaining the age of 62, the total amount of benefits payable to the family is limited tobefore attaining the age of 62, the total amount of benefits payable to the family is limited to:
 150% of the first $1,  150% of the first $1,~~272~~308 of the worker’s PIA, plus of the worker’s PIA, plus
 272% of the worker’s PIA over $1, 272% of the worker’s PIA over $1,~~272~~308 and through $1, and through $1,~~837~~889, plus , plus
 134% of the worker’s PIA over $1, 134% of the worker’s PIA over $1,~~837~~889 and through $2, and through $2,~~395~~463, plus , plus
 175% of the worker’s PIA over $2, 175% of the worker’s PIA over $2,~~395~~463.30 .30
The dollar amounts in the maximum family benefit formula ($1, The dollar amounts in the maximum family benefit formula ($1,~~272/$1,837/$2,395 in 2021~~308/$1,889/$2,463 in 2022) are ) are
indexed to the AWI, as in the regular benefit formula. In the case of a indexed to the AWI, as in the regular benefit formula. In the case of a disabled worker, the , the
maximum family benefit is equal to 85% of the worker’s AIME. However, the family maximum maximum family benefit is equal to 85% of the worker’s AIME. However, the family maximum
cannot be cannot be less than 100% or or more than 150% of the worker’s PIA.31 of the worker’s PIA.31
Other Adjustments to Benefits
Other benefit adjustments apply in certain situations, includingOther benefit adjustments apply in certain situations, including:
 the  the windfall elimination provision, which reduces benefits for , which reduces benefits for worker
beneficiaries who have pensions from employment that was not subject to Social beneficiaries who have pensions from employment that was not subject to Social
Security payroll taxes;32 Security payroll taxes;32
 the  the government pension offset, which reduces Social Security , which reduces Social Security spousal benefits benefits
paid to people who have pensions from employment that was not subject to paid to people who have pensions from employment that was not subject to
Social Security payroll taxes;33 and Social Security payroll taxes;33 and

~~28 Similar~~ 28 Similar to a worker’s benefit, auxiliary benefits paid to family members may also beto a worker’s benefit, auxiliary benefits paid to family members may also be subject to adjustment basedsubject to adjustment based on on
age. For more information, see CRSage. For more information, see CRS Report R41479, Report R41479, Social Security: Revisiting Benefits for Spouses and Survivors. .
29 Social 29 Social Security Act, Security Act, ~~T itle~~Title II, §203. II, §203.
30 SSA,30 SSA, “Formula for Family Maximum Benefit,” https://www.socialsecurity.gov/OACT“Formula for Family Maximum Benefit,” https://www.socialsecurity.gov/OACT /COLA/familymax.html. /COLA/familymax.html.
31 Benefits for a divorced beneficiary are not taken into account for purposes of the family maximum. See SSA, 31 Benefits for a divorced beneficiary are not taken into account for purposes of the family maximum. See SSA,
“Family Benefits Where a Divorced Spouse“Family Benefits Where a Divorced Spouse or a Survivingor a Surviving Divorced SpouseDivorced Spouse is Entitled,” https://secure.ssa.gov/apps10/is Entitled,” https://secure.ssa.gov/apps10/
poms.nsf/lnx/0300615682. poms.nsf/lnx/0300615682.
32 See 32 See ~~CRS~~ CRS Report 98-35, Report 98-35, Social Security: The Windfall Elimination Provision (WEP). .
33 See33 See ~~CRS~~ CRS Report RL32453, Report RL32453, Social Security: The Government Pension Offset (GPO). .
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 the  the retirement earnings test, which results in a temporary withholding of monthly , which results in a temporary withholding of monthly
Social Security benefits paid to beneficiaries who are younger than FRA and Social Security benefits paid to beneficiaries who are younger than FRA and
have earnings above a certain level.34 have earnings above a certain level.34

~~34 See CRS~~ 34 See CRS Report R41242, Report R41242, Social Security Retirement Earnings Test: How Earnings Affect Benefits. .
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Appendix A. Hypothetical Workers, Wages, and
Indexed Wages
SSA’s Office of the Chief Actuary (OCACT) uses hypothetical earnings patterns to evaluate the SSA’s Office of the Chief Actuary (OCACT) uses hypothetical earnings patterns to evaluate the
program under current law and to program under current law and to ~~il ustrate~~illustrate how program changes may affect beneficiaries.35 how program changes may affect beneficiaries.35
OCACT publishes scaled factors for very low, low, medium, and high earners as a percent of OCACT publishes scaled factors for very low, low, medium, and high earners as a percent of
AWI. Hypothetical workers are assumed to have long and consistent earnings at their respective AWI. Hypothetical workers are assumed to have long and consistent earnings at their respective
levels. At these levels, hypothetical workers have earnings from ages 21 to 64, with peak earnings levels. At these levels, hypothetical workers have earnings from ages 21 to 64, with peak earnings
in their late 40s. For instance, a hypothetical medium earner’s work history would begin at age 21 in their late 40s. For instance, a hypothetical medium earner’s work history would begin at age 21
with relativelywith relatively medium wages and wages and ~~gradual y~~gradually increase until age 50, remaining relatively increase until age 50, remaining relatively medium, ,
and then begin to decrease until age 64. The scaled factors (i.e., percent of AWI) for different and then begin to decrease until age 64. The scaled factors (i.e., percent of AWI) for different
hypothetical earnings groups are shown ihypothetical earnings groups are shown in Figure A-1. .
Figure A-1. Scaled Factors by Hypothetical Earnings Level and Age
Percent of Average Wage Index (AWI) Percent of Average Wage Index (AWI)

Source: OCACT, OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2020~~2021 Trustees Report Assumptions, ,
~~April 2020~~August 2021, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/~~an2020~~an2021-3.pdf. -3.pdf.
~~Note:~~ Notes: There is no scaled factor for a maximumThere is no scaled factor for a maximum earner. earner.
Table A-1 shows how actual workers are distributed relative to the hypothetical scaled workers. shows how actual workers are distributed relative to the hypothetical scaled workers.
As an As an ~~example,~~example, Table A-1 shows that a hypothetical medium-scaled worker retiring at age 62 in shows that a hypothetical medium-scaled worker retiring at age 62 in
~~2019~~2020 had career average earnings of $ had career average earnings of $~~51,977 (in 2018~~53,892 (in 2019 dollars). For dollars). For actual workers retiring in retiring in
years years ~~2014-2019, 56.5~~2015-2020, 56.2% had an AIME less than the hypothetical medium % had an AIME less than the hypothetical medium ~~earners~~earner with $ with $~~51,977~~53,892 in in
career-average earnings. During the same career-average earnings. During the same ~~2014-2019~~2015-2020 period, period, ~~71.2~~70.6% of female workers had an % of female workers had an
AIME less than this hypothetical medium earner, whereas 42.AIME less than this hypothetical medium earner, whereas 42.43% of males had an AIME less than % of males had an AIME less than
the hypothetical medium earnerthe hypothetical medium earner. Table A-1 also shows the percent of workers with AIMEs also shows the percent of workers with AIMEs closest
~~to hypothetical scaled workers. For instance, 30.1% of workers retiring in 2014-2019 have~~
~~AIMEs closest to that of a hypothetical medium-scaled worker.~~

~~35 OCACT ,~~ 35 OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2020~~2021 Trustees Report Assumptions. See https://www.ssa.gov/OACT/NOTES/ran3/an2021-3.pdf. .
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to hypothetical scaled workers. For instance, 30.3% of workers retiring in 2015-2020 have AIMEs closest to that of a hypothetical medium-scaled worker. Table A-1. Distribution of Average-Indexed Monthly Earnings (AIMEs) of Actual
Workers Retiring in Years ~~2014-2019~~2015-2020, Relative to AIMEs for Hypothetical Workers
Retiring in ~~2019~~2020

