Social Security: Benefit Calculation

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Social Security: Benefit Calculation
November November ~~24, 2021~~17, 2022
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 Analyst in Social Policy 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 ~~October 2021~~September 2022, there were approximately 65., there were approximately 65.28 million Social Security beneficiaries collecting an average monthly benefit million Social Security beneficiaries collecting an average monthly benefit
of $1,of $1,~~442~~548. Retired-worker and disabled-worker beneficiaries accounted for . Retired-worker and disabled-worker beneficiaries accounted for ~~84.5~~85.1% 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 (~~72.3~~73.4%), with an average monthly benefit of $1,%), with an average monthly benefit of $1,~~563~~674. The second-largest . The second-largest
category was disabled workers (category was disabled workers (~~12.2~~11.7%), with an average monthly benefit of $1,%), with an average monthly benefit of $1,~~282~~363. 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 (~~15.5~~14.9%). The Social Security Administration’s %). The Social Security Administration’s
Office of the Chief Actuary estimates that about 94% of workersOffice of the Chief Actuary estimates that about 94% of workers ~~(176~~, about 182 million million), are covered under the OASDI programs. 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, or death. These programs are family members against loss of income due to old age, disability, 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 ~~2034~~2035.2 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
illustrate the benefit formula, this report makes use of illustrate 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 (SSA’s) Average Wage Index (AWI).3 Hypothetical workers are assumed to work continuously from age 21 through 61 (i.e., 40 years of covered employment). Throughout this report, examples of benefit calculations Throughout this report, examples of benefit calculations
are shown for very low, low, medium, and high lifetime hypothetical earners as well as are shown for very low, low, medium, and high lifetime hypothetical earners as well 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 illustrates how indexed parameters that change year to year affect In addition, this technique illustrates how indexed parameters that change year to year affect
benefit amountbenefit amounts. Appendix A provides more details, including provides more details, including ~~distributional information, on~~
~~wages of hypothetical earners born in 1952. This year is chosen simply because it is the youngest~~

1 Research suggests that Social Security benefits accounted for most of the decline in poverty from 1967 through 2000. 1 Research suggests that Social Security benefits accounted for most of the decline in poverty from 1967 through 2000.
For more information, see CRS Report R45791, For more information, see CRS Report R45791, Poverty Among the Population Aged 65 and Older. .
2 Social Security Administration (SSA), Office of the Chief Actuary 2 Social Security Administration (SSA), Office of the Chief Actuary (OCACT), The 2022 Annual, ~~The 2021Annual~~ Report of the Board of Trustees
of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, , ~~August 31, 2021,~~
June 2, 2022, https://www.ssa.gov/OACT/TR/https://www.ssa.gov/OACT/TR/~~2021/tr2021~~2022/tr2022.pdf (hereinafter cited as “.pdf (hereinafter cited as “~~2021~~2022 Annual Report”). Under current law, the Annual Report”). Under current law, the
OASI and DI trust funds are distinct entities and cannot borrow from each other when faced with a funding shortfall. OASI and DI trust funds are distinct entities and cannot borrow from each other when faced with a funding shortfall.
The shifting of funds between OASI and DI can be done only with authorization from Congress. In the past, Congress The shifting of funds between OASI and DI can be done only with authorization from Congress. In the past, Congress
has authorized temporary interfund borrowing among the OASI, DI, and Medicare Hospital Insurance trust funds, as has authorized temporary interfund borrowing among the OASI, DI, and Medicare Hospital Insurance trust funds, as
well as temporary payroll tax reallocations between OASI and DI, to deal with funding shortfalls. Most recently, under well as temporary payroll tax reallocations between OASI and DI, to deal with funding shortfalls. Most recently, under
the Bipartisan Budget Act of 2015 (P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from the Bipartisan Budget Act of 2015 (P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from
the OASI fund to the DI fund for calendar years 2016-2018. Because of such actions, the OASI and DI trust funds are the OASI fund to the DI fund for calendar years 2016-2018. Because of such actions, the OASI and DI trust funds are
discussed on a combined basis. Separately, the OASI fund is projected to have asset reserves until discussed on a combined basis. Separately, the OASI fund is projected to have asset reserves until ~~2033~~2034, at which point , at which point
continuing income to the fund would be sufficient to pay continuing income to the fund would be sufficient to pay 7677% of OASI scheduled benefits. The DI fund is projected to % of OASI scheduled benefits. The DI fund is projected to
~~have asset reserves until 2057, at which point continuing income would be sufficient to pay 91% of DI scheduled~~
~~benefits (2021~~have asset reserves throughout the 75-year projection period (2022 Annual Report, p. 6 Annual Report, p. 6.)). The The ~~2021~~ 2022 intermediate assumptions reflect the trustees’ understanding of the status intermediate assumptions reflect the trustees’ understanding of the status
of the Social Security trust funds at the start of of the Social Security trust funds at the start of ~~2021. Unlike~~2022. Like the previous year’s report, the the previous year’s report, the ~~2021~~2022 estimates estimates do include include
potential effects of Coronavirus Disease 2019 (COVID-19). Although the report includes impacts from COVID-19, the potential effects of Coronavirus Disease 2019 (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 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. term, are subject to a high level of uncertainty.
3 SSA, 3 SSA, ~~Office of the Chief Actuary (OCACT),~~ OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2021~~
2022 Trustees Report Assumptions~~, August 2021~~, June 2022, at https://www.ssa.gov/OACT/NOTES/ran3/ at https://www.ssa.gov/OACT/NOTES/ran3/~~an2021~~an2022-3.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 (~~2021~~2022 Annual Report, p. Annual Report, p. ~~156~~154). The contribution and benefit base for ). The contribution and benefit base for ~~2022~~2023 is is
$$~~147,000~~160,200 (see SSA, (see SSA, ~~2022~~2023 Social Security Changes, https://www.ssa.gov/news/press/factsheets/, https://www.ssa.gov/news/press/factsheets/~~colafacts2022~~colafacts2023.pdf). .pdf).
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distributional information, on wages of hypothetical earners born in 1953. This year is chosen simply because it is the youngest cohort of workers and beneficiaries for which complete information on indexed earnings and cohort of workers and beneficiaries for which complete information on indexed earnings and
program-specific factors are known. 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 Generally speaking, about 94% of workers .5 Generally speaking, about 94% 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 annually with growth in average earnings in the national economy as for a QC increases annually with growth in average earnings in the national economy as
measured by the AWI (seemeasured by the AWI (see Table B-1).7 In .7 In ~~2022~~2023, a worker will earn one credit or QC for every , a worker will earn one credit or QC for every
$1,$1,~~510~~640 of earnings, up to four per year. Therefore, a worker earning $6, of earnings, up to four per year. Therefore, a worker earning $6,~~040~~560 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 eligible for most benefits, workers must be To be eligible 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 eligible for Social Security retirement year before the worker becomes disabled. A worker is first eligible for Social Security retirement
benefits at 62, so to be eligible for retirement benefits, a worker must generally have worked for benefits at 62, so to be eligible for retirement benefits, a worker must generally have worked for
10 years. Workers are 10 years. Workers are permanently insured when they are fully insured and will not lose fully when they are fully insured and will 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 survivors of a worker who was fully insured at the time of death.8 Benefits may be paid to eligible survivors of a worker who was fully insured at the time of death.8
Some dependents are also eligible for survivors benefits if the deceased worker was Some dependents are also eligible 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 for disability benefits, workers must also satisfy a recency of work requirement. To be eligible 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 allow workers who divide their careers between the United States and certain allow workers who divide their careers between the United States and certain

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 employment Covered employment is employment
for which earnings are creditable for Social Security purposes (for which earnings are creditable for Social Security purposes (~~2021~~2022 Annual Report, p. 243). The roughly 6% of Annual Report, p. 243). The roughly 6% of
workers who are not covered by Social Security are state and local government workers, certain workers employed by workers who are not covered by Social Security are state and local government workers, certain workers employed by
religious groups, and certain noncitizen workers. religious groups, and certain noncitizen workers.
6 OCACT, “Social Security Program Fact Sheet,” June 6 OCACT, “Social Security Program Fact Sheet,” June ~~2021~~2022, https://www.ssa.gov/oact/FACTS/index.html. , https://www.ssa.gov/oact/FACTS/index.html.
7 The AWI is the average of all workers’ wages subject to federal income taxes and contributions to deferred 7 The AWI is the average of all workers’ wages subject to federal income taxes and contributions to deferred
compensation plans. It is calculated using some wages that are not subject to the Social Security payroll tax.compensation plans. It is calculated using some wages that are not subject to the Social Security payroll tax.
For more information on AWI, see CRS In Focus IF11931, Social Security: The Average Wage Index. 8 For more information on survivors benefits, see CRS Report RS22294, 8 For more information on survivors benefits, see CRS Report RS22294, Social Security Survivors Benefits. .
9 To be eligible for disability benefits, workers must also be found unable to engage in substantial gainful activity. See 9 To be eligible for disability benefits, workers must also be found unable to engage in substantial gainful activity. See
CRS Report R44948, CRS Report R44948, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility,
Benefits, and Financing. .
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Social Security: Benefit Calculation

countries to fill gaps in Social Security coverage by combining work credits under each country’s 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 system to qualify for benefits under one or both systems.10
Amount Needed to Earn Credits
As discussed, in As discussed, in ~~2022~~2023, a worker will earn one QC for each $1,, a worker will earn one QC for each $1,~~510~~640 of covered earnings.11 of covered earnings.11
Therefore, a worker earning $6,Therefore, a worker earning $6,~~040~~560 in covered employment at any point in the calendar year 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 would be credited with the maximum number (i.e., four) of QCs for that year. Alternatively, if a
worker earned $4,worker earned $4,~~530~~920 in covered employment in in covered employment in ~~2022~~2023, he or she would be credited with three , he or she would be credited with three
QCs for that year ($4,QCs for that year ($4,~~530~~920 divided by $1, divided by $1,~~510~~650 equals three). ).
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 will years in which a cost-of-living adjustment (COLA) is payable. The taxable maximum will
increase from $increase from $~~142,800 in 2021 to $147,000 in 2022~~147,000 in 2022 to $160,200 in 2023. This level of earnings is both the . This level of earnings is both the
contribution base (i.e., amount of covered earnings subject to the Social Security payroll tax) and 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 used to determine benefits). Earnings in excess the benefit base (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 of the taxable maximum are not subject to the Social Security payroll tax and are not factored into
benefit calculations. benefit 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 overall economy-wide earnings. That is done updates past earnings to account for the growth in overall 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
eligibility for benefits, which for retired workers is at age 60. (Workers are first eligible for eligibility 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.

