November 26, 2022


Its all about the Health

Social Security Calculator – When to Start Taking Social Security

3 min read

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Full Retirement Age

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Since Social Security is an essential program of the government for qualified people, it is also crucial to understand how your benefits are calculated using a Social Security calculator. It helps you know the income you can expect from it and make sure that no disputes may arise when it is time for you to claim it.

The organization has a variety of Social Security calculators, and each is based on the benefit that you are eligible to obtain. Once you have determined if you are qualified for the program, you can utilize the retirement age calculator to check the expected payment that you will receive easily.

As per provision of 1983 Social Security Amendments, people who were born in 1938 and later can receive the full retirement benefit when they reach 67. On the other hand, the earliest age for you to get the