Percent with AIME Less Than
Percent with AIME Closest
AIME for Hypothetical Case
to AIME for Hypothetical
~~Cas~~eaCasea
Hypothetical Workerb
All
All
All
All
All
All
(Career-Average Earnings) Males
Females
Workers Males
Females
Workers
~~(Career-Average Earnings~~)c
Very Low Very Low
7. 7.98% %
~~16.3%~~
~~12.0~~15.8% 11.8% %
12. 12.32% %
~~24.6~~23.9% %
18. 18.30% %
($ ($~~12,994~~13,473) )
Low Low
16. 16.43
32. 32.70
24. 24.40
16. 16.10
29. 29.32
22. 22.65
($ ($~~23,390~~24,252) )
Medium Medium
42. 42.4
~~71.2~~3 70.6
56. 56.52
29. 29.69
30. 30.57
30. 30.13
($ ($~~51,977~~53,892) )
High High
71. 71.5
~~92.0~~4 91.5
81. 81.52
27. 27.3
~~12.9~~1 13.2
20. 20.23
($ ($~~83,163~~86,228) )
Maximum Maximum
100.0 100.0
100.0 100.0
100.0 100.0
14. 14.79
2. 2.6
~~8.8~~
~~($127,899~~9 9.0 ($132,868) )
Source: OCACT, OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2020~~2021 Trustees Report Assumptions, ,
Actuarial Note Number Actuarial Note Number ~~2020.3, April 2020~~2021.3, August 2021, Table 1, https://www.ssa.gov/OACT/NOTES/ran3/, Table 1, https://www.ssa.gov/OACT/NOTES/ran3/~~an2020~~an2021-3.pdf. -3.pdf.
Notes: WorkerWorker distributions include individuals who are distributions include individuals who are ~~dual y~~dually entitled or may become entitled or may become ~~dual y~~dually entitled to a entitled to a
higher benefit in the future based on another worker’shigher benefit in the future based on another worker’s earnings record.earnings record. For moreFor more information on dual information on dual
entitlement,entitlement, see CRS In Focus IF10738, see CRS In Focus IF10738, Social Security Dual Entitlement..
a. Rounded values do not necessarilya. Rounded values do not necessarily sum to 100sum to 100 ~~percent~~%. The percentage of workers. The percentage of workers with AIME values with AIME values
~~closest to~~ closest to that of the hypothetical maximumthat of the hypothetical maximum ~~worker~~ worker is expected to decline in future years.is expected to decline in future years. This is due to a This is due to a
significant significant ~~increase~~ increase in the OASDI maximumin the OASDI maximum taxable earnings, relativetaxable earnings, relative to the AWI,to the AWI, in 1981 and a in 1981 and a ~~smal er~~
~~increase in 1990.~~
smaller increase in 1990. b. A hypothetical worker b. A hypothetical worker is assumed to haveis assumed to have a long and consistent long and consistent ~~careers~~ career with earnings at each age from 21 with earnings at each age from 21
through 64. through 64.
c. Career-average c. Career-average earnings of hypothetical scaled workersearnings of hypothetical scaled workers ~~retiring~~ retiring at age 62 in at age 62 in ~~2019~~2020. Earnings are wage-. Earnings are wage-
indexed to indexed to ~~2018~~2019 in this calculation. in this calculation.
Figure A-1 showed the scaled factors for each hypothetical earning levelshowed the scaled factors for each hypothetical earning level.. Table A-1 showed who showed who
in the in the actual workforce is similar and closest to the hypothetical earnings groups. To determine workforce is similar and closest to the hypothetical earnings groups. To determine
what hypothetical workers earned, the scaled factor for each age is multiplied by a year’s AWI. what hypothetical workers earned, the scaled factor for each age is multiplied by a year’s AWI.
This analysis selected the This analysis selected the ~~1951~~1952 birth cohort, the youngest birth cohort for which birth cohort, the youngest birth cohort for which al all information information
on wage-indexed and price-indexed parameters are known. The hypothetical worker for this birth on wage-indexed and price-indexed parameters are known. The hypothetical worker for this birth
cohort began work at age 21 in cohort began work at age 21 in ~~1972~~1973 and reached peak earnings sometime in the late 1990s or and reached peak earnings sometime in the late 1990s or
early 2000s. These workers reached early eligibilityearly 2000s. These workers reached early eligibility age (i.e., 62) in age (i.e., 62) in ~~2013~~2014, full retirement age (i.e., , full retirement age (i.e.,
66) in 66) in ~~2017~~2018, and age 70 in , and age 70 in ~~2021~~2022. The hypothetical earnings for each earnings level are shown in . The hypothetical earnings for each earnings level are shown in
Table A-2. Also, wages for a maximum earner—a worker who earned at or above the Also, wages for a maximum earner—a worker who earned at or above the
contributions base in each year—is shown. contributions base in each year—is shown.
~~Table A-2. Hypothetical Wages for 1951 Birth Cohort by Earnings Level~~
~~Very Low~~
~~Low~~
~~Medium~~
~~High~~
~~Maximum~~
~~Year~~
~~Age~~
~~Earner~~
~~Earner~~
~~Earner~~
~~Earner~~
~~Earner~~
~~1972~~
21
~~$527.90~~
~~$948.80~~
~~$2,104.47~~
~~$3,374.29~~
~~$9,000.00~~
~~Congressional Research Service~~
15

~~Social Security: Benefit Calculation~~
Congressional Research Service 15 Social Security: Benefit Calculation Table A-2. Hypothetical Wages for 1952 Birth Cohort by Earnings Level Year Age
Very Low
Low
Medium
High
Maximum
~~Year~~
~~Age~~
Earner
Earner
Earner
Earner
Earner
1973 1973
22
~~682.21~~
~~1,227.99~~
~~2,721.28~~
~~4,358.59~~
21 $553.35 $993.00 $2,205.83 $3,532.35 $10,800.00 10,800.00
1974 1974
23
~~907.48~~
~~1,630.24~~
~~3,629.90~~
~~5,806.24~~22 714.74 1,284.92 2,850.92 4,561.47
13,200.00 13,200.00
1975 1975
24
~~1,156.54~~
~~2,080.05~~
~~4,626.17~~
~~7,405.33~~23 966.66 1,743.45 3,866.65 6,188.37
14,100.00 14,100.00
1976 1976
2524
1, 1,~~393.20~~
~~2,509.60~~
~~5,563.57~~
~~8,912.78~~227.12 2,214.36 4,917.71 7,870.19
15,300.00 15,300.00
1977 1977
2625
1, 1,~~623.39~~
~~2,924.05~~
~~6,483.77~~
~~10,375.99~~466.92 2,640.45 5,867.66 9,388.26
16,500.00 16,500.00
1978 1978
2726
1, 1,~~900.09~~
~~3,409.60~~
~~7,589.79~~
~~12,139.43~~741.74 3,135.14 6,956.42 11,136.61
17,700.00 17,700.00
1979 1979
2827
2, 2,~~204.06~~
~~3,971.89~~
~~8,816.23~~
~~14,108.26~~054.82 3,684.91 8,196.33 13,121.02
22,900.00 22,900.00
1980 1980
2928
2, 2,~~540.23~~
~~4,567.41~~
~~10,160.93~~
~~16,242.47~~390.07 4,304.63 9,560.28 15,303.96
25,900.00 25,900.00
1981 1981
3029
2, 2,~~919.90~~
~~5,261.32~~
~~11,693.36~~
~~18,717.64~~782.17 5,013.41 11,128.66 17,808.62
29,700.00 29,700.00
1982 1982
3130
3, 3,~~211.43~~
~~5,768.94~~
~~12,816.64~~
~~20,518.25~~080.64 5,536.44 12,293.51 19,675.43
32,400.00 32,400.00
1983 1983
3231
3, 3,~~474.55~~
~~6,248.09~~
~~13,882.95~~
~~22,218.81~~352.63 6,034.74 13,395.29 21,441.61
35,700.00 35,700.00
1984 1984
3332
3, 3,~~775.61~~
~~6,792.86~~
~~15,102.43~~
~~24,170.33~~662.66 6,599.24 14,666.78 23,460.39
37,800.00 37,800.00
1985 1985
34
~~4,037.40~~
~~7,250.50~~
~~16,115.96~~
~~25,788.91~~33 3,936.47 7,065.45 15,712.22 25,149.65
39,600.00 39,600.00
1986 1986
3534
4, 4,~~243.85~~
~~7,621.60~~
~~16,958.06~~
~~27,125.97~~139.91 7,465.70 16,576.98 26,537.03
42,000.00 42,000.00
1987 1987
3635
4, 4,~~588.20~~
~~8,255.08~~
~~18,352.80~~
~~29,371.86~~496.07 8,107.66 18,002.70 28,800.64
43,800.00 43,800.00
1988 1988
3736
4, 4,~~891.51~~
~~8,796.99~~
~~19,566.05~~
~~31,301.81~~814.18 8,661.65 19,237.37 30,760.46
45,000.00 45,000.00
1989 1989
3837
5, 5,~~145.48~~
~~9,285.99~~
~~20,622.14~~
~~32,983.36~~085.19 9,145.30 20,300.55 32,500.97
48,000.00 48,000.00
1990 1990
3938
5, 5,~~446.25~~
~~9,820.07~~
~~21,827.04~~
~~34,927.47~~383.16 9,693.90 21,532.65 34,464.86
51,300.00 51,300.00
1991 1991
4039
5, 5,~~714.64~~
~~10,295.08~~
~~22,858.56~~
~~36,578.05~~649.20 10,186.02 22,618.63 36,207.26
53,400.00 53,400.00
1992 1992
4140
6, 6,~~077.89~~
~~10,917.26~~
~~24,288.61~~
~~38,852.60~~009.08 10,825.52 24,036.32 38,462.70
55,500.00 55,500.00
1993 1993
4241
6, 6,~~176.42~~
~~11,126.81~~
~~24,705.69~~
~~39,533.73~~107.02 11,011.15 24,451.23 39,140.48
57,600.00 57,600.00
1994 1994
4342
6, 6,~~389.70~~
~~11,496.71~~
~~25,558.80~~
~~40,903.58~~342.19 11,401.69 25,345.02 40,547.28
60,600.00 60,600.00
1995 1995
44
~~6,695.23~~
~~12,056.36~~
~~26,780.94~~
~~42,839.61~~43 6,645.82 11,957.54 26,558.58 42,469.03
61,200.00 61,200.00
1996 1996
4544
7, 7,~~048.58~~
~~12,697.81~~
~~28,246.15~~
~~45,167.93~~022.67 12,620.07 28,038.84 44,882.87
62,700.00 62,700.00
1997 1997
4645
7, 7,~~514.72~~
~~13,493.59~~
~~30,004.04~~
~~48,022.93~~459.87 13,438.74 29,839.49 47,748.67
65,400.00 65,400.00
1998 1998
4746
7, 7,~~908.03~~
~~14,228.69~~
~~31,632.14~~
~~50,594.10~~879.17 14,199.83 31,545.55 50,449.80
68,400.00 68,400.00
1999 1999
4847
8,348.74 8,348.74
15, 15,~~052.10~~
~~33,425.41~~
~~53,474.57~~021.63 33,394.94 53,413.63
72,600.00 72,600.00
2000 2000
4948
8,810.42 8,810.42
15, 15,~~884.48~~
~~35,273.84~~
~~56,463.86~~852.33 35,241.68 56,367.40
76,200.00 76,200.00
2001 2001
5049
9,020.61 9,020.61
16, 16,~~263.43~~
~~36,148.27~~
~~57,810.89~~230.51 36,082.42 57,712.13
80,400.00 80,400.00
2002 2002
5150
9,111.07 9,111.07
16,393.28 16,393.28
36,444.29 36,444.29
58,290.91 58,290.91
84,900.00 84,900.00
2003 2003
5251
9, 9,~~265.67~~
~~16,691.83~~
~~37,130.80~~
~~59,375.21~~299.73 16,759.96 37,267.06 59,613.66
87,000.00 87,000.00
2004 2004
5352
9, 9,~~625.11~~
~~17,360.84~~
~~38,571.73~~
~~61,707.64~~696.41 17,467.79 38,821.27 62,099.77
87,900.00 87,900.00
2005 2005
5453
9, 9,~~903.39~~
~~17,811.32~~
~~39,613.55~~
~~63,374.29~~977.29 17,959.13 39,946.13 63,928.59
90,000.00 90,000.00
2006 2006
5554
10, 10,~~203.97~~
~~18,398.07~~
~~40,893.19~~
~~65,436.84~~358.58 18,629.98 41,395.66 66,248.52
94,200.00 94,200.00
2007 2007
5655 10,707.45 19,233.01 42,749.00 68,406.48 97,500
~~10,424.61~~
~~18,788.55~~
~~41,738.86~~
~~66,790.26~~
~~97,500.00~~
~~2008~~
57
~~10,375.08~~
~~18,724.74~~
~~41,582.98~~
~~66,507.97~~
~~102,000~~.00 .00
Congressional Research Service Congressional Research Service
16 16