10 See CRS Report RL32004, 10 See CRS Report RL32004, Social Security Benefits for Noncitizens. .
11 Since 1978, the amount needed to earn a QC has been indexed to changes in the AWI. See OCACT, “Quarter of 11 Since 1978, the amount needed to earn a QC has been indexed to changes in the AWI. See OCACT, “Quarter of
Coverage,” https://www.ssa.gov/OACT/COLA/QC.html. Under current law, the amount needed to earn a QC cannot Coverage,” https://www.ssa.gov/OACT/COLA/QC.html. Under current law, the amount needed to earn a QC cannot
decrease. That is, the amount required is the higher of (1) the amount in effect for the calendar year a determination is decrease. That is, the amount required 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. §413(a)). made or (2) the product of that calendar year’s amount and the change in the AWI (42 U.S.C. §413(a)).
12 SSA uses the national average wage indexing series to ensure that future benefits reflect the general rise in the 12 SSA uses the national average wage indexing 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, see “Index earnings used to compute initial standard of living over the course of a worker’s earning history. For details, see “Index earnings used to compute initial
benefits” in OCACT, “National Average Wage Index,” https://www.ssa.gov/oact/COLA/AWI.html. benefits” in OCACT, “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 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 divided by 12 (to change the benefit from an annual to a monthly measure). Those years of
earnings are known as earnings are known as computation years. If the person worked fewer than 35 years in . 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
generally reduced below 35 by the number of years until he or she would have reached 62. For generally 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.13 those aged 62 or older.13
AIME for Hypothetical Workers Born in ~~1952~~1953
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
~~1952~~1953 birth cohort. (Nominal annual earnings for this cohort are shown birth cohort. (Nominal annual earnings for this cohort are shown inin Table A-2, and wage- and wage-
indexed earnings for this cohort are shown indexed earnings for this cohort are shown inin Table A-3.) These workers, born in These workers, born in ~~1952~~1953, are , are
assumed to have entered the labor force in assumed to have entered the labor force in ~~1973~~1974 (i.e., age 21) and worked continually until (i.e., age 21) and worked continually until ~~2014~~2015
(i.e., age 62). As discussed and shown (i.e., age 62). As discussed and shown inin Table A-3, ~~annual~~annual earnings until age 60 are wage- 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 ~~1952~~1953, 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
$ $~~386,516.41~~
~~$695,712.04~~
~~$1,545,756.54~~
~~$2,473,343.43~~
~~$3,734,047.63~~391,406.63 $704,280.24 $1,565,493.44 $2,504,787.60 $3,807,774.57
Earnings Earnings
AIME AIME
~~920~~931.00 .00
1, 1,~~656~~676.00 .00
3, 3,~~680~~727.00 .00
5, 5,~~888~~963.00 .00
~~8,890~~9,066.00 .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~~dollar (see 20 C.F.R. §404.211). (see 20 C.F.R. §404.211).

13 The number of computation years equals the number of “elapsed years” minus any “dropout years.” The number of 13 The number of computation years equals the number of “elapsed years” minus any “dropout years.” The number of
elapsed years equals the calendar years after an individual turns 21 years old through the year before the individual first elapsed years equals the calendar years after an individual turns 21 years old through the year before the individual first
becomes eligible for disability benefits with a minimum of two. For every five elapsed years, there is one disability becomes eligible for disability benefits with a minimum of two. For every five elapsed years, there is one disability
dropout year up to a maximum of five. In addition, people with fewer than three disability dropout years may be dropout year up to a maximum of five. In addition, people with fewer than three disability dropout years may be
credited with up to two additional dropout years based on the care of a child for up to a total of three dropout years. See credited with up to two additional dropout years based on the care of a child for up to a total of three dropout years. See
CRS Report R43370, CRS Report R43370, Social Security Disability Insurance (SSDI): Becoming Insured, Calculating Benefit 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 The next step in determining a benefit is to compute the primary insurance amount (PIA) by (PIA) by
applying a benefit formula to the AIME. applying a benefit formula to the AIME.
First, the AIME is sectioned into three brackets (or segments) of earnings First, the AIME is sectioned into three brackets (or segments) of earnings~~, which are divided by~~
by two dollar amounts known as bend points. In dollar amounts known as bend points. In ~~2022~~2023, the bend points will be $1,, the bend points will be $1,~~024~~115 and $6, and $6,~~172~~721.14 .14
Those amounts are indexed to the AWI, so they generally increase each year.15 Those amounts are indexed to the AWI, so they generally increase each year.15
Three factors— Three factors—~~which are~~ fixed by law at 90%, 32%, and 15%—are applied to the three brackets fixed by law at 90%, 32%, and 15%—are applied to the three brackets
of AIME to allow for a progressive benefit formula.of AIME to allow for a progressive benefit formula. For workers with AIMEs of $1,For workers with AIMEs of $1,~~024~~115 or less in or less in
~~2022~~2023, the PIA is 90% of the AIME. Because the other two factors are lower, the share of earnings , the PIA is 90% of the AIME. Because the other two factors are lower, the share of earnings
that is replaced by the Social Security benefit declines as AIMEs increase. For workers who that is replaced by the Social Security benefit declines as AIMEs increase. For workers who
become eligible for retirement benefits, become disabled, or die in become eligible for retirement benefits, become disabled, or die in ~~2022~~2023, the PIA is determined as , the PIA is determined as
shown in the examples inshown in the examples in Table 2. Benefits are based on covered earnings. Earnings up to the Benefits are based on covered earnings. Earnings up to the
maximum taxable amount ($maximum taxable amount ($~~147,000 in 2022~~160,200 in 2023) 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 2022,~~ in 2023, 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,~~345~~627.16 .16
PIA for Hypothetical Workers Born in ~~1952~~1953
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 ~~1952~~1953 birth cohort (who reached age 62 in birth cohort (who reached age 62 in ~~2014~~2015). 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. Specifically, the more a . Specifically, 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 ~~1952~~1953 had monthly wage-indexed earnings of about had monthly wage-indexed earnings of about
$1,$1,~~656~~676, resulting in a PIA of $1,, resulting in a PIA of $1,~~003.20~~015.40, 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 $wage-indexed earnings of about $~~8,890~~9,066 and thus a PIA of $2, and thus a PIA of $2,~~642.60~~685.50. 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 considerably less.17 His or her PIA is ~~almost four~~close to three times that of the times that of the ~~very~~ low earner. low earner.

