## How to calculate indexed earnings

So what this table shows is that your wages earned in each year you were working have been indexed to compare with the Average Wage Index for your age 62 year, then the top 35 indexed earnings years are totaled and divided by 420 to come up with the Average Indexed Monthly Earnings – your very own AIME. The formula changes from year to year, but for 2017 it works like this: The first $885 of your average indexed monthly earnings is multiplied by 90%. Assuming your AIME is $885 or higher, the result would be $796.50. The amount of your AIME that's greater than $885 and equal to or less than $5,336 is multiplied by 32%. Once you've totaled your 35 highest-earning years, get the average by dividing that total amount by the number of months in 35 years, which is 420. Because you adjusted your earnings for inflation, this average is "indexed." Step 1: Use your earnings history to calculate your Average Indexed Monthly Earnings (AIME). Step 2: Use your AIME to calculate your Primary Insurance Amount (PIA). Step 3: Use your PIA and adjust it for the age you will begin benefits.

## Average Monthly Earnings and Average Indexed Monthly Earnings How do I calculate my Average Indexed Monthly Earnings? When approved for Social Security Disability Insurance, the payments you receive will be based on the

The formula changes from year to year, but for 2017 it works like this: The first $885 of your average indexed monthly earnings is multiplied by 90%. Assuming your AIME is $885 or higher, the result would be $796.50. The amount of your AIME that's greater than $885 and equal to or less than $5,336 is multiplied by 32%. Once you've totaled your 35 highest-earning years, get the average by dividing that total amount by the number of months in 35 years, which is 420. Because you adjusted your earnings for inflation, this average is "indexed." Step 1: Use your earnings history to calculate your Average Indexed Monthly Earnings (AIME). Step 2: Use your AIME to calculate your Primary Insurance Amount (PIA). Step 3: Use your PIA and adjust it for the age you will begin benefits. Use SmartAsset's paycheck calculator to calculate your take home pay per paycheck for both salary and hourly jobs after taking into account federal, state, and local taxes. Overview of Federal Taxes When your employer calculates your take-home pay, it will withhold money for federal income taxes and two federal programs: Social Security and Average Indexed Monthly Earnings (abbreviated as AIME) – this is the average of the highest 35 years of your lifetime earnings, indexed to inflation. Each year’s earnings is indexed based on when you reach age 60, and the highest 35 years are averaged. This average is divided by 12, to result in the monthly average. Average Monthly Earnings and Average Indexed Monthly Earnings How do I calculate my Average Indexed Monthly Earnings? When approved for Social Security Disability Insurance, the payments you receive will be based on the Once you have your indexing factors written down, you simply need to multiply your actual earnings by your indexing factor. This will give you your indexed earnings. Now, all you have to do is extract the highest 35 years of indexed earnings. NOTE: If you don’t have 35 years, and don’t plan to continue working, you’ll have to use zeros.

### Remember that the higher your earnings were or are, the higher the social security earnings you will get. Calculate your Monthly Social Security Earnings. It is essential to know how to calculate benefits with regards to the average indexed monthly earnings. You will need to provide all details in relation to your sources of income such as

20 Aug 2019 The calculation of social security can sound complicated, but in general All of these indexed annual earnings are accumulated and then they Steps one and two of the benefit calculation involve indexing individual earnings and key parameters of the benefit formula to a measure of economy-wide 13 Dec 2018 Average indexed earnings in each of the three brackets are multiplied by three corresponding factors to determine the PIA: 90 percent, 32 percent Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then the Social Security

### 5 Aug 2019 How Social Security Benefits Are Calculated. Your Social Security benefits are based on your average indexed monthly earnings (AIME) during

12 Dec 2018 Social Security uses all of your career earnings to help determine your by 12 to calculate your average indexed monthly earnings, or AIME. 3 Oct 2018 Average Indexed Monthly Earnings. To calculate your AIME, the administration takes each year's income throughout your working life and 20 Oct 2016 Social Security indexes each year of your wages by the general growth highest 35 years of these indexed earnings to calculate your average Nominal earnings amounts are indexed by the social security average annual earnings index up to age 60, as specified in the AIME calculation rules, and the 6 Jan 2016 Calculating Average Indexed Monthly Earnings (AIME). The caveat to calculating an average of a worker's highest 35 years of historical

## Specifically, it’s based on your “average indexed monthly earnings” (AIME). Calculating your AIME is a five-step process. Make a year-by-year list of your earnings, excluding any earnings for each year that were in excess of the maximum amount subject to Social Security tax. Adjust your earnings from prior years to today’s dollars.

12 Dec 2018 Social Security uses all of your career earnings to help determine your by 12 to calculate your average indexed monthly earnings, or AIME. 3 Oct 2018 Average Indexed Monthly Earnings. To calculate your AIME, the administration takes each year's income throughout your working life and 20 Oct 2016 Social Security indexes each year of your wages by the general growth highest 35 years of these indexed earnings to calculate your average Nominal earnings amounts are indexed by the social security average annual earnings index up to age 60, as specified in the AIME calculation rules, and the 6 Jan 2016 Calculating Average Indexed Monthly Earnings (AIME). The caveat to calculating an average of a worker's highest 35 years of historical

AIME Calculation 1. Start with a list of your earnings each year. Earnings history is shown on a Social Security statement, 2. Adjust each year of earnings for inflation. Social Security uses a two-step process called wage indexing 3. Use the highest 35 years of indexed earnings to calculate Indexing brings nominal earnings up to near-current wage levels. For each case, the table shows columns of earnings before and after indexing. Between these columns is a column showing the indexing factors. A factor will always equal one for the year in which the person attains age 60 and all later years. To calculate your average indexed monthly earnings divide the sum of your 35 highest years of indexed earnings (up to age 60) by the total by the number of months worked in those years. More specifically, to determine your average indexed monthly earnings, Social Security averages your earning from The first step in the Social Security formula is determining your average indexed monthly earnings, or AIME. To calculate your AIME, the SSA takes each year of earnings throughout your working lifetime, up to the Social Security taxable maximum. Then, each year's earnings are adjusted for inflation, or "indexed.".