link to page link to page 2324 link to page link to page 2324 link to page 21 link to page 22 link to page 21 link to page 22 Social Security: Benefit Calculation

Year Age Very Low
Low
Medium
High
Maximum
~~Year~~
~~Age~~Earner Earner
Earner
Earner
Earner
~~Earner~~
~~Earner~~
~~2009~~
58
~~9,933.63~~
~~17,872.40~~
~~39,693.82~~
~~63,550.82~~
~~106,800.00~~
~~2010~~
59
~~9,793.35~~
~~17,669.70~~
~~39,256.75~~
~~62,802.46~~
~~106,800.00~~
~~2011~~
60
~~9,670.41~~
~~17,363.76~~
~~38,595.69~~
~~61,804.68~~
~~106,800.00~~
~~2012~~
61
~~9,351.87~~
~~16,797.91~~
~~37,363.17~~
~~59,789.93~~
~~110,100.00~~
~~2013~~
62
~~9,157.18~~
~~16,429.07~~
~~36,538.96~~
~~58,489.27~~
~~113,700.00~~
~~2014~~
63
~~9,156.86~~
~~16,454.46~~
~~36,534.47~~
~~58,473.75~~
~~117,000.00~~
~~2015~~
64
~~9,138.74~~
~~16,449.73~~
~~36,506.86~~
~~58,439.84~~
~~118,500.00~~
Source: CRS.
Notes: Very low, low, medium, and high earners are assumed to work at specified ages with earnings equivalent
~~to the respective scaled earners as shown in OCACT,~~ ~~Scaled Factors for Hypothetical Earnings Examples Under the~~
~~2020 Trustees Report Assumptions, April 2020, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/an2020-3.pdf. Al~~
~~dol ar values are shown in nominal terms (i.e., not indexed). Maximum earners~~ 2008 56 10,705.76 19,262.10 42,781.69 68,450.71 102,000.00 2009 57 10,259.33 18,483.07 41,037.30 65,708.54 106,800.00 2010 58 10,210.09 18,378.16 40,840.35 65,302.89 106,800.00 2011 59 10,186.17 18,309.31 40,701.69 65,114.11 106,800.00 2012 60 10,016.70 18,038.92 40,066.79 64,133.46 110,100.00 2013 61 9,516.29 17,147.28 38,154.94 61,047.90 113,700.00 2014 62 9,528.71 17,151.68 38,161.33 61,030.24 117,000.00 2015 63 9,523.53 17,171.21 38,142.21 60,989.06 118,500.00 2016 64 9,290.65 16,732.90 37,259.89 59,586.63 118,500.00 Source: CRS. Notes: Very low, low, medium, and high earners are assumed to work at specified ages with earnings equivalent to the respective scaled earners as shown in OCACT, Scaled Factors for Hypothetical Earnings Examples Under the 2021 Trustees Report Assumptions, August 2021, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/an2021-3.pdf. All dol ar values are shown in nominal terms (i.e., not indexed). Maximum earners are assumed to have earned at or are assumed to have earned at or
above the contribution base in each respectiveabove the contribution base in each respective ~~year (se~~e year (see Table B-1).
As discussed, the first step in determining benefit amounts is to index a worker’s nominal As discussed, the first step in determining benefit amounts is to index a worker’s nominal
earnings to SSA’s AWI (earnings to SSA’s AWI (seesee Table B-1). Earnings up to age 60 are wage-indexed, and earnings . Earnings up to age 60 are wage-indexed, and earnings
after age 60 are kept in nominal terms. The wage-indexed earnings for scaled hypothetical after age 60 are kept in nominal terms. The wage-indexed earnings for scaled hypothetical
workers born in workers born in ~~1951~~1952 are shown i are shown in Table A-3.
Table A-3. Wage-Indexed Hypothetical Wages for ~~1951~~1952 Birth Cohort by Earnings
Level
Highest 35 Years of Wage-Indexed Earnings Are in Bold Highest 35 Years of Wage-Indexed Earnings Are in Bold
Year Age Index
Very Low
Low
Medium
High
Maximum
~~Year~~
~~Age~~
Factora
Earner
Earner
Earner
Earner
Earner
~~1972~~1973
21 21
~~6.025~~
~~$3,180.49~~
~~$5,716.29~~
~~$12,678.98~~
~~$20,329.36~~
~~$54,223.06~~
~~1973~~
22
~~5.670~~
~~3,868.16~~
~~6,962.70~~
~~15,429.68~~
~~24,713.28~~
~~61,236.15~~
~~1974~~
23
~~5.352~~
~~4,856.70~~
~~8,724.86~~
~~19,426.78~~
~~31,074.26~~
~~70,644.73~~
~~1975~~
24
~~4.980~~
~~5,759.27~~
~~10,358.09~~
~~23,037.07~~
~~36,876.51~~
~~70,214.13~~
~~1976~~
25
~~4.658~~
~~6,489.92~~
~~11,690.45~~
~~25,916.70~~
~~41,518.30~~
~~71,271.82~~
~~1977~~
26
~~4.395~~
~~7,134.62~~
~~12,850.90~~
~~28,495.48~~
~~45,601.37~~
~~72,515.76~~
~~1978~~
27
~~4.072~~
~~7,736.33~~
~~13,882.41~~
~~30,902.34~~
~~49,426.55~~
~~72,066.78~~
~~1979~~
28
~~3.744~~
~~8,252.09~~
~~14,870.95~~
~~33,008.34~~
~~52,821.94~~
~~85,738.62~~
~~1980~~
29
~~3.435~~
~~8,724.86~~
~~15,687.56~~
~~34,899.44~~
~~55,787.53~~
~~88,957.96~~
~~1981~~
30
~~3.121~~
~~9,111.68~~
~~16,418.21~~
~~36,489.69~~
~~58,409.29~~
~~92,680.25~~
~~1982~~
31
~~2.958~~
~~9,498.49~~
~~17,062.91~~
~~37,908.02~~
~~60,687.21~~
~~95,830.07~~
~~1983~~
32
~~2.820~~
~~9,799.35~~
~~17,621.64~~
~~39,154.42~~
~~62,664.27~~
~~100,685.60~~
~~1984~~
33
~~2.664~~
~~10,057.23~~
~~18,094.42~~
~~40,228.91~~
~~64,383.46~~
~~100,689.32~~
~~1985~~
34
~~2.555~~
~~10,315.11~~
~~18,524.21~~
~~41,174.47~~
~~65,887.74~~
~~101,173.52~~
~~1986~~
35
~~2.481~~
~~10,530.00~~
~~18,911.03~~
~~42,077.04~~
~~67,306.07~~
~~104,212.12~~
~~1987~~
36
~~2.332~~
~~10,701.92~~
~~19,254.87~~
~~42,807.69~~
~~68,509.50~~
~~102,162.97~~
~~Congressional Research Service~~
17