14 The bend points used in the PIA formula are rounded to the nearest dollar (42 U.S.C. §415(a)(1)(B)(iii)). 14 The bend points used in the PIA formula are rounded to the nearest dollar (42 U.S.C. §415(a)(1)(B)(iii)).
15 Bend points are indexed to the AWI and can decrease when AWI decreases (42 U.S.C. §415(a)(1)(B)). 15 Bend points are indexed to the AWI and can decrease when AWI decreases (42 U.S.C. §415(a)(1)(B)). SeeSee Table B-
1 for a list of historical bend point values. For more information on effects of wage indexing and price indexing on for a list of historical bend point values. For more information on effects of wage indexing and price indexing on
benefits, see CRS Report R46819, benefits, see CRS Report R46819, Social Security: The Effects of Wage and Price Indexing on Benefits. .
16 SSA, “ 16 SSA, “~~2022~~2023 Social Security Changes.” Social Security Changes.”
17 For the 17 For the ~~1952~~1953 birth cohort, a hypothetical low earner would have paid a lifetime total of $ birth cohort, a hypothetical low earner would have paid a lifetime total of $~~15,271.54~~28,559.31 in Social Security in Social Security
payroll taxes on total nominal earnings of $payroll taxes on total nominal earnings of $~~251,188.17~~468,574.69, whereas a hypothetical maximum earner would have paid a , whereas a hypothetical maximum earner would have paid a
lifetime total of $lifetime total of $~~148,112.69~~154,842.89 in payroll taxes on total nominal earnings of $2, in payroll taxes on total nominal earnings of $2,~~443,400~~549,600.00. Both workers would have been . Both workers would have been
subject to the same employee payroll tax rate. The hypothetical maximum earner would have received larger benefits subject to the same employee payroll tax rate. The hypothetical maximum earner would have received larger benefits
based on higher earnings subject to the payroll tax. Social Security benefits themselves may also be subject to federal based on higher earnings subject to the payroll tax. Social Security benefits themselves may also be subject to federal
income tax. For more information, see CRS Report RL32552, income tax. For more information, see CRS Report RL32552, Social Security: Taxation of Benefits. .
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Table 2. Computation of Primary Insurance Amounts (PIAs) for Hypothetical
Workers Born in ~~1952~~1953, by Earnings Levels
PIAs for Hypothetical Workers
Three Brackets
of Average
Indexed Very Low
~~High~~
~~Maximum~~
~~Factors~~
~~Indexed~~
~~Low Earner~~
~~Medium~~
~~Monthly~~
Medium High Maximum Factors Monthly Earner Low Earner
Earner
Earner
Earner
Earnings
(AIME) in ~~2014~~2015
AIME of
AIME of
AIME of
AIME of
AIME of
$920.00
$1,656.00
$3,680.00
$5,888.00
$8,890.00
first $ first $~~8161~~826 of of
90% 90%
~~AIME, plus~~
~~$734.40~~
~~$734.40~~
~~$734.40~~
~~$734.90~~
~~$734.90~~
~~AIME over $816~~$743.40 $743.40 $743.40 $743.40 $743.40 AIME, plus AIME over $826
32% 32%
and through and through
33. 33.28
~~268.80~~
~~916.48~~
~~1,312.32~~
~~1,312.32~~
~~$4,917~~60 272.00 928.32 1,329.28 1,329.28 $4,980, plus , plus
15% 15%
AIME over $4, AIME over $4,~~917~~980
0.00 0.00
0.00 0.00
0.00 0.00
~~145.65~~
~~595.95~~147.45 612.90
Total: Worker’s PIA (by (by
law, rounded down to nearest law, rounded down to nearest
~~767.60~~
~~1,003.20~~
~~1,650.80~~
~~2,192.30~~
~~2,642.60~~777.00 1,015.40 1,671.70 2,220.10 2,685.50
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 workers who first become eligible in The bend points shown in the table apply to workers who first become eligible in ~~2014.~~ ~~See~~2015. See Table B-1
for historical values of bend points. Under current law, PIA is rounded down to the nearest dime (42 U.S.C. for historical values of bend points. Under current law, PIA is rounded down to the nearest dime (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 will receive at The PIA calculated in the previous section may not be the benefit amount a worker will 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 called the normal retirement age) is the age at which a worker can (FRA, also called 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 in 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, Office of the Chief Actuary, “Normal Retirement Age,” Social Security Administration, Office of the Chief Actuary, “Normal 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 will receive over their lifetimes so that the total value payments that people who delay claiming will 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
called the called 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 70.20 for 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 (seeclaim (see 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,
all else equal, the overall effect of claiming at different ages depends on how long the beneficiary all else equal, the overall effect of claiming at different ages depends on how long the beneficiary
lives. lives.
Workers with a higher FRA may receive relatively lower benefits for two reasons. First, monthly Workers with a higher FRA may receive relatively lower benefits for two reasons. First, monthly
benefits will be different for individuals who have identical work histories and the same age of benefits will 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 differently, adjustments for early or late benefit claiming are intended to be 19 Said differently, adjustments for early or late benefit claiming are intended to be actuarially equivalent. Under . Under
average life expectancies, early claimants receive smaller benefits but over a longer period of time, whereas late average 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 claimants receive higher benefits for a shorter period of time. Average life expectancies vary across demographic
groups such as age, race, and sex. For more information, see CRS Report R44846, groups such as age, race, and sex. For more information, see CRS Report R44846, The Growing Gap in Life
Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age. .
20 For people born before 1943, the DRC varies from 3.0% to 7.5% depending on the year of birth. See “Delayed 20 For people born before 1943, the DRC varies from 3.0% to 7.5% depending on the year of birth. See “Delayed
Retirement Credit” in OCACT, “Early or Late Retirement?,” http://www.ssa.gov/OACT/quickcalc/early_late.html#late. Retirement Credit” in OCACT, “Early or Late Retirement?,” http://www.ssa.gov/OACT/quickcalc/early_late.html#late.
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age 62 will receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67, age 62 will receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67,
claiming at 62 will result in a monthly benefit that is 70% of the PIA. Depending on the claiming claiming at 62 will 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 will reduce monthly benefits for workers age, the scheduled increase in the FRA from 66 to 67 will reduce monthly benefits for workers
with similar earnings by between 6.1% and 7.7%. Second, lifetime benefits will be different for with similar earnings by between 6.1% and 7.7%. Second, lifetime benefits will 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 will have received monthly benefits for 10 years, compared with the worker with an FRA of 65 will have received monthly benefits for 10 years, compared with the worker
with an FRA of 67, who will have received monthly benefits for eight years. with an FRA of 67, who will 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, which for retired A COLA is applied to the benefit beginning in the second year of eligibility, 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 usually equals the growth in the Consumer Price Index for Urban Wage Earners and COLA usually 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 will receive a COLA of in January of the following year.21 Beneficiaries will receive a COLA of ~~5.9~~8.7% for benefits paid in % for benefits paid in
January January ~~2022~~2023.22 .22
Benefit Amounts for Hypothetical Workers Born in ~~1952~~1953
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 claiming (relative to a worker’s FRA) interact with COLAs to produce the actual early or late claiming (relative to a worker’s FRA) interact with COLAs to produce the actual
benefit amount. These two factors affect all claimants, while other adjustments may affect only benefit amount. These two factors affect all 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. Specificallybefore other adjustments. 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 ~~1952~~1953 (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 reduction for 36 months and a five-twelfths of 1% reduction for 12 five-twelfths of 1% reduction for 12 ~~mont~~hsmonths. 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
~~1952~~1953 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 ~~2015,~~
~~2017, and 2018~~2017, 2018, and 2019. (There was no COLA payable for 2016; see. (There was no COLA payable for 2016; see Table B-1.) Additionally, since the Additionally, 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 ~~1952~~1953 claiming at age 70 would receive 132% claiming at age 70 would receive 132%
of his or her PIA plus all of the payable COLAs from of his or her PIA plus all of the payable COLAs from ~~2015~~2016 through through ~~2022~~2023. .
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 ~~1952~~1953 and claiming benefits at age 62, the claiming benefits at age 62, the
earliest eligibility age, would receive initial earliest eligibility age, would receive initial monthly benefits of $1,benefits of $1,~~238~~253.00. Those benefits would increase by . Those benefits would increase by
annual COLAs: annual COLAs: monthly benefits of $1,benefits of $1,~~238~~253 at age 62 would grow to $1, at age 62 would grow to $1,~~442~~561 at age 70. at age 70. ~~(This amount~~

21 Social Security payments always reflect the benefits due for the preceding month. 21 Social Security payments always reflect the benefits due for the preceding month.
22 SSA, 22 SSA, ~~2022~~2023 Social Security Changes, https://www.ssa.gov/news/press/factsheets/, https://www.ssa.gov/news/press/factsheets/~~colafacts2022~~colafacts2023.pdf. If the CPI-W .pdf. If the CPI-W
does not increase over the relevant period, no COLA is payable. No COLA was payable in January 2010 or January does not increase over the relevant period, no COLA is payable. No COLA was payable in January 2010 or January
2011, because the CPI-W for the third quarter of 2009 and for the third quarter of 2010 were both lower than the CPI-2011, because the 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 was payable in January 2016 because the CPI-W for the third quarter of W for the third quarter of 2008. No COLA was payable in January 2016 because the CPI-W for the third quarter of
2015 was lower than the CPI-W for the third quarter of 2014. For details, see CRS Report 94-803, 2015 was lower than the CPI-W for the third quarter of 2014. For details, see CRS Report 94-803, Social Security:
Cost-of-Living Adjustments. .
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~~reflects 16.58~~(This amount reflects 24.60% in cumulative COLAs.23) In comparison, a medium earner born in % in cumulative COLAs.23) In comparison, a medium earner born in ~~1952~~1953 claiming claiming
benefits at age 70, thereby taking advantage of all possible DRCs, would receive initial benefits at age 70, thereby taking advantage of all possible DRCs, would receive initial monthly benefits benefits
of $2,of $2,~~540~~749. (This amount reflects a 32% increase from DRCs and a . (This amount reflects a 32% increase from DRCs and a ~~16.58~~24.60% increase from % increase from
the compounding of COLAs.) COLAs.)
Table 4. Initial Monthly Benefit Amounts for Hypothetical Workers Born in ~~1952~~1953, by
Earnings Level atand Claiming Age
Primary insurance amounts (PIAs) adjusted for claiming age relative to full retirement age (FRA) and cost- Primary insurance amounts (PIAs) adjusted for claiming age relative to full retirement age (FRA) and cost-
of-living adjustments (COLAs) of-living adjustments (COLAs)
Year/~~Age~~
Percent
~~COLA~~
Very Low
Low
Medium
High
Maximum
Claiming of PIA
COLA Earner
Earner
Earner
Earner
Earner

~~PIAs fro~~m Age Hypothetical Worker PIAs from Table 2.

