These adjustments are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. This safety net replaces a larger share of income for lower-wage workers.
Social Security Bend Points Calculation and Formula Breakdown
If you claim at your Full Retirement Age (FRA), you receive exactly 100% of your PIA. This number is the foundation of your monthly retirement payment.
The Social Security Administration looks at your highest 35 years of income, adjusting each year for wage growth using the Average Wage Index. Indexing to Earnings and Averaging Once the 35 years are selected, the agency calculates your Average Indexed Monthly Earnings, or AIME.
Social Security Bend Points Calculation and PIA Formula
Claiming early, typically at 62, reduces the check permanently to account for a longer payment period. The second tier applies a 32% multiplier to the income between the first and second bend points.
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