~~link to page 22 link to page 23~~ ~~Social Security: Benefit Calculation~~

~~Index~~
~~Very Low~~
~~Low~~
~~Medium~~
~~High~~
~~Maximum~~
~~Year~~
~~Age~~
~~Factora~~
~~Earner~~
~~Earner~~
~~Earner~~
~~Earner~~
~~Earner~~
~~1988~~
37
~~2.223~~
~~10,873.84~~
~~19,555.72~~
~~43,495.37~~
~~69,583.99~~
~~100,035.09~~
~~1989~~
38
~~2.138~~
~~11,002.78~~
~~19,856.58~~
~~44,097.08~~
~~70,529.54~~
~~102,640.17~~
~~1990~~
39
~~2.044~~
~~11,131.72~~
~~20,071.48~~
~~44,612.84~~
~~71,389.13~~
~~104,853.34~~
~~1991~~
40
~~1.970~~
~~11,260.66~~
~~20,286.38~~
~~45,042.63~~
~~72,076.81~~
~~105,224.34~~
~~1992~~
41
~~1.874~~
~~11,389.60~~
~~20,458.29~~
~~45,515.41~~
~~72,807.46~~
~~104,003.69~~
~~1993~~
42
~~1.858~~
~~11,475.56~~
~~20,673.19~~
~~45,902.22~~
~~73,452.15~~
~~107,018.58~~
~~1994~~
43
~~1.809~~
~~11,561.52~~
~~20,802.13~~
~~46,246.06~~
~~74,010.89~~
~~109,649.57~~
~~1995~~
44
~~1.740~~
~~11,647.47~~
~~20,974.05~~
~~46,589.90~~
~~74,526.64~~
~~106,467.59~~
~~1996~~
45
~~1.659~~
~~11,690.45~~
~~21,060.01~~
~~46,847.77~~
~~74,913.46~~
~~103,991.35~~
~~1997~~
46
~~1.567~~
~~11,776.41~~
~~21,145.97~~
~~47,019.69~~
~~75,257.30~~
~~102,489.12~~
~~1998~~
47
~~1.489~~
~~11,776.41~~
~~21,188.95~~
~~47,105.65~~
~~75,343.26~~
~~101,859.27~~
~~1999~~
48
~~1.411~~
~~11,776.41~~
~~21,231.93~~
~~47,148.63~~
~~75,429.22~~
~~102,406.83~~
~~2000~~
49
~~1.337~~
~~11,776.41~~
~~21,231.93~~
~~47,148.63~~
~~75,472.20~~
~~101,852.42~~
~~2001~~
50
~~1.306~~
~~11,776.41~~
~~21,231.93~~
~~47,191.61~~
~~75,472.20~~
~~104,962.31~~
~~2002~~
51
~~1.293~~
~~11,776.41~~
~~21,188.95~~
~~47,105.65~~
~~75,343.26~~
~~109,736.53~~
~~2003~~
52
~~1.262~~
~~11,690.45~~
~~21,060.01~~
~~46,847.77~~
~~74,913.46~~
~~109,767.55~~
~~2004~~
53
~~1.206~~
~~11,604.49~~
~~20,931.07~~
~~46,503.94~~
~~74,397.70~~
~~105,976.48~~
~~2005~~
54
~~1.163~~
~~11,518.54~~
~~20,716.17~~
~~46,074.14~~
~~73,710.03~~
~~104,678.14~~
~~2006~~
55
~~1.112~~
~~11,346.62~~
~~20,458.29~~
~~45,472.43~~
~~72,764.48~~
~~104,748.55~~
~~2007~~
56
~~1.064~~
~~11,088.74~~
~~19,985.52~~
~~44,397.94~~
~~71,045.30~~
~~103,711.48~~
~~2008~~
57
~~1.040~~
~~10,787.88~~
~~19,469.76~~
~~43,237.49~~
~~69,154.19~~
~~106,058.39~~
~~2009~~
58
~~1.056~~
~~10,487.02~~
~~18,868.05~~
~~41,905.12~~
~~67,091.17~~
~~112,749.71~~
~~2010~~
59
~~1.031~~
~~10,100.21~~
~~18,223.35~~
~~40,486.79~~
~~64,770.27~~
~~110,146.40~~
~~2011~~
60
~~1.000~~
~~9,670.41~~
~~17,363.76~~
~~38,595.69~~
~~61,804.68~~
~~106,800.00~~
~~2012~~
61
~~1.000~~
~~9,351.87~~
~~16,797.91~~
~~37,363.17~~
~~59,789.93~~
~~110,100.00~~
~~Total Indexed Earnings~~
~~406,354.53~~
~~731,462.87~~
~~1,625,588.70~~
~~2,601,045.33~~
~~3,986,299.77~~
~~Highest 35 Years’ Indexed~~
~~Earnings~~
~~375,065.37~~
~~675,159.58~~
~~1,500,603.99~~
~~2,400,932.27~~
~~3,586,573.11~~
~~Average Indexed Monthly~~
~~Earning’s (AIME)~~
~~893.01~~
~~1,607.53~~
~~3,572.87~~
~~5,716.51~~
~~8,538.39~~
Source: CRS.
~~Note:~~
~~a. The index factor is computed by dividing the Social Security Administration’s (SSA’s) Average Wage Index~~
~~(AWI) in the year a worker turns 60 by the AWI for each year of earnings. For instance, the index factor~~
~~for 2010 is computed by dividing the AWI from 2011—the year in which the workers turned 60—by the~~
~~AWI from year 2010 (i.e., $42,979.61/$41,673.83 or 1.031). Results are displayed to three decimals. See~~
Table B-1 for AWI values.
~~Congressional Research Service~~
18

~~link to page 25 link to page 25 link to page 25 link to page 25 link to page 25~~ ~~Social Security: Benefit Calculation~~