$ $~~767.60~~
~~$1,003.20~~
~~$1,650.80~~
~~$2,192.30~~
~~$2,642.60~~777.00 $1,015.40 $1,671.70 $2,220.10 $2,685.50

Benefit Amounts
~~2014~~2015/62 /62
75 75.0% %
- -
~~575~~582.00 .00
~~752~~761.00 .00
1, 1,~~238~~253.00 .00
1, 1,~~644~~665.00 .00
~~1,981~~2,014.00 .00
~~2015~~2016/63 /63
80 80.0% %
~~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~~0.0% 621.00 812.00 1,337.00 1,776.00 2,148.00 2017/64 86.6% 0.3% 675.00 882.00 1,453.00 1,929.00 2,334.00 2018/65 93.3% 2.0% 741.00 969.00 1,596.00 2,119.00 2,564.00 2019/66 100.0% 2.8% 817.00 1,067.00 1,758.00 2,334.00 2,824.00 2020/67 108.0% 1.6% 896.00 1,171.00 1,929.00 2,562.00 3,099.00 2021/68 116.0% 1.3% 975.00 1,274.00 2,099.00 2,787.00 3,371.00 2022/69 124.0% 5.9% 1,014.00 1,443.00 2,376.00 3,155.00 3,817.00 2023/70 132.0% 8.7% 1,277.00 1,670.00 2,749.00 3,651.00 4,416.00 .00
Source: CRS. CRS.
Notes: Under current law, monthly benefit amounts are rounded down to the nearest Under current law, monthly benefit amounts are rounded down to the nearest ~~dol ar~~dollar (42 U.S.C. (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 generally stable. That is, from year to year, the average earnings that benefits replace—remain generally 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 As demonstrated inin Table 2, the benefit formula is generally considered to be he benefit formula is generally considered to be progressive. In this . In this
context, context, progressive means that a higher share of earnings is replaced for career low earners than means that a higher share of earnings is 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.
Additionally, as shown Additionally, as shown inin Table 4, ~~a worker~~a worker who claimed benefits early—before reaching FRA— 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 The cumulative effect of the 23 The cumulative effect of the ~~COLAs~~COLAs shown in shown in Table 4 is 1~~6.58~~24.60%. %.
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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.24 provide the same amount of lifetime benefits regardless of when a worker claims benefits.24
Lastly, all things being equal, the more years a worker is able to work, the higher dollar amount Lastly, all 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 will generally result in he or she may receive in benefits. Said differently, years of zero earnings will generally result in
lower lifetime earnings in the Social Security benefit computation. Consider the hypothetical lower lifetime earnings in the Social Security benefit computation. Consider the hypothetical
earners born in earners born in ~~1952~~1953 who are assumed to have worked continuously who are assumed to have worked continuously from age 21 through 61, inclusive (i.e., 41 years of covered employment). If each scaled earner’s . 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 all decrease. (See Scenario indexed earnings, the amount used to compute AIME, and PIA would all 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. 40s) was replaced by a year of lower earnings. ~~This~~Because the hypothetical workers are assumed to have worked continuously, this has the effect of essentially taking the has the effect of essentially taking the
second- through 36th-highest years of earnings fromsecond- through 36th-highest years of earnings from Table A-3.
Scenario Scenario BC demonstrates how a worker can benefit from 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 still had 35 years of years of earnings are used in the benefit formula, the hypothetical earners still had 35 years of
earnings. However, if a worker does not have 35 years of earnings, the benefit formula will earnings. However, if a worker does not have 35 years of earnings, the benefit formula 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 ~~1952~~1953 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 seven years. In this example, Scenario C, the hypothetical caregiving, or unemployment) of seven years. In this example, Scenario C, the hypothetical
workers would not have years of workers would not have years of extra earningsearnings beyond 35, and one year of zero earnings would be used in , and one year of zero earnings would be used in
their benefit their benefit ~~calculations.~~calculations. Table 5 shows how their highest 35 years of wage-indexed earnings, 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 AIME, 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 essentially cumulative lifetime earnings, some replacement rates increase. This has the effect of essentially
taking the eighth- through 41st-highest years of earnings fromtaking the eighth- through 41st-highest years of earnings from Table A-3. Since the hypothetical ince the hypothetical
earners had 41 years (from age 21 through age 61earners had 41 years (from age 21 through age 61, inclusive) of earnings, the highest 35 years of earnings ) of earnings, the highest 35 years of earnings
would now include one year of zero earnings. would now include one year of zero earnings.
Table 5. Wage-Indexed Earnings, Average Indexed Monthly Earnings (AIMEs), and
Primary Insurance Amounts (PIAs) for Hypothetical Earners Born in ~~1952~~1953, by
Earnings Level and Years of Earnings
Very Low
Low
Medium
Maximum

High Earner
Earner
Earner
~~High~~ Earner
Earner
Scenario A (fro Scenario A (from Table 1 andand Table 2) Workers in Scenario A have 41 years of covered employment (ages 21 through 61, inclusive), and the highest 35 years of covered employment are used to calculate benefits. Total Earnings from Highest 35 Years of $391,406.63 $704,280.24 $1,565,493.44 $2,504,787.60 $3,807,774.57
~~Total Earnings from~~
~~Highest 35 Years of~~
~~$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
~~920~~931.00 .00
1, 1,~~656~~676.00 .00
3, 3,~~680~~727.00 .00
5, 5,~~888~~963.00 .00
~~8,890~~9,066.00 .00
PIA PIA
~~767.60~~
~~1,003.20~~
~~1,650.80~~
~~2,192.30~~
~~2,642.60~~777.00 1,015.40 1,671.70 2,220.10 2,685.50
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)~~

24 Actuarial equivalence is dependent on life expectancies, which are known to vary by demographic group. See 24 Actuarial equivalence is dependent on life expectancies, which are known to vary by demographic group. See
~~footno~~tefootnote 19.
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Scenario B (Scenario A with highest year of indexed earnings removed) Workers in Scenario B have 40 years of covered employment, and the highest 35 years of covered employment are used to calculate benefits. Total Earnings from Total Earnings from
Highest 35 Years of Highest 35 Years of
$ $~~381,685.35~~
~~$687,025.00~~
~~$1,526,387.97~~
~~$2,442,406.91~~
~~$3,692,557.35~~386,468.93 $695,392.38 $1,545,742.65 $2,473,231.22 $3,779,564.02
Waged Indexed Earnings Waged Indexed Earnings
AIME AIME
~~908~~920.00 .00
1, 1,~~635~~655.00 .00
3, 3,~~634~~680.00 .00
5, 5,~~815~~888.00 .00
8, 8,~~791~~998.00 .00
PIA PIA
~~763.80~~
~~996.40~~
~~1,636.10~~
~~2,181.40~~
~~2,627.80~~773.40 1,008.60 1,656.60 2,208.80 2,675.30
PIA as Percent of AIME PIA as Percent of AIME
84% 84%
61% 61%
45% 45%
38% 38%
30% 30%
Percent Reduction in PIA Percent Reduction in PIA
~~from Scenario A~~
0.5% 0.5%
0.7% 0.7%
0.9% 0.9%
0.5% 0.5%
0. 0.6%
4% from Scenario A Scenario C (Scenario A with highest seven years of Scenario C (Scenario A with highest seven years of indexed earnings removed) Workers in Scenario C have 34 years of covered employment. Their benefit calculations include one year of zero earnings. ~~earnings removed)~~
Total Earnings from Total Earnings from
Highest 35 Years of Highest 35 Years of
$ $~~333,684.98~~
~~$600,597.74~~
~~$1,334,164.89~~
~~$2,135,036.12~~
~~$3,371,699.59~~337,630.61 $607,636.03 $1,350,748.49 $2,161,168.73 $3,462,609.85
Waged Indexed Earnings Waged Indexed Earnings
AIME AIME
~~794~~803.00 .00
1, 1,~~429~~446.00 .00
3, 3,~~176~~216.00 .00
5, 5,~~083~~145.00 .00
8, 8,~~027~~244.00 .00
PIA PIA
~~714.60~~
~~930.50~~
~~1,489.60~~
~~2,071.60~~
~~2,513~~722.70 941.80 1,508.20 2,097.40 2,562.20 .20
PIA as Percent of AIME PIA as Percent of AIME
90% 90%
65% 65%
47% 47%
41% 41%
31% 31%
Percent Reduction in PIA Percent Reduction in PIA
~~from Scenario A~~
~~6.9~~7.0% %
7.2% 7.2%
9.8% 9.8%
5.5% 5.5%
4. 4.9%
6% from Scenario A 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~~dollar (see 20 C.F.R. §404.211). Under current law, PIA is rounded down to the nearest dime (42 U.S.C. (see 20 C.F.R. §404.211). Under current law, PIA is rounded down to the nearest dime (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 auxiliary benefits based on the workers’ family members of workers are eligible to receive auxiliary benefits based on the workers’
earnings. In September earnings. In September ~~2021, 10.1~~2022, 9.8 million family members of retired, disabled, or deceased million family members of retired, disabled, or deceased
workers received Social Security auxiliary benefits (about workers received Social Security auxiliary benefits (about ~~15.5~~14.9% 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.27receive 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,~~
~~subject to a maximum family benefit. 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~~
~~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~~

25 SSA, “Monthly Statistical Snapshot, September 25 SSA, “Monthly Statistical Snapshot, September ~~2021~~2022,” Table 2. See the latest edition of the Monthly Statistical ,” Table 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 computation of dependent benefits may be quite complex. For additional details and information on other 26 The computation of dependent benefits may be quite complex. For additional details and information on other
dependent benefits, see “Benefits for the Worker’s Family Members” in CRS Report R42035, dependent benefits, see “Benefits for the Worker’s Family Members” in CRS Report R42035, Social Security Primer. .
27 Someone with an auxiliary benefit higher than his or her retired-worker benefit is referred to as dually entitled and 27 Someone with an auxiliary benefit higher than his or her retired-worker benefit is referred to as dually entitled and
receives his or her retired-worker benefit plus a reduced auxiliary benefit amount equal to the full auxiliary benefit receives his or her retired-worker benefit plus a reduced auxiliary benefit amount equal to 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
dual entitlement, see CRS In Focus IF10738, dual entitlement, see CRS In Focus IF10738, Social Security Dual Entitlement. .
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link to page link to page 2827 Social Security: Benefit Calculation Benefits payable to family members are equal to a specified percentage of the worker’s PIA, subject to a maximum family benefit. 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 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 ~~Social Security: Benefit Calculation~~

