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  How are my retirement benefits calculated?
  How are my retirement benefits calculated?

Are my retirement benefits figured on my last five years of earnings?


Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or "primary insurance amount" (PIA). This is the amount you would receive at your full retirement age, for most people, age 65. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. For more information, see The Full Retirement Age is Increasing.

As you can see from the above, the benefit computation is complex and there are no simple tables that we can present that will tell you how much you will receive. However, there are several ways you can determine an estimate of your retirement benefits:

  1. Use our new Retirement Estimator which produces estimates that are based on your actual Social Security earnings record.
  2. Request a Social Security Statement. Make your request over the Internet and we will mail you a detailed report of your lifetime earnings and an estimate of retirement, disability and dependent benefits.
  3. Compute your own benefit estimate using a program that you can download for your PC. A version for the Mac is available.
  4. Use our online calculator and enter your own data.
  5. See examples of how benefits are computed at Benefit Calculation Examples.
  6. See our publication, Your Retirement Benefit: How It Is Figured.

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