~~Appendix B. Social Security Program Information~~
~~Table B-1. Parameters Used to Calculate Social Security Eligibility and Benefits,~~
~~Select Years~~
~~Contribution~~
~~First Primary~~
~~Amount~~
~~Average~~
~~Annual~~
~~Cost-of-~~
~~Second~~
~~Needed to~~
~~Wage~~
~~Living~~
~~and Benefit~~
~~Insurance~~
~~PIA~~
~~Earn One~~
~~Year~~
~~Index~~
~~Change~~
~~Adjustment~~
~~Base~~
~~Amount~~
~~Bend~~
~~Quarter of~~
~~(AWI)~~
~~(AWI)~~
~~(COLA)a~~
~~(Taxable~~
~~(PIA) Bend~~
~~Pointb~~
~~Coverage~~
~~Maximum)~~
~~Poin~~tb5.847 3,235.48 5,806.14 12,897.61 20,653.90 63,148.28 1974 22 5.519 3,944.63 7,091.47 15,734.19 25,174.71 72,850.64 1975 23 5.135 4,964.03 8,952.98 19,856.11 31,778.64 72,406.60 1976 24 4.804 5,894.78 10,637.20 23,623.45 37,806.38 73,497.32 1977 25 4.532 6,648.25 11,966.85 26,593.00 42,548.80 74,780.11 1978 26 4.199 7,313.08 13,163.54 29,207.98 46,759.36 74,317.10 1979 27 3.861 7,933.58 14,227.26 31,645.67 50,659.67 88,415.85 1980 28 3.542 8,465.44 15,246.65 33,861.76 54,205.40 91,735.72 1981 29 3.218 8,952.98 16,133.09 35,811.91 57,307.92 95,574.24 1982 30 3.05 9,396.19 16,886.56 37,496.13 60,011.54 98,822.41 1983 31 2.908 9,750.77 17,551.38 38,958.75 62,360.59 103,829.56 1973 21 5.847 3,235.48 5,806.14 12,897.61 20,653.90 63,148.28 1984 32 2.747 10,061.02 18,127.56 40,288.40 64,443.71 103,833.40 1985 33 2.635 10,371.27 18,615.10 41,396.44 66,260.90 104,332.71 Congressional Research Service 17 link to page 22 Social Security: Benefit Calculation Year Age Index Very Low Low Medium High Maximum Factora Earner Earner Earner Earner Earner 1986 34 2.559 10,592.88 19,102.64 42,415.84 67,900.80 107,466.20 1987 35 2.405 10,814.49 19,501.53 43,302.27 69,274.77 105,353.06 1988 36 2.292 11,036.10 19,856.11 44,100.06 70,515.78 103,158.74 1989 37 2.205 11,213.38 20,166.36 44,764.89 71,668.14 105,845.16 1990 38 2.108 11,346.35 20,432.29 45,385.39 72,643.22 108,127.44 1991 39 2.032 11,479.31 20,698.22 45,961.57 73,573.97 108,510.02 1992 40 1.932 11,612.28 20,919.83 46,449.11 74,327.44 107,251.26 1993 41 1.916 11,700.92 21,097.11 46,848.01 74,992.27 110,360.29 1994 42 1.866 11,833.89 21,274.40 47,291.22 75,657.09 113,073.43 1995 43 1.794 11,922.53 21,451.69 47,645.80 76,188.95 109,792.10 1996 44 1.71 12,011.17 21,584.65 47,956.05 76,765.13 107,238.54 1997 45 1.616 12,055.49 21,717.62 48,221.98 77,164.03 105,689.39 1998 46 1.536 12,099.82 21,806.26 48,443.59 77,474.28 105,039.88 1999 47 1.455 12,144.14 21,850.58 48,576.55 77,695.89 105,604.53 2000 48 1.378 12,144.14 21,850.58 48,576.55 77,695.89 105,032.81 2001 49 1.346 12,144.14 21,850.58 48,576.55 77,695.89 108,239.81 2002 50 1.333 12,144.14 21,850.58 48,576.55 77,695.89 113,163.11 2003 51 1.301 12,099.82 21,806.26 48,487.91 77,562.92 113,195.10 2004 52 1.243 12,055.49 21,717.62 48,266.30 77,208.35 109,285.65 2005 53 1.199 11,966.85 21,540.33 47,911.73 76,676.49 107,946.76 2006 54 1.147 11,878.21 21,363.04 47,468.51 75,967.34 108,019.38 2007 55 1.097 11,745.24 21,097.11 46,892.33 75,036.59 106,949.92 2008 56 1.072 11,479.31 20,653.90 45,872.93 73,396.69 109,370.11 2009 57 1.089 11,169.06 20,122.04 44,676.24 71,535.18 116,270.38 2010 58 1.064 10,858.81 19,545.86 43,435.24 69,452.06 113,585.78 2011 59 1.031 10,504.24 18,881.03 41,972.62 67,147.33 110,134.88 2012 60 1.000 10,016.70 18,038.92 40,066.79 64,133.46 110,100.00 2013 61 1.000 9,516.29 17,147.28 38,154.94 61,047.90 113,700.00 Total Indexed Earnings 418,516.66 753,330.22 1,673,668.88 2,678,065.22 4,165,047.67 Highest 35 Years’ Indexed Earnings 386,516.41 695,712.04 1,545,756.54 2,473,343.43 3,734,047.63 Average Indexed Monthly Earning’s (AIME) 920.28 1,656.46 3,680.37 5,888.91 8,890.59 Source: CRS. Note: Figures in bold indicate the highest 35 years of wage-indexed earnings. a. The index factor is computed by dividing the Social Security Administration’s (SSA’s) Average Wage Index (AWI) in the year a worker turns 60 by the AWI for each year of earnings. For instance, the index factor for 2010 is computed by dividing the AWI from 2011—the year in which the workers turned 60—by the Congressional Research Service 18 link to page 24 Social Security: Benefit Calculation AWI from year 2010 (i.e., $42,979.61/$41,673.83 or 1.031). Results are displayed to three decimals. See Table B-1 for AWI values. Congressional Research Service 19 link to page 26 link to page 26 link to page 26 link to page 26 link to page 26 Social Security: Benefit Calculation Appendix B. Social Security Program Information Table B-1. Parameters Used to Calculate Social Security Eligibility and Benefits, Select Years Contribution First Primary Amount Average Annual Cost-of- and Benefit Insurance Second Needed to Year Wage Change Living Base Amount PIA Earn One Index (AWI) Adjustment (Taxable (PIA) Bend Bend Quarter of (AWI) (COLA)a Maximum) Point Pointb Coverage b
(Credit)c
1951 1951
$2,799.16 $2,799.16
— —
— —
$3,600 $3,600
— —
— —
$50 $50
1952 1952
2,973.32 2,973.32
6.22% 6.22%
— —
3,600 3,600
— —
— —
$50 $50
1953 1953
3,139.44 3,139.44
5.59% 5.59%
— —
3,600 3,600
— —
— —
$50 $50
1954 1954
3,155.64 3,155.64
0.52% 0.52%
— —
3,600 3,600
— —
— —
$50 $50
1955 1955
3,301.44 3,301.44
4.62% 4.62%
— —
4,200 4,200
— —
— —
$50 $50
1956 1956
3,532.36 3,532.36
6.99% 6.99%
— —
4,200 4,200
— —
— —
$50 $50
1957 1957
3,641.72 3,641.72
3.10% 3.10%
— —
4,200 4,200
— —
— —
$50 $50
1958 1958
3,673.80 3,673.80
0.88% 0.88%
— —
4,200 4,200
— —
— —
$50 $50
1959 1959
3,855.80 3,855.80
4.95% 4.95%
— —
4,800 4,800
— —
— —
$50 $50
1960 1960
4,007.12 4,007.12
3.92% 3.92%
— —
4,800 4,800
— —
— —
$50 $50
1961 1961
4,086.76 4,086.76
1.99% 1.99%
— —
4,800 4,800
— —
— —
$50 $50
1962 1962
4,291.40 4,291.40
5.01% 5.01%
— —
4,800 4,800
— —
— —
$50 $50
1963 1963
4,396.64 4,396.64
2.45% 2.45%
— —
4,800 4,800
— —
— —
$50 $50
1964 1964
4,576.32 4,576.32
4.09% 4.09%
— —
4,800 4,800
— —
— —
$50 $50
1965 1965
4,658.72 4,658.72
1.80% 1.80%
— —
4,800 4,800
— —
— —
$50 $50
1966 1966
4,938.36 4,938.36
6.00% 6.00%
— —
6,600 6,600
— —
— —
$50 $50
1967 1967
5,213.44 5,213.44
5.57% 5.57%
— —
6,600 6,600
— —
— —
$50 $50
1968 1968
5,571.76 5,571.76
6.87% 6.87%
— —
7,800 7,800
— —
— —
$50 $50
1969 1969
5,893.76 5,893.76
5.78% 5.78%
— —
7,800 7,800
— —
— —
$50 $50
1970 1970
6,186.24 6,186.24
4.96% 4.96%
— —
7,800 7,800
— —
— —
$50 $50
1971 1971
6,497.08 6,497.08
5.02% 5.02%
— —
7,800 7,800
— —
— —
$50 $50
1972 1972
7,133.80 7,133.80
9.80% 9.80%
— —
9,000 9,000
— —
— —
$50 $50
1973 1973
7,580.16 7,580.16
6.26% 6.26%
— —
10,800 10,800
— —
— —
$50 $50
1974 1974
8,030.76 8,030.76
5.94% 5.94%
— —
13,200 13,200
— —
— —
$50 $50
1975 1975
8,630.92 8,630.92
7.47% 7.47%
— —
14,100 14,100
— —
— —
$50 $50
1976 1976
9,226.48 9,226.48
6.90% 6.90%
8.0% 8.0%
15,300 15,300
— —
— —
$50 $50
1977 1977
9,779.44 9,779.44
5.99% 5.99%
6.4% 6.4%
16,500 16,500
— —
— —
$50 $50
~~1978b~~1978b 10,556.03 10,556.03
7.94% 7.94%
5.9% 5.9%
17,700 17,700
— —
— —
250 250
1979 1979
11,479.46 11,479.46
8.75% 8.75%
6.5% 6.5%
22,900 22,900
$180 $180
$1,085 $1,085
260 260
1980 1980
12,513.46 12,513.46
9.01% 9.01%
9.9% 9.9%
25,900 25,900
194 194
1,171 1,171
290 290
Congressional Research Service Congressional Research Service
1920

link to page link to page 2526 link to page link to page 2526 link to page link to page 2526 link to page link to page 2526 Social Security: Benefit Calculation