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.28 of 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 all benefits payable on the worker’s record exceeds the family maximum, record.29 If the sum of all 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 ~~2022~~2023 or dies in or dies in ~~2022~~2023
before attaining the age of 62, the total amount of benefits payable to the family is limited to before 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,~~308~~425 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,~~308~~425 and through $ and through $~~1,889~~2,056, plus , plus
 134% of the worker’s PIA over $ 134% of the worker’s PIA over $~~1,889~~2,056 and through $2, and through $2,~~463~~682, plus , plus
 175% of the worker’s PIA over $2, 175% of the worker’s PIA over $2,~~463~~682.30 .30
The dollar amounts in the maximum family benefit formula ($1, The dollar amounts in the maximum family benefit formula ($1,~~308/$1,889/$2,463 in 2022) are~~
425, $2,056, and $2,682 in 2023) are indexed to the AWI, indexed to the AWI, just as the bend points as in the regular benefit formula. In the case of a 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, including Other 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 government pension offset, which reduces Social Security spousal benefits~~
~~paid to people who have pensions from employment that was not subject to~~
~~Social Security payroll taxes;33 and~~

28 Similar to a worker’s benefit, auxiliary benefits paid to family members may also be subject to adjustment based on 28 Similar to a worker’s benefit, auxiliary benefits paid to family members may also be subject to adjustment based on
age. For more information, see CRS Report R41479, age. For more information, see CRS Report R41479, Social Security: Revisiting Benefits for Spouses and Survivors. .
29 Social Security Act, Title II, §203. 29 Social Security Act, Title II, §203.
30 SSA, “Formula for Family Maximum Benefit,” https://www.socialsecurity.gov/OACT/COLA/familymax.html. 30 SSA, “Formula for Family Maximum Benefit,” https://www.socialsecurity.gov/OACT/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 or a Surviving Divorced Spouse is Entitled,” https://secure.ssa.gov/apps10/“Family Benefits Where a Divorced Spouse or a Surviving Divorced Spouse is Entitled,” https://secure.ssa.gov/apps10/
poms.nsf/lnx/0300615682. poms.nsf/lnx/0300615682.
32 See CRS Report 98-35, 32 See CRS Report 98-35, Social Security: The Windfall Elimination Provision (WEP). .
~~33 See CRS Report RL32453, Social Security: The Government Pension Offset (GPO).~~
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Congressional Research Service 12 Social Security: Benefit Calculation  the government pension offset, which reduces Social Security spousal benefits paid to people who have pensions from employment that was not subject to Social Security payroll taxes;33 and
 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

33 See CRS Report RL32453, Social Security: The Government Pension Offset (GPO). 34 See CRS Report R41242, 34 See CRS 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 illustrate how program changes may affect beneficiaries.35 program under current law and to illustrate 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 relatively with relatively medium wages and gradually increase until age 50, remaining relatively wages and gradually 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 hypothetical earnings groups are shown inin 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 ~~2021~~2022 Trustees Report ~~Assumptions~~,
~~August 2021~~Assumptions, June 2022, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/~~an2021~~an2022-3.pdf. -3.pdf.
Notes: There is no scaled factor for a maximum earner. There is no scaled factor for a maximum 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 examplAs an 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
~~2020~~2021 had career average earnings of $ had career average earnings of $~~53,892 (in 2019~~55,381 (in 2020 dollars). For dollars). For actual workers retiring in retiring in
years years ~~2015-2020, 56.2~~2016-2021, 56.1% had an AIME less than the hypothetical medium earner with $% had an AIME less than the hypothetical medium earner with $~~53,892~~55,381 in in
career-average earnings. During the same career-average earnings. During the same ~~2015-2020~~2016-2021 period, 70. period, 70.62% of female workers had an % of female workers had an
AIME less than this hypothetical medium earner, whereas 42.3% of males had an AIME less than AIME less than this hypothetical medium earner, whereas 42.3% 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

35 OCACT, Scaled Factors for Hypothetical Earnings Examples Under the 35 OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2021~~2022 Trustees Report Assumptions. See Trustees Report Assumptions. See
https://www.ssa.gov/OACT/NOTES/ran3/https://www.ssa.gov/OACT/NOTES/ran3/~~an2021~~an2022-3.pdf. -3.pdf.
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to hypothetical scaled workers. For instance, 30.3% of workers retiring in to hypothetical scaled workers. For instance, 30.3% of workers retiring in ~~2015-2020~~2016-2021 have have
AIMEs closest to that of a hypothetical medium-scaled worker. 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 ~~2015-2020~~2016-2021, Relative to AIMEs for Hypothetical Workers
Retiring in ~~2020~~2021

Percent with AIME Less Than
Percent with AIME Closest
AIME for Hypothetical Case
to AIME for Hypothetical
Casea
Hypothetical ~~Worke~~rbWorkerb
All
All
All
All
All
All
(Career-Average ~~Earning~~sEarnings)
Males
Females
Workers Males
Females
Workers
c
Very Low Very Low
7. 7.87% %
15. 15.83% %
11. 11.85% %
12. 12.21% %
23. 23.93% %
~~18.0~~17.7% %
($13, ($13,~~473~~845) )
Low Low
16. 16.3
~~32.0~~
~~24.0~~
~~16.0~~
~~29.2~~2 31.4 23.7 15.9 29.3
22.5 22.5
($24, ($24,~~252~~922) )
Medium Medium
42.3 42.3
70. 70.62
56. 56.2
~~29.9~~1 30.0
30.7 30.7
30.3 30.3
($ ($~~53,892~~55,381) )
High High
71. 71.43
91. 91.51
81. 81.21
27. 27.10
13. 13.25
20.3 20.3
($ ($~~86,228~~88,610) )
Maximum Maximum
100.0 100.0
100.0 100.0
100.0 100.0
~~14.9~~
~~2.9~~
~~9.0~~
~~($132,868~~15.0 3.1 9.1 ($136,833) )
Source: OCACT, OCACT, Scaled Factors for Hypothetical Earnings Examples Under the ~~2021~~2022 Trustees Report Assumptions, ,
Actuarial Note Number Actuarial Note Number ~~2021.3, August 2021~~2022.3, June 2022, Table 1, https://www.ssa.gov/OACT/NOTES/ran3/, Table 1, https://www.ssa.gov/OACT/NOTES/ran3/~~an2021~~an2022-3.pdf. -3.pdf.
Notes: Worker distributions include individuals who are dually entitled or may become dually entitled to a Worker distributions include individuals who are dually entitled or may become dually entitled to a
higher benefit in the future based on another worker’s earnings record. higher benefit in the future based on another worker’s earnings record. If dually entitled workers were excluded from the above distribution, a higher percentage of the remaining workers would have earnings closer to the higher-level hypothetical workers. For more information on dual For more information on dual
entitlement, see CRS In Focus IF10738, entitlement, see CRS In Focus IF10738, Social Security Dual Entitlement. .
a. Rounded values do not necessarily sum to 100%. The percentage of workers with AIME values closest to a. Rounded values do not necessarily sum to 100%. The percentage of workers with AIME values closest to
that of the hypothetical maximum worker is expected to decline in future years. This is due to a significant that of the hypothetical maximum worker is expected to decline in future years. This is due to a significant
increase in the OASDI maximum taxable earnings, relative to the AWI, in 1981 and a smaller increase in increase in the OASDI maximum taxable earnings, relative to the AWI, in 1981 and a smaller increase in
1990. 1990.
b. A hypothetical worker is assumed to have a long and consistent career with earnings at each age from 21 b. A hypothetical worker is assumed to have a long and consistent career with earnings at each age from 21
through 64. through 64.
c. Career-average earnings of hypothetical scaled workers retiring at age 62 in c. Career-average earnings of hypothetical scaled workers retiring at age 62 in ~~2020~~2021. Earnings are wage-. Earnings are wage-
indexed to indexed to ~~2019~~2020 in this calculation. in this calculation.
Figure A-1 showed the scaled factors for each hypothetical earning showed the scaled factors for each hypothetical earning ~~level~~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 ~~1952~~1953 birth cohort, the youngest birth cohort for which all information birth cohort, the youngest birth cohort for which all 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 ~~1973~~1974 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 eligibility age (i.e., 62) in early 2000s. These workers reached early eligibility age (i.e., 62) in ~~2014~~2015, full retirement age (i.e., , full retirement age (i.e.,
66) in 66) in ~~2018~~2019, and age 70 in , and age 70 in ~~2022~~2023. 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.
Congressional Research Service Congressional Research Service
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Social Security: Benefit Calculation

