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How to Calculate Social Security Benefits - A Step by Step Guide

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How to Calculate Social Security Benefits - A Step by Step Guide
How to Calculate Your Social Security Benefits

How to Calculate Your Social Security Benefits

The amount of Social Security benefits you receive depends on the following factors:

  • How long you work
  • How much you make each year
  • Inflation
  • What age you begin taking your benefits

In this step-by-step series, we’ll show you how these factors affect your benefit amount. There is a three step process to use to calculate the amount of Social Security benefits you will receive.

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

Let's take a detailed look at Step 1: How to Calculate Your Average Indexed Monthly Earnings.

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