Contribution
First Primary
Amount
Average
Annual
Cost-of-
and Benefit Insurance Second
Needed to
Year Wage
~~Living~~
~~and Benefit~~
~~Insurance~~Change Living Base Amount
PIA
Earn One
~~Year~~
Index
~~Change~~(AWI)
Adjustment
~~Base~~
~~Amount~~(Taxable (PIA) Bend
Bend
Quarter of
(AWI)
(~~AWI)~~
(COLA)a
~~(Taxable~~
~~(PIA) Bend~~
Maximum) Point Pointb
Coverage
~~Maximum)~~
~~Poin~~tbb
(Credit)c
1981 1981
13,773.10 13,773.10
10.07% 10.07%
14.3% 14.3%
29,700 29,700
211 211
1,274 1,274
310 310
1982 1982
14,531.34 14,531.34
5.51% 5.51%
11.2% 11.2%
32,400 32,400
230 230
1,388 1,388
340 340
1983 1983
15,239.24 15,239.24
4.87% 4.87%
7.4% 7.4%
35,700 35,700
254 254
1,528 1,528
370 370
1984 1984
16,135.07 16,135.07
5.88% 5.88%
3.5% 3.5%
37,800 37,800
267 267
1,612 1,612
390 390
1985 1985
16,822.51 16,822.51
4.26% 4.26%
3.5% 3.5%
39,600 39,600
280 280
1,691 1,691
410 410
1986 1986
17,321.82 17,321.82
2.97% 2.97%
3.1% 3.1%
42,000 42,000
297 297
1,790 1,790
440 440
1987 1987
18,426.51 18,426.51
6.38% 6.38%
1.3% 1.3%
43,800 43,800
310 310
1,866 1,866
460 460
1988 1988
19,334.04 19,334.04
4.93% 4.93%
4.2% 4.2%
45,000 45,000
319 319
1,922 1,922
470 470
1989 1989
20,099.55 20,099.55
3.96% 3.96%
4.0% 4.0%
48,000 48,000
339 339
2,044 2,044
500 500
1990 1990
21,027.98 21,027.98
4.62% 4.62%
4.7% 4.7%
51,300 51,300
356 356
2,145 2,145
520 520
1991 1991
21,811.60 21,811.60
3.73% 3.73%
5.4% 5.4%
53,400 53,400
370 370
2,230 2,230
540 540
1992 1992
22,935.42 22,935.42
5.15% 5.15%
3.7% 3.7%
55,500 55,500
387 387
2,333 2,333
570 570
1993 1993
23,132.67 23,132.67
0.86% 0.86%
3.0% 3.0%
57,600 57,600
401 401
2,420 2,420
590 590
1994 1994
23,753.53 23,753.53
2.68% 2.68%
2.6% 2.6%
60,600 60,600
422 422
2,545 2,545
620 620
1995 1995
24,705.66 24,705.66
4.01% 4.01%
2.8% 2.8%
61,200 61,200
426 426
2,567 2,567
630 630
1996 1996
25,913.90 25,913.90
4.89% 4.89%
2.6% 2.6%
62,700 62,700
437 437
2,635 2,635
640 640
1997 1997
27,426.00 27,426.00
5.84% 5.84%
2.9% 2.9%
65,400 65,400
455 455
2,741 2,741
670 670
1998 1998
28,861.44 28,861.44
5.23% 5.23%
2.1% 2.1%
68,400 68,400
477 477
2,875 2,875
700 700
1999 1999
30,469.84 30,469.84
5.57% 5.57%
1.3% 1.3%
72,600 72,600
505 505
3,043 3,043
740 740
2000 2000
32,154.82 32,154.82
5.53% 5.53%
2.5% 2.5%
76,200 76,200
531 531
3,202 3,202
780 780
2001 2001
32,921.92 32,921.92
2.39% 2.39%
3.5% 3.5%
80,400 80,400
561 561
3,381 3,381
830 830
2002 2002
33,252.09 33,252.09
1.00% 1.00%
2.6% 2.6%
84,900 84,900
592 592
3,567 3,567
870 870
2003 2003
34,064.95 34,064.95
2.44% 2.44%
1.4% 1.4%
87,000 87,000
606 606
3,653 3,653
890 890
2004 2004
35,648.55 35,648.55
4.65% 4.65%
2.1% 2.1%
87,900 87,900
612 612
3,689 3,689
900 900
2005 2005
36,952.94 36,952.94
3.66% 3.66%
2.7% 2.7%
90,000 90,000
627 627
3,779 3,779
920 920
2006 2006
38,651.41 38,651.41
4.60% 4.60%
4.1% 4.1%
94,200 94,200
656 656
3,955 3,955
970 970
2007 2007
40,405.48 40,405.48
4.54% 4.54%
3.3% 3.3%
97,500 97,500
680 680
4,100 4,100
1,000 1,000
2008 2008
41,334.97 41,334.97
2.30% 2.30%
2.3% 2.3%
102,000 102,000
711 711
4,288 4,288
1,050 1,050
2009 2009
40,711.61 40,711.61
-1.51% -1.51%
5.8% 5.8%
106,800 106,800
744 744
4,483 4,483
1,090 1,090
2010 2010
41,673.83 41,673.83
2.36% 2.36%
0.0% 0.0%
106,800 106,800
761 761
4,586 4,586
1,120 1,120
2011 2011
42,979.61 42,979.61
3.13% 3.13%
0.0% 0.0%
106,800 106,800
749 749
4,517 4,517
1,120 1,120
2012 2012
44,321.67 44,321.67
3.12% 3.12%
3.6% 3.6%
110,100 110,100
767 767
4,624 4,624
1,130 1,130
2013 2013
44,888.16 44,888.16
1.28% 1.28%
1.7% 1.7%
113,700 113,700
791 791
4,768 4,768
1,160 1,160
2014 2014
46,481.52 46,481.52
3.55% 3.55%
1.5% 1.5%
117,000 117,000
816 816
4,917 4,917
1,200 1,200
Congressional Research Service Congressional Research Service
2021

link to page link to page 2526 link to page link to page 2526 link to page link to page 2526 link to page link to page 2526 Social Security: Benefit Calculation

Contribution
First Primary
Amount
Average
Annual
Cost-of-
and Benefit Insurance Second
Needed to to Year
Wage
~~Living~~
~~and Benefit~~
~~Insurance~~Change Living Base Amount
PIA
Earn One
~~Year~~
Index
~~Change~~(AWI)
Adjustment
~~Base~~
~~Amount~~(Taxable (PIA) Bend
Bend
Quarter of
(AWI)
(~~AWI)~~
(COLA)a
~~(Taxable~~
~~(PIA) Bend~~
Maximum) Point Pointb
Coverage
~~Maximum)~~
~~Poin~~tbb
(Credit)c
2015 2015
48,098.63 48,098.63
3.48% 3.48%
1.7% 1.7%
118,500 118,500
826 826
4,980 4,980
1,220 1,220
2016 2016
48,642.15 48,642.15
1.13% 1.13%
0.0% 0.0%
118,500 118,500
856 856
5,157 5,157
1,260 1,260
2017 2017
50,321.89 50,321.89
3.45% 3.45%
0.3% 0.3%
127,200 127,200
885 885
5,336 5,336
1,300 1,300
2018 2018
52,145.80 52,145.80
3.62% 3.62%
2.0% 2.0%
128,400 128,400
895 895
5,397 5,397
1,320 1,320
2019 2019
54,099.99 54,099.99
3.75% 3.75%
2.8% 2.8%
132,900 132,900
926 926
5,583 5,583
1,360 1,360
2020 2020
—
—55,628.60 2.83%
1.6% 1.6%
137,700 137,700
960 960
5,785 5,785
1,410 1,410
2021 2021
— —
— —
1.3% 1.3%
142,800 142,800
996 996
6,002 6,002
1,470 1,470 2022 5.9% 147,000 1,024 6,172 1,510
Source: CRS. CRS.
Notes: Dashes indicate data not available. Dashes indicate data not available.
a. Automatic COLAsa. Automatic COLAs became effective in 1975 as part of P.L.became effective in 1975 as part of P.L. 92-336. Prior to this, each COLA92-336. Prior to this, each COLA was approved was approved
through legislation. through legislation. For more information,For more information, see CRS Report 94-803, see CRS Report 94-803, Social Security: Cost-of-Living Adjustments. .
b. Prior to 1978, the Social Security benefit amounts were calculated using a process b. Prior to 1978, the Social Security benefit amounts were calculated using a process that coupled wage and that coupled wage and
price inflation. P.L. 95-216 decoupled price and wage inflation in benefit calculations and instituted the price inflation. P.L. 95-216 decoupled price and wage inflation in benefit calculations and instituted the
current-law benefit formula. current-law benefit formula.
c. Prior to 1978, a worker c. Prior to 1978, a worker earned a quarter of coverage for each quarter in which he or she earned $50 in earned a quarter of coverage for each quarter in which he or she earned $50 in
covered employment. covered employment. P.L.P.L. 95-216 stipulated that a quarter of coverage for 1978 would be $250, and that 95-216 stipulated that a quarter of coverage for 1978 would be $250, and that
amount would be indexed amount would be indexed ~~annual y~~annually to the average wage index. to the average wage index.
Table B-2. Social Security Benefit Amounts, Full Retirement Age (FRA), and Delayed
Retirement Credits (DRCs) by Birth Year
As a Percentage of Primary Insurance Amount (PIA) at Ages 62-70 As a Percentage of Primary Insurance Amount (PIA) at Ages 62-70
Year of
Birth/Age
FRA
DRC
62
63
64
65
66
67
68
69
70
62
1924/1986 1924/1986
65 65
3 3
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
103 103
106 106
109 109
112 112
115 115
1925- 1925-
1926/1987- 1926/1987-
65 65
3 1⁄2 3 1⁄2
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
103 1⁄2 103 1⁄2
107 107
107 1⁄2 107 1⁄2
114 114
117 1⁄2 117 1⁄2
1988 1988
1927- 1927-
1928/1989- 1928/1989-
65 65
4 4
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
104 104
108 108
112 112
116 116
120 120
1990 1990
1929- 1929-
1930/1991- 1930/1991-
65 65
4 1⁄2 4 1⁄2
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
104 1⁄2 104 1⁄2
109 109
113 1⁄2 113 1⁄2
118 118
122 1⁄2 122 1⁄2
1992 1992
1931- 1931-
1932/1993- 1932/1993-
65 65
5 5
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
105 105
110 110
115 115
120 120
125 125
1994 1994
1933- 1933-
1934/1995- 1934/1995-
65 65
5 1⁄2 5 1⁄2
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
105 1⁄2 105 1⁄2
111 111
116 1⁄2 116 1⁄2
122 122
127 1⁄2 127 1⁄2
1996 1996
Congressional Research Service Congressional Research Service
2122