Table A-2. Hypothetical Wages for ~~1952~~1953 Birth Cohort by Earnings Level
~~Year~~
~~Age~~
Very Low
Low
Medium
High
Maximum
~~Earner~~Year Age
~~Earner~~
Earner
Earner
~~Earner~~
~~1973~~
21
~~$553.35~~
~~$993.00~~
~~$2,205.83~~
~~$3,532.35~~
~~$10,800.00~~Earner Earner Earner
1974 1974
22
~~714.74~~
~~1,284.92~~
~~2,850.92~~
~~4,561.47~~21 578.21 1,035.97 2,304.83 3,686.12
13,200.00 13,200.00
1975 1975
23
~~966.66~~
~~1,743.45~~
~~3,866.65~~
~~6,188.37~~22 759.52 1,363.69 3,038.08 4,850.58
14,100.00 14,100.00
1976 1976
24
~~1,227.12~~
~~2,214.36~~
~~4,917.71~~
~~7,870.19~~23 1,024.14 1,845.30 4,105.78 6,569.25
15,300.00 15,300.00
1977 1977
2524
1, 1,~~466.92~~
~~2,640.45~~
~~5,867.66~~
~~9,388.26~~290.89 2,327.51 5,183.10 8,283.19
16,500.00 16,500.00
1978 1978
26
~~1,741.74~~
~~3,135.14~~
~~6,956.42~~
~~11,136.61~~25 1,572.85 2,839.57 6,301.95 10,081.01
17,700.00 17,700.00
1979 1979
27
~~2,054.82~~
~~3,684.91~~
~~8,196.33~~
~~13,121.02~~26 1,882.63 3,386.44 7,530.53 12,053.43
22,900.00 22,900.00
1980 1980
28
~~2,390.07~~
~~4,304.63~~
~~9,560.28~~
~~15,303.96~~27 2,214.88 3,991.79 8,884.56 14,215.29
25,900.00 25,900.00
1981 1981
29
~~2,782.17~~
~~5,013.41~~
~~11,128.66~~
~~17,808.62~~28 2,616.89 4,710.40 10,467.56 16,748.09
29,700.00 29,700.00
1982 1982
30
~~3,080.64~~
~~5,536.44~~
~~12,293.51~~
~~19,675.43~~29 2,920.80 5,260.35 11,683.20 18,701.83
32,400.00 32,400.00
1983 1983
31
~~3,352.63~~
~~6,034.74~~
~~13,395.29~~
~~21,441.61~~30 3,215.48 5,775.67 12,846.68 20,542.50
35,700.00 35,700.00
1984 1984
3231
3, 3,~~662.66~~
~~6,599.24~~
~~14,666.78~~
~~23,460.39~~533.58 6,373.35 14,150.46 22,637.50
37,800.00 37,800.00
1985 1985
33
~~3,936.47~~
~~7,065.45~~
~~15,712.22~~
~~25,149.65~~32 3,818.71 6,863.58 15,241.19 24,392.64
39,600.00 39,600.00
1986 1986
3433
4, 4,~~139.91~~
~~7,465.70~~
~~16,576.98~~
~~26,537.03~~035.98 7,257.84 16,143.94 25,826.83
42,000.00 42,000.00
1987 1987
35
~~4,496.07~~
~~8,107.66~~
~~18,002.70~~
~~28,800.64~~34 4,403.94 7,923.40 17,597.32 28,174.13
43,800.00 43,800.00
1988 1988
3635
4, 4,~~814.18~~
~~8,661.65~~
~~19,237.37~~
~~30,760.46~~717.51 8,487.64 18,870.02 30,180.44
45,000.00 45,000.00
1989 1989
37
~~5,085.19~~
~~9,145.30~~
~~20,300.55~~
~~32,500.97~~36 4,984.69 8,984.50 19,958.85 31,938.18
48,000.00 48,000.00
1990 1990
3837
5, 5,~~383.16~~
~~9,693.90~~
~~21,532.65~~
~~34,464.86~~299.05 9,546.70 21,217.23 33,960.19
51,300.00 51,300.00
1991 1991
3938
5, 5,~~649.20~~
~~10,186.02~~
~~22,618.63~~
~~36,207.26~~583.77 10,033.34 22,313.27 35,705.59
53,400.00 53,400.00
1992 1992
40
~~6,009.08~~
~~10,825.52~~
~~24,036.32~~
~~38,462.70~~39 5,940.27 10,687.91 23,761.10 38,026.93
55,500.00 55,500.00
1993 1993
41
~~6,107.02~~
~~11,011.15~~
~~24,451.23~~
~~39,140.48~~40 6,060.76 10,895.49 24,219.91 38,770.35
57,600.00 57,600.00
1994 1994
4241
6, 6,~~342.19~~
~~11,401.69~~
~~25,345.02~~
~~40,547.28~~270.93 11,306.68 25,107.48 40,190.97
60,600.00 60,600.00
1995 1995
4342
6, 6,~~645.82~~
~~11,957.54~~
~~26,558.58~~
~~42,469.03~~571.71 11,858.72 26,336.23 42,123.15
61,200.00 61,200.00
1996 1996
44
~~7,022.67~~
~~12,620.07~~
~~28,038.84~~
~~44,882.87~~43 6,944.93 12,516.41 27,831.53 44,520.08
62,700.00 62,700.00
1997 1997
4544
7, 7,~~459.87~~
~~13,438.74~~
~~29,839.49~~
~~47,748.67~~405.02 13,329.04 29,647.51 47,446.98
65,400.00 65,400.00
1998 1998
4645
7, 7,~~879.17~~
~~14,199.83~~
~~31,545.55~~
~~50,449.80~~850.31 14,113.24 31,372.39 50,190.04
68,400.00 68,400.00
1999 1999
47
~~8,348.74~~
~~15,021.63~~
~~33,394.94~~
~~53,413.63~~46 8,318.27 14,960.69 33,273.07 53,230.81
72,600.00 72,600.00
2000 2000
4847
8,810.42 8,810.42
15,852.33 15,852.33
35, 35,~~241.68~~
~~56,367.40~~209.53 56,303.09
76,200.00 76,200.00
2001 2001
4948
9,020.61 9,020.61
16,230.51 16,230.51
36,082.42 36,082.42
57,712.13 57,712.13
80,400.00 80,400.00
2002 2002
5049
9,111.07 9,111.07
16,393.28 16,393.28
36, 36,~~444.29~~
~~58,290.91~~411.04 58,224.41
84,900.00 84,900.00
2003 2003
5150
9, 9,~~299.73~~333.80
16,759.96 16,759.96
37,267.06 37,267.06
59, 59,~~613.66~~647.73
87,000.00 87,000.00
2004 2004
5251
9, 9,~~696.41~~
~~17,467.79~~
~~38,821.27~~
~~62,099.77~~732.05 17,503.44 38,928.22 62,278.02
87,900.00 87,900.00
2005 2005
53
~~9,977.29~~
~~17,959.13~~
~~39,946.13~~
~~63,928.59~~52 10,051.20 18,069.99 40,167.85 64,298.12
90,000.00 90,000.00
2006 2006
5453
10, 10,~~358.58~~
~~18,629.98~~
~~41,395.66~~
~~66,248.52~~435.88 18,784.59 41,782.17 66,828.29 94,200.00 2007 54 10,828.67 19,475.44 43,274.27 69,254.99 97,500.00 2008 55 10,953.77 19,675.45 43,773.73 70,021.44 102,000.00 2009 56 10,544.31 18,971.61 42,177.23 67,499.85 106,800
~~94,200.00~~
~~2007~~
55
~~10,707.45~~
~~19,233.01~~
~~42,749.00~~
~~68,406.48~~
~~97,500~~.00 .00
Congressional Research Service Congressional Research Service
16 16

