Workers with Maximum-Taxable Earnings

Automatic Determinations

Benefit Computation

Primary Insurance Amount

Wage-indexed amounts

Social Security benefits depend on earnings
The amount of a person's retirement benefit depends primarily on his or her lifetime earnings. We index such earnings (that is, convert past earnings to approximately their equivalent values near the time of the person's retirement) using the national average wage index. See how we use earnings to compute a retirement benefit amount.

Benefit Examples For Workers With Maximum-Taxable Earnings
The initial benefit amounts shown in the table below assume retirement in January of the stated year, with maximum-taxable earnings since age 22. Benefits in 2012 reflect subsequent automatic benefit increases (if any). The table shows Average Indexed Monthly Earnings (AIME)—an amount that summarizes a person's earnings—and the corresponding monthly benefit amounts. Retirement at age 70 produces the highest ratio of retirement benefit to AIME.

**Worker with steady earnings at the maximum level since age 22**
Retirement in Jan.	Retirement at age 62^1/			Retirement at age 65^2/			Retirement at age 70^3/
	AIME	Monthly benefits		AIME	Monthly benefits		AIME	Monthly benefits
	AIME	At age 62	In 2012	AIME	At age 65	In 2012	AIME	At age 70	In 2012
1987	$2,205	$666	$1,367	$2,009	$789	$1,618	$1,725	$1,056	$2,167
1988	2,311	691	1,361	2,139	838	1,650	1,859	1,080	2,126
1989	2,490	739	1,399	2,287	899	1,702	2,000	1,063	2,013
1990	2,648	780	1,410	2,417	975	1,762	2,154	1,085	1,961
1991	2,792	815	1,399	2,531	1,022	1,754	2,332	1,163	1,996
1992	2,978	860	1,422	2,716	1,088	1,801	2,470	1,231	2,037
1993	3,154	899	1,445	2,878	1,128	1,813	2,605	1,289	2,070
1994	3,384	954	1,494	3,024	1,147	1,796	2,758	1,358	2,126
1995	3,493	972	1,481	3,219	1,199	1,826	2,896	1,474	2,244
1996	3,657	1,006	1,494	3,402	1,248	1,854	3,012	1,501	2,228
1997	3,877	1,056	1,524	3,634	1,326	1,913	3,189	1,609	2,322
1998	4,144	1,117	1,579	3,750	1,342	1,897	3,348	1,648	2,328
1999	4,463	1,191	1,662	3,926	1,373	1,915	3,496	1,684	2,349
2000	4,775	1,248	1,698	4,161	1,435	1,953	3,707	1,752	2,385
2001	5,126	1,314	1,728	4,440	1,538	2,022	3,912	1,879	2,471
2002	5,499	1,382	1,772	4,770	1,660	2,128	4,165	1,988	2,548
2003	5,729	1,412	1,784	5,099	1,721	2,176	4,321	2,045	2,585
2004	5,892	1,422	1,761	5,457	1,784	2,209	4,532	2,111	2,614
2005	6,137	1,452	1,751	5,827	1,874	2,259	4,786	2,252	2,715
2006	6,515	1,530	1,773	6,058	1,961	2,272	5,072	2,420	2,803
2007	6,852	1,598	1,791	6,229	1,998	2,240	5,406	2,672	2,996
2008	7,260	1,682	1,843	6,479	2,030	2,225	5,733	2,794	3,062
2009	7,685	1,769	1,833	6,861	2,172	2,250	6,090	3,054	3,164
2010	7,949	1,820	1,885	7,189	2,191	2,270	6,450	3,119	3,231
2011	7,928	1,803	1,868	7,579	2,249	2,330	6,683	3,193	3,307
2012	8,199	1,855	1,855	7,973	2,310	2,310	6,852	3,266	3,266

¹ Retirement at age 62 is assumed here to be at exact age 62 and 1 month. Such early retirement results in a reduced monthly benefit.
² Retirement at age 65 is assumed to be at exact age 65 and 0 months. For retirement in 2003 and later, the monthly benefit is reduced for early retirement. (For people born before 1938, age 65 is the normal retirement age. Normal retirement age will gradually increase to age 67.)
³ Retirement at age 70 maximizes the effect of delayed retirement credits.

Note: Initial monthly benefits paid at ages 65 and 70 in 2000-2001 were slightly lower than the amounts shown above because such initial benefits were partially based on a cost-of-living adjustment (COLA) for December 1999 that was originally determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law 106-554, however, this COLA is effectively now 2.5 percent, and the above figures reflect the benefit change required by this legislation.


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