Social Security: Benefit Calculation

Year of
Birth/Age
FRA
DRC
62
63
64
65
66
67
68
69
70
62
1935- 1935-
1936/1997- 1936/1997-
65 65
6 6
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
106 106
112 112
118 118
124 124
130 130
1998 1998
1937/1999 1937/1999
65 65
6 1⁄2 6 1⁄2
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
106 1⁄2 106 1⁄2
113 113
119 1⁄2 119 1⁄2
126 126
132 1⁄2 132 1⁄2
65, 2 65, 2
111 11⁄ 111 11⁄
124 11⁄ 124 11⁄
131 5⁄ 131 5⁄
1938/2000 1938/2000
1 1
1 1
1 1
mo. mo.
6 1⁄2 6 1⁄2
79 1⁄6 85 5⁄9 92 2⁄9 98 8⁄9 79 1⁄6 85 5⁄9 92 2⁄9 98 8⁄9
105 5⁄12 105 5⁄12
2 2
118 5⁄12 118 5⁄12
2 2
2 2
65, 4 65, 4
1939/2001 1939/2001
mo. mo.
7 7
78 1⁄3 84 4⁄9 91 1⁄9 97 7⁄9 78 1⁄3 84 4⁄9 91 1⁄9 97 7⁄9
104 2⁄3 104 2⁄3
111 2⁄3 111 2⁄3
118 2⁄3 118 2⁄3
125 2⁄3 125 2⁄3
132 2⁄3 132 2⁄3
65, 6 65, 6
1940/2002 1940/2002
mo. mo.
7 7
77 1⁄2 83 1⁄3 77 1⁄2 83 1⁄3
90 90
96 2⁄3 96 2⁄3
103 1⁄2 103 1⁄2
110 1⁄2 110 1⁄2
117 1⁄2 117 1⁄2
124 1⁄2 124 1⁄2
131 1⁄2 131 1⁄2
65, 8 65, 8
1941/2003 1941/2003
mo. mo.
7 1⁄2 7 1⁄2
76 2⁄3 82 2⁄9 88 8⁄9 95 5⁄9 76 2⁄3 82 2⁄9 88 8⁄9 95 5⁄9
102 1⁄2 102 1⁄2
110 110
117 1⁄2 117 1⁄2
125 125
132 1⁄2 132 1⁄2
~~1942/2004~~
65, 10 65, 10
~~7 1⁄~~
1942/2004 mo. mo.
7 1⁄2 2
75 5⁄6 81 1⁄9 87 7⁄9 94 4⁄9 75 5⁄6 81 1⁄9 87 7⁄9 94 4⁄9
101 1⁄4 101 1⁄4
108 3⁄4 108 3⁄4
116 1⁄4 116 1⁄4
123 3⁄4 123 3⁄4
131 1⁄4 131 1⁄4
1943- 1943-
1954/2005- 1954/2005-
66 66
8 8
75 75
80 80
86 2⁄3 93 1⁄3 86 2⁄3 93 1⁄3
100 100
108 108
116 116
124 124
132 132
2016 2016 1955/2017
66, 2 66, 2
~~1955/2017~~
8 74 1⁄ mo. mo.
8
~~74 1⁄6~~ 6 79 1⁄6 85 5⁄9 92 2⁄9 79 1⁄6 85 5⁄9 92 2⁄9
98 8⁄9 98 8⁄9
106 2⁄3 106 2⁄3
114 2⁄3 114 2⁄3
122 2⁄3 122 2⁄3
130 2⁄3 130 2⁄3
1956/2018 1956/2018
66, 4 66, 4
8 8
73 1⁄ 73 1⁄
mo. mo.
3 3
78 1⁄3 84 4⁄9 91 1⁄9 78 1⁄3 84 4⁄9 91 1⁄9
97 7⁄9 97 7⁄9
105 1⁄3 105 1⁄3
113 1⁄3 113 1⁄3
121 1⁄3 121 1⁄3
129 1⁄3 129 1⁄3
1957/2019 66, 6 8 72 1⁄ mo. 2 ~~66, 6~~
~~1957/2019~~
~~mo.~~
8
~~72 1⁄2~~ 77 1⁄2 83 1⁄3 77 1⁄2 83 1⁄3
90 90
96 2⁄3 96 2⁄3
104 104
112 112
120 120
128 128
1958/2020 1958/2020
66, 8 66, 8
8 8
71 2⁄ 71 2⁄
mo. mo.
3 3
76 2⁄3 82 2⁄9 88 8⁄9 76 2⁄3 82 2⁄9 88 8⁄9
95 5⁄9 95 5⁄9
102 2⁄3 102 2⁄3
110 2⁄3 110 2⁄3
118 2⁄3 118 2⁄3
126 2⁄3 126 2⁄3
~~66, 10~~
1959/2021 1959/2021
~~mo.~~66, 10
8 8
70 5⁄ 70 5⁄6 mo. 6 75 5⁄6 81 1⁄9 87 7⁄9 75 5⁄6 81 1⁄9 87 7⁄9
94 4⁄9 94 4⁄9
101 1⁄3 101 1⁄3
109 1⁄3 109 1⁄3
117 1⁄3 117 1⁄3
125 1⁄3 125 1⁄3
1960 and 1960 and
later/2022 later/2022
67 67
8 8
70 70
75 75
80 80
86 2⁄3 86 2⁄3
93 1⁄3 93 1⁄3
100 100
116 116
124 124
124 124
or later or later
Source: CRS. CRS.
Notes: If benefits are claimed If benefits are claimed before reaching FRA (i.e.,before reaching FRA (i.e., ~~early~~ early retirement),retirement), the PIA is reduced five-ninths of 1the PIA is reduced five-ninths of 1%
~~percent~~ for each month before FRA, up to 36 months. If the number of months is greater than 36, then the PIA for each month before FRA, up to 36 months. If the number of months is greater than 36, then the PIA
is further reduced five-twelfths of 1is further reduced five-twelfths of 1 ~~percent~~% for each month. The DRC is two-thirds of 1 for each month. The DRC is two-thirds of 1 ~~percent~~% per month for per month for
persons born in 1943 or later. DRCs cannot be earned after attaining age 70. persons born in 1943 or later. DRCs cannot be earned after attaining age 70.
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link to page link to page 2829 link to page link to page 2829 Social Security: Benefit Calculation