link to page link to page 2423 link to page link to page 2423 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
~~Earner~~Year Age
~~Earner~~
Earner
Earner
Earner
~~2008~~
56
~~10,705.76~~
~~19,262.10~~
~~42,781.69~~
~~68,450.71~~
~~102,000.00~~
~~2009~~Earner Earner 2010
57 57
10, 10,~~259.33~~
~~18,483.07~~
~~41,037.30~~
~~65,708.54~~543.48 18,961.59 42,132.24 67,386.58
106,800.00 106,800.00
~~2010~~2011
58 58
10, 10,~~210.09~~
~~18,378.16~~
~~40,840.35~~
~~65,302.89~~572.98 18,996.99 42,248.96 67,606.93
106,800.00 106,800.00
~~2011~~2012
59 59
10, 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~~548.56 18,969.67 42,149.91 67,457.58 110,100.00 2013 60 10,189.61 18,359.26 40,803.34 65,312.27 113,700.00 2014 61 9,947.05 17,895.39 39,834.66 63,679.68 117,000.00 2015 62 9,956.42 17,892.69 39,777.57 63,634.49 118,500.00 2016 63 9,728.43 17,462.53 38,865.08 62,164.67 118,500.00 2017 64 9,712.12 17,461.70 38,798.18 62,097.21 127,200.00 .00
Source: CRS. CRS.
Notes: Very low, low, medium, and high earners are assumed to work at specified ages with earnings equivalent 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, to the respective scaled earners as shown in OCACT, Scaled Factors for Hypothetical Earnings Examples Under the
~~2021~~2022 Trustees Report Assumptions, , ~~August 2021~~June 2022, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/, Table 6, https://www.ssa.gov/OACT/NOTES/ran3/~~an2021~~an2022-3.pdf. -3.pdf.
~~All dol ar~~All dollar values are shown in nominal terms (i.e., not indexed). Maximum earners are assumed to have earned at values are shown in nominal terms (i.e., not indexed). Maximum earners are assumed to have earned at
or above the contribution base in each respective yearor above the contribution base in each respective 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 (seeearnings to SSA’s AWI (see 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 ~~1952~~1953 are shown are shown inin Table A-3.
Table A-3. Wage-Indexed Hypothetical Wages for ~~1952~~1953 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
~~Facto~~raYear Age Factora
Earner
Earner
Earner
Earner
Earner
~~1973~~1974
21 21
5. 5.~~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~~590 3,231.95 5,790.57 12,882.90 20,603.67 73,781.77 1975 22 5.201 3,950.16 7,092.33 15,800.63 25,227.15 73,332.05 1976 23 4.865 4,982.59 8,977.63 19,975.23 31,960.37 74,436.71 1977 24 4.590 5,925.24 10,683.38 23,790.72 38,020.27 75,735.89 1978 25 4.252 6,688.34 12,074.92 26,798.23 42,868.19 75,266.97 1979 26 3.910 7,361.66 13,242.01 29,446.63 47,132.57 89,545.92 1980 27 3.587 7,945.20 14,319.32 31,870.59 50,992.95 92,908.22 1981 28 3.259 8,528.75 15,351.75 34,115.00 54,584.00 96,795.81 1982 29 3.089 9,022.52 16,249.51 36,090.08 57,771.06 100,085.50 1983 30 2.946 9,471.40 17,012.61 37,840.72 60,509.24 105,156.64 1984 31 2.782 9,830.51 17,730.82 39,366.92 62,978.09 105,160.53 1985 32 2.668 10,189.61 18,314.37 40,668.67 65,087.83 105,666.23 1986 33 2.591 10,458.94 18,808.14 41,835.77 66,928.25 108,839.76 1987 34 2.436 10,728.27 19,301.91 42,868.19 68,634.00 106,699.61 1988 35 2.322 10,952.71 19,705.90 43,810.84 70,070.42 104,477.24 1989 36 2.233 11,132.26 20,065.01 44,573.94 71,327.29 107,198.01 Congressional Research Service 17 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 22 link to page 23 link to page 13 link to page 13 Social Security: Benefit Calculation Index Very Low Low Medium High Maximum Year Age Factora Earner Earner Earner Earner Earner 1990 37 2.135 11,311.82 20,379.22 45,292.15 72,494.38 109,509.45 1991 38 2.058 11,491.37 20,648.55 45,920.59 73,481.92 109,896.92 1992 39 1.957 11,626.03 20,917.88 46,504.13 74,424.57 108,622.07 1993 40 1.940 11,760.70 21,142.32 46,997.90 75,232.56 111,770.84 1994 41 1.890 11,850.47 21,366.76 47,446.79 75,950.77 114,518.66b 1995 42 1.817 11,940.25 21,546.32 47,850.78 76,534.31 111,195.39 1996 43 1.732 12,030.03 21,680.98 48,209.88 77,117.86 108,609.19 1997 44 1.637 12,119.80 21,815.65 48,524.10 77,656.52 107,040.24 1998 45 1.555 12,209.58b 21,950.31 48,793.43b 78,060.51 106,382.43 1999 46 1.473 12,254.47b 22,040.09b 49,017.87b 78,419.62b 106,954.30 2000 47 1.396 12,299.36c 22,129.86c 49,152.54b 78,599.17b 106,375.27 2001 48 1.363 12,299.36b 22,129.86b 49,197.42c 78,688.94c 109,623.26 2002 49 1.350 12,299.36b 22,129.86b 49,152.54b 78,599.17b 114,609.48b 2003 50 1.318 12,299.36b 22,084.97b 49,107.65b 78,599.17b 114,641.88b 2004 51 1.259 12,254.47b 22,040.09b 49,017.87b 78,419.62b 110,682.46 2005 52 1.215 12,209.58 21,950.31b 48,793.43 78,105.40b 109,326.47 2006 53 1.161 12,119.80 21,815.65 48,524.10 77,611.63 109,400.01 2007 54 1.111 12,030.03 21,636.09 48,075.22 76,938.31 108,316.88 2008 55 1.086 11,895.36 21,366.76 47,536.56 76,040.54 110,768.01 2009 56 1.103 11,626.03 20,917.88 46,504.13 74,424.57 117,756.47c 2010 57 1.077 11,356.70 20,424.11 45,381.93 72,584.15 115,037.55b 2011 58 1.044 11,042.49 19,840.57 44,125.06 70,609.08 111,542.55 2012 59 1.013 10,683.38 19,212.13 42,688.64 68,319.78 111,507.22 2013 60 1.000 10,189.61 18,359.26 40,803.34 65,312.27 113,700.00b 2014 61 1.000 9,947.05 17,895.39 39,834.66 63,679.68 117,000.00b Total Indexed Earnings 423,546.55 762,141.08 1,694,187.80 2,710,599.81 4,269,873.90 Highest 35 Years’ Indexed Earnings 391,406.63 704,280.24 1,565,493.44 2,504,787.60 3,807,774.57 Average Indexed Monthly Earning’s (AIME) 931.00 1,676.00 3,727.00 5,963.00 9,066.00
Source: CRS. CRS.
Note: Figures in bold indicate the highest 35 years of wage-indexed earnings. 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 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 (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 for 2010 is computed by dividing the AWI from ~~2011~~2013—the year in which the workers turned 60—by the —the year in which the workers turned 60—by the
~~Congressional Research Service~~
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AWI from year 2010 (i.e., $AWI from year 2010 (i.e., $~~42,979.61~~44,888.16/$41,673.83 or 1./$41,673.83 or 1.~~031~~077). Results are displayed to three decimals. See ). Results are displayed to three decimals. See
Table B-1 forfor AWI values. b. Removed for Scenario C (see “Features of the Benefit Formula”). c. Removed for Scenarios B and C (see “Features of the Benefit Formula”). ~~AWI values.~~
Congressional Research Service Congressional Research Service
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Appendix B. Social Security Program Information
Table B-1. Parameters Used to Calculate Social Security Eligibility and Benefits,
Select Years
Amount Contribution First Primary
~~Amount~~
~~Average~~
~~Annual~~
~~Cost-of-~~
~~and Benefit~~
~~Insurance~~
Average Cost-of- Second
Needed to
~~Year~~
~~Wage~~
~~Change~~
~~Living~~
~~Base~~
~~Amount~~Annual and Benefit Insurance Wage Living
PIA
Earn One
~~Index~~
~~(AWI)~~
~~Adjustment~~
~~(Taxable~~
~~(PIA) Bend~~Year Change Base Amount Index Adjustment
Bend
Quarter of
(AWI)
(~~COLA)a~~
~~Maximum)~~
~~Point~~
~~Pointb~~
~~Coverage~~
bTaxable (PIA) Bend (AWI) (COLA)a Pointb Coverage Maximum) Pointb
(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
~~197~~8b1978b 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
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2019

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Amount Contribution First Primary
~~Amount~~
~~Average~~
~~Annual~~
~~Cost-of-~~
Average Cost-of- Second Needed to Annual and Benefit
Insurance
~~Second~~
~~Needed to~~
~~Year~~
~~Wage~~
~~Change~~
~~Living~~Wage Living PIA Earn One Year Change
Base
Amount
~~PIA~~
~~Earn One~~
~~Index~~
~~(AWI)~~
~~Adjustment~~
Index Adjustment Bend Quarter of (AWI) (Taxable
(PIA) Bend
~~Bend~~
~~Quarter of~~
(AWI)
(~~COLA)a~~
~~Maximum)~~
~~Point~~
~~Pointb~~
~~Coverage~~
bCOLA)a Pointb Coverage Maximum) Pointb
(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
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Amount Contribution First Primary
~~Amount~~
~~Average~~
~~Annual~~
~~Cost-of-~~
~~and Benefit~~
~~Insurance~~
Average Cost-of- Second
Needed to
~~Year~~
~~Wage~~
~~Change~~
~~Living~~
~~Base~~
~~Amount~~Annual and Benefit Insurance Wage Living
PIA
Earn One
~~Index~~
~~(AWI)~~
~~Adjustment~~
~~(Taxable~~
~~(PIA) Bend~~Year Change Base Amount Index Adjustment
Bend
Quarter of
(AWI)
(~~COLA)a~~
~~Maximum)~~
~~Point~~
~~Pointb~~
~~Coverage~~
bTaxable (PIA) Bend (AWI) (COLA)a Pointb Coverage Maximum) Pointb
(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 55,628.60
2.83% 2.83%
1.6% 1.6%
137,700 137,700
960 960
5,785 5,785
1,410 1,410
2021 2021
—
—60,575.07 8.89%
1.3% 1.3%
142,800 142,800
996 996
6,002 6,002
1,470 1,470
2022 2022

