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# Your Social Security Benefit in 4 Easy Slides

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Learn the basics of how your monthly Social Security benefit is determined and what you can expect to receive when you retire.

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### Your Social Security Benefit in 4 Easy Slides

1. 1. Your Social Security Benefit in 4 Easy Slides
2. 2. The 2 Keys to Social Security Benefits Your benefits are determined by: • Average earnings in your 35 topearning years • The SSA’s formula for figuring monthly benefits
3. 3. Figuring Your Top-Earning Years You have to adjust early-career years for inflation. • Index factors are provided by SSA and are based on average wages in each year. • Example: Compared to earnings in 2013, earnings in 1991 are worth more than double. Earnings in 1963 are worth 10 times as much. • Once you adjust by factors, take the 35 best years and add up the indexed earnings. Divide by 420 to get a monthly earnings amount.
4. 4. Figure Your Primary Insurance Amount Take monthly earnings amount. Apply “bend points” for PIA formula. For those turning 62 in 2014, formula is: • 90% of the first \$816 in monthly earnings. • Plus 32% of earnings between \$816 and \$4,917. • Plus 15% of earnings above \$4,917. Round down to nearest dime.
5. 5. Figure Your Actual Benefit Primary insurance amount is what you get if you retire at normal retirement age – currently age 66. • If you retire early, calculate how many months early. Reduce primary insurance amount by 5/9 of a percent for each month up to 36 months, then 5/12 of a percent for each additional month. • If retire late, add 2/3 of a percent for each month after normal retirement age. As late as age 70.
6. 6. The Top Stock for 2014