Appendix C. Auxiliary Benefits
Table C-1. Social Security Benefits for the Worker’s Family Members
Basic Benefit Amount
Basis for
Before Any Applicable
Entitlement
Basic Eligibility Requirements
Adjustments
Spouse
At least age 62, or At least age 62, or
50% of worker’s 50% of worker’s PIA PIA
Any age if caring for the child of a retired Any age if caring for the child of a retired or or
disabled worker.disabled worker. The child must be under the age The child must be under the age
of 16 or disabled, and the child must be entitled to of 16 or disabled, and the child must be entitled to
benefits. benefits.
Divorced Spouse
At least age 62. At least age 62.
50% of worker’s 50% of worker’s PIA PIA
(The divorced individual Must be unmarried. (The divorced individual Must be unmarried.
must have been must have been
Note: A divorced spouse who is under the age of Note: A divorced spouse who is under the age of
married married to the worker to the worker
62 is not eligible 62 is not eligible for spousal benefits even if he or for spousal benefits even if he or
for at least 10 years for at least 10 years
she is caring for the child of a retired she is caring for the child of a retired or disabled or disabled
before the divorce before the divorce
worker. worker.
became final.) became final.)
Aged Widow(er)
At least age 60. At least age 60.
100% of worker’s 100% of worker’s PIPIAa
and
Must be unmarried (unless the marriage occurred Must be unmarried (unless the marriage occurred
Divorced Aged
after attainment of age 60). after attainment of age 60).
Widow(er)
(The divorced individual (The divorced individual
must have been must have been
marriedmarried to the worker to the worker
for at least 10 years for at least 10 years
before the divorce before the divorce
became final.) became final.)
Disabled Widow(er)
At least age 50 (ages 50-59). At least age 50 (ages 50-59).
71.5% of worker’s 71.5% of worker’s PIPIAa
and
Must be unmarried (unless the marriage occurred Must be unmarried (unless the marriage occurred
Disabled widow(er)s Disabled widow(er)s and and
Divorced Disabled
after attainment of age 50). after attainment of age 50).
divorced disabled divorced disabled
Widow(er)
The qualifying disability must have occurred: The qualifying disability must have occurred:
widow(er)s ages 50-59 widow(er)s ages 50-59
(The divorced individual (The divorced individual
receive receive the same rate of the same rate of
(1) before or within seven years of the worker’s (1) before or within seven years of the worker’s
must have been must have been
reduction set for reduction set for
death; death;
married married to the worker to the worker
widow(er)s at age 60 widow(er)s at age 60
for at least 10 years for at least 10 years
(2) within seven years of having been previously (2) within seven years of having been previously
(28.5% of the worker’s (28.5% of the worker’s
before the divorce before the divorce
entitled to benefits on the worker’s entitled to benefits on the worker’s record as a record as a
PIA) regardless PIA) regardless of their age of their age
became final.) became final.)
widow(er) with a child in his or her care; or widow(er) with a child in his or her care; or
at the time of entitlement at the time of entitlement
(3) within seven years of having been previously (3) within seven years of having been previously
entitled to benefits as a disabled widow(er) that entitled to benefits as a disabled widow(er) that
ended because the qualifying disability ended ended because the qualifying disability ended
(whichever is later). (whichever is later).
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Basic Benefit Amount
Basis for
Before Any Applicable
Entitlement
Basic Eligibility Requirements
Adjustments
Widowed Mother or
Surviving spouse of any age who is caring for the Surviving spouse of any age who is caring for the
75% of deceased worker’s 75% of deceased worker’s
Father
deceased worker’s deceased worker’s child. The child must be under child. The child must be under
PIA PIA
(Young Widow(er)
the age of 16 or disabled, and the child must be the age of 16 or disabled, and the child must be
with Child)
entitled to benefits. entitled to benefits.
Must be unmarried. Must be unmarried.
Must not be entitled to widow(er)’sMust not be entitled to widow(er)’s benefits. benefits.
Note: In the case of a surviving divorced parent, the Note: In the case of a surviving divorced parent, the
child must be his or her natural or child must be his or her natural or ~~legal y~~ legally adopted adopted
child. The 10-year marriagechild. The 10-year marriage ~~requirement~~ requirement that that
applies to divorced spouses under other applies to divorced spouses under other
circumstances does not apply. circumstances does not apply.
Child
A dependent, unmarried A dependent, unmarried child of a retired,child of a retired, disabled, disabled,
50% of worker’s 50% of worker’s PIA for PIA for
or deceased worker. or deceased worker.
child of a retired child of a retired or or
The child must be: The child must be:
disabled worker disabled worker
(1) under the age of 18, (1) under the age of 18,
75% of deceased worker’s 75% of deceased worker’s
PIA for child of a deceased PIA for child of a deceased
(2) a ful -time elementary (2) a ful -time elementary or secondary student or secondary student
worker worker
under the age of 19, or under the age of 19, or
(3) a disabled person aged 18 or older(3) a disabled person aged 18 or older whose whose
disability began before age 22. disability began before age 22.
The term The term child ~~refers~~ refers to a biological child, adopted to a biological child, adopted
child, stepchild, or, in somechild, stepchild, or, in some cases, grandchild of the cases, grandchild of the
worker. worker.
Dependent Parent
At least age 62. At least age 62.
82.5% of deceased 82.5% of deceased
of a Deceased
Must not have married Must not have married since the worker’ssince the worker’s death. death.
worker’s worker’s PIA if one parent PIA if one parent
Worker
is entitled to benefits is entitled to benefits
Must have been receiving at least one-half of his or Must have been receiving at least one-half of his or
her support fromher support from the workerthe worker at the timeat the time of the of the
75% of deceased worker’s 75% of deceased worker’s
worker’s worker’s death (or, if the workerdeath (or, if the worker had a period of had a period of
PIA (for each parent) if two PIA (for each parent) if two
disability that continued until death, at the beginning parents are entitled to disability that continued until death, at the beginning parents are entitled to
of the period of disability). of the period of disability).
benefits benefits
Source: CRS. For moreCRS. For more information on auxiliary benefits, seeinformation on auxiliary benefits, see CRS Report R41479, CRS Report R41479, Social Security: Revisiting
Benefits for Spouses and Survivors. .
Notes: The family relationship requirementThe family relationship requirement for entitlement to benefits based on the worker’sfor entitlement to benefits based on the worker’s record may be record may be
met in alternative ways. For example, the relationshipmet in alternative ways. For example, the relationship ~~requirement~~ requirement can be met if, under state law as interpreted can be met if, under state law as interpreted
by the courts of the state, the applicant would be able to inherit a share of the worker’sby the courts of the state, the applicant would be able to inherit a share of the worker’s personal property if the personal property if the
workerworker ~~were~~ were to die without leaving a wil .to die without leaving a wil . The table shows the minimumThe table shows the minimum ~~eligibility~~ eligibility age for each type of benefit age for each type of benefit
(i.e.,(i.e., the age at which benefits are first payable on a reduced basis). The maximum family benefit may apply, the age at which benefits are first payable on a reduced basis). The maximum family benefit may apply,
reducing the benefit payable to each family memberreducing the benefit payable to each family member (excluding the worker)(excluding the worker) on a proportional basis.on a proportional basis. In the case In the case
of a retiredof a retired or deceased worker,or deceased worker, the maximumthe maximum family benefit variesfamily benefit varies from 150% to 188% of the worker’sfrom 150% to 188% of the worker’s PIA. In PIA. In
the case of a disabled worker,the case of a disabled worker, the maximum familythe maximum family benefit is equal to the lesserbenefit is equal to the lesser of 85% of the worker’sof 85% of the worker’s AIME or AIME or
150% of the worker’s150% of the worker’s PIA but no less than 100% of the worker’sPIA but no less than 100% of the worker’s PIA. Other benefit adjustments may apply. PIA. Other benefit adjustments may apply.
a. A worker’sa. A worker’s claiming age affects the widow(er) benefit. If a workerclaiming age affects the widow(er) benefit. If a worker was receivingwas receiving a reduced benefit due to a reduced benefit due to
claiming benefits claiming benefits before the ful retirement the ful retirement age, the widow(er) benefit cannot exceed the worker’sage, the widow(er) benefit cannot exceed the worker’s reduced reduced
benefit amount. Alternatively,benefit amount. Alternatively, if a workerif a worker was entitled (or would have been entitled) to a higher benefit due was entitled (or would have been entitled) to a higher benefit due
to claiming benefits to claiming benefits after the ful retirement the ful retirement age, the worker’sage, the worker’s PIA—adjusted to take into account the PIA—adjusted to take into account the
delayed retirementdelayed retirement credit—iscredit—is used to compute the widow(er) benefit, thereby increasing the benefit. used to compute the widow(er) benefit, thereby increasing the benefit.

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Social Security: Benefit Calculation

Author Information

Barry F. Huston Barry F. Huston

Analyst in Social Policy Analyst in Social Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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than public understanding of information that has been provided by CRS to Members of Congress in than public understanding of information that has been provided by CRS to Members of Congress in
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