5.9% 5.9%
147,000 147,000
1,024 1,024
6,172 6,172
1,510 1,510 2023 8.7% 160,200 1,115 6,721 1,640
Source: CRS. CRS.
Notes: Dashes indicate data not available. Dashes indicate data not available.
a. Automatic COLAs became effective in 1975 as part of P.L. 92-336. Prior to this, each COLA was approved a. Automatic COLAs became effective in 1975 as part of P.L. 92-336. Prior to this, each COLA was approved
through legislation. For more information, see CRS Report 94-803, through legislation. For more information, 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 that coupled wage and b. Prior to 1978, the Social Security benefit amounts were calculated using a process 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 earned a quarter of coverage for each quarter in which he or she earned $50 in c. Prior to 1978, a worker earned a quarter of coverage for each quarter in which he or she earned $50 in
covered employment. P.L. 95-216 stipulated that a quarter of coverage for 1978 would be $250, and that covered employment. P.L. 95-216 stipulated that a quarter of coverage for 1978 would be $250, and that
amount would be indexed annually to the average wage index. amount would be indexed annually 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
F D Birth/ R R~~Birth/Age~~
~~FRA~~
~~DRC~~
62
63
64
65
66
67
68
69
70
Age 62 A C 62
1924/1986 1924/1986
65 65
3 3%
80 80%
86 2⁄3 86 2⁄3 % 93 1⁄393 1⁄3%
100 100%
103 103%
106 106%
109 109%
112 112%
115 115%
1925- 1925-
~~1926/1987-~~
1926/ 65 65
3 1⁄ 3 1⁄ 1987-1988 2 2
80 80
86 2⁄3 86 2⁄3 93 1⁄3 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~~
~~1927-~~
~~1928/1989-~~
1927-1928/ 65 65
4 4
80 80
86 2⁄ 86 2⁄3 1989-1990 3 93 1⁄3 93 1⁄3
100 100
104 104
108 108
112 112
116 116
120 120
~~1990~~
~~1929-~~
~~1930/1991-~~
1929-1930/ 65 65
4 1⁄ 4 1⁄ 1991-1992 2 2
80 80
86 2⁄3 86 2⁄3 93 1⁄3 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~~
~~1931-~~
~~1932/1993-~~
1931-1932/ 65 65
5 5
80 80
86 2⁄ 86 2⁄3 1993-1994 3 93 1⁄3 93 1⁄3
100 100
105 105
110 110
115 115
120 120
125 125
~~1994~~
~~1933-~~
~~1934/1995-~~
1933-1934/ 65 65
5 1⁄ 5 1⁄ 1995-1996 2 2
80 80
86 2⁄3 86 2⁄3 93 1⁄3 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~~1935-1936/ 65 6 80 86 2⁄ 1997-1998 3 93 1⁄3 100 106 112 118 124 130
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Year of
F D Birth/ R R~~Birth/Age~~
~~FRA~~
~~DRC~~
62
63
64
65
66
67
68
69
70
Age 62 A C62
~~1935-~~
~~1936/1997-~~
65
6
80
~~86 2⁄3 93 1⁄3~~
~~100~~
~~106~~
~~112~~
~~118~~
~~124~~
~~130~~
~~1998~~
1937/1999 1937/1999
65 65
6 1⁄2 6 1⁄2
80 80
86 2⁄3 86 2⁄3 93 1⁄3 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
1938/2000 65, 2 6 1⁄ mo. 2 79 1⁄6 85 5⁄9 92 2⁄9 98 8⁄9 105 5⁄12 111 11⁄12 118 5⁄12 124 11⁄12 131 5⁄12~~65, 2~~
~~111 11⁄~~
~~124 11⁄~~
~~131 5⁄~~
~~1938/2000~~
1
1
1
~~mo.~~
~~6 1⁄2~~
~~79 1⁄6 85 5⁄9 92 2⁄9 98 8⁄9 105 5⁄12~~
2
~~118 5⁄12~~
2
2
65, 4 65, 4
1939/2001 1939/2001
mo. mo.
7 7
78 1⁄3 78 1⁄3 84 4⁄984 4⁄9 91 1⁄991 1⁄9 97 7⁄9 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 77 1⁄2 83 1⁄3 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 76 2⁄3 82 2⁄982 2⁄9 88 8⁄988 8⁄9 95 5⁄9 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
65, 65, 10
1942/2004 1942/2004
~~mo.~~10
7 1⁄2 7 1⁄2
75 5⁄6 75 5⁄6 81 1⁄981 1⁄9 87 7⁄987 7⁄9 94 4⁄9 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-~~
~~1954/2005-~~
mo. 1943-1954/ 66 66
8 8
75 75
80 80
86 2⁄ 86 2⁄3 2005-2016 3 93 1⁄3 93 1⁄3
100 100
108 108
116 116
124 124
132 132
~~2016~~
1955/2017 1955/2017
66, 2 66, 2
8 8
74 1⁄ 74 1⁄
mo. mo.
6 6
79 1⁄6 79 1⁄6 85 5⁄985 5⁄9 92 2⁄9 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
66, 4 1956/2018 1956/2018
~~66, 4~~mo.
8 8
73 1⁄ 73 1⁄
~~mo.~~
3 3
78 1⁄3 78 1⁄3 84 4⁄984 4⁄9 91 1⁄9 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
66, 6 1957/2019 1957/2019
~~66, 6~~mo.
8 8
72 1⁄ 72 1⁄
~~mo.~~
2 2
77 1⁄2 77 1⁄2 83 1⁄3 83 1⁄3
90 90
96 2⁄3 96 2⁄3
104 104
112 112
120 120
128 128
66, 8 1958/2020 1958/2020
~~66, 8~~mo.
8 8
71 2⁄ 71 2⁄
~~mo.~~
3 3
76 2⁄3 76 2⁄3 82 2⁄982 2⁄9 88 8⁄9 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, 1959/2021 1959/2021
~~66,~~ 10 10
8 8
70 5⁄ 70 5⁄
~~mo.~~
6 6
75 5⁄6 75 5⁄6 81 1⁄981 1⁄9 87 7⁄9 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
mo. 1960 and 1960 and
later later~~/2022~~
67 67
8 8
70 70
75 75
80 80
86 2⁄ 86 2⁄ /2022 or 3 3
93 1⁄3 93 1⁄3
100 100
116 116
124 124
124 124
or later later
Source: CRS. CRS.
Notes: If benefits are claimed before reaching FRA (i.e., early retirement), the PIA is reduced five-ninths of 1% If benefits are claimed before reaching FRA (i.e., early retirement), the PIA is reduced five-ninths of 1%
for each month before FRA, up to 36 months. If the number of months is greater than 36, then the PIA is further 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 1% for each month. The DRC is two-thirds of 1% per month for persons born in 1943 reduced five-twelfths of 1% for each month. The DRC is two-thirds of 1% per month for persons born in 1943
or later. DRCs cannot be earned after attaining age 70. or later. DRCs cannot be earned after attaining age 70.
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link to page link to page 2928 link to page link to page 2928 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 PIA 50% of worker’s PIA
Any age if caring for the child of a retired or Any age if caring for the child of a retired or
disabled worker. The child must be under the age disabled worker. 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 PIA 50% of worker’s 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 to the worker married to the worker
62 is not eligible for spousal benefits even if he or 62 is not eligible 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 or disabled she is caring for the child of a retired 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 PI 100% of worker’s PIAa
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
married to the worker married 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 71.5% of ~~worker’s PI~~Aaworker’s PIAa
and
Must be unmarried (unless the marriage occurred Must be unmarried (unless the marriage occurred
Disabled widow(er)s and Disabled widow(er)s 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 the same rate of receive 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 to the worker married 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 record as a entitled to benefits on the worker’s record as a
PIA) regardless of their age PIA) regardless 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 child. The child must be under deceased worker’s 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)’s benefits. Must not be entitled to widow(er)’s 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 legally adopted child must be his or her natural or legally adopted
child. The 10-year marriage requirement that child. The 10-year marriage requirement 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 child of a retired, disabled, A dependent, unmarried child of a retired, disabled,
50% of worker’s PIA for 50% of worker’s PIA for
or deceased worker. or deceased worker.
child of a retired or child of a retired 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 (2) a ~~ful~~ full-time elementary or secondary student -time elementary 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 whose (3) a disabled person aged 18 or older whose
disability began before age 22. disability began before age 22.
The term The term child refers to a biological child, adopted refers to a biological child, adopted
child, stepchild, or, in some cases, grandchild of the child, stepchild, or, in some 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 since the worker’s death. Must not have married since the worker’s death.
worker’s PIA if one parent worker’s 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 from the worker at the time of the her support from the worker at the time of the
75% of deceased worker’s 75% of deceased worker’s
worker’s death (or, if the worker had a period of worker’s death (or, if the worker 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 more information on auxiliary benefits, see CRS Report R41479, CRS. For more information on auxiliary benefits, see CRS Report R41479, Social Security: Revisiting
Benefits for Spouses and Survivors. .
Notes: The family relationship requirement for entitlement to benefits based on the worker’s record may be The family relationship requirement for entitlement to benefits based on the worker’s record may be
met in alternative ways. For example, the relationship requirement can be met if, under state law as interpreted met in alternative ways. For example, the relationship requirement 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’s personal property if the by the courts of the state, the applicant would be able to inherit a share of the worker’s personal property if the
worker were to die without leaving a worker were to die without leaving a ~~wil~~ will. The table shows the minimum eligibility age for each type of benefit . The table shows the minimum eligibility age for each type of benefit
(i.e., the age at which benefits are first payable on a reduced basis). The maximum family benefit may apply, (i.e., 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 member (excluding the worker) on a proportional basis. In the case reducing the benefit payable to each family member (excluding the worker) on a proportional basis. In the case
of a retired or deceased worker, the maximum family benefit varies from 150% to 188% of the worker’s PIA. In of a retired or deceased worker, the maximum family benefit varies from 150% to 188% of the worker’s PIA. In
the case of a disabled worker, the maximum family benefit is equal to the lesser of 85% of the worker’s AIME or the case of a disabled worker, the maximum family benefit is equal to the lesser of 85% of the worker’s AIME or
150% of the worker’s PIA but no less than 100% of the worker’s PIA. Other benefit adjustments may apply. 150% of the worker’s PIA but no less than 100% of the worker’s PIA. Other benefit adjustments may apply.
a. A worker’s claiming age affects the widow(er) benefit. If a worker was receiving a reduced benefit due to a. A worker’s claiming age affects the widow(er) benefit. If a worker was receiving a reduced benefit due to
claiming benefits claiming benefits before the the ~~ful~~ full retirement age, the widow(er) benefit cannot exceed the worker’s reduced retirement age, the widow(er) benefit cannot exceed the worker’s reduced
benefit amount. Alternatively, if a worker was entitled (or would have been entitled) to a higher benefit due benefit amount. Alternatively, if a worker was entitled (or would have been entitled) to a higher benefit due
to claiming benefits to claiming benefits after the the ~~ful~~ full retirement age, the worker’s PIA—adjusted to take into account the retirement age, the worker’s PIA—adjusted to take into account the
delayed retirement credit—is used to compute the widow(er) benefit, thereby increasing the benefit. delayed retirement credit—is used to compute the widow(er) benefit, thereby increasing the benefit.

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Author Information

Barry F. Huston Barry F. Huston

Analyst Analyst in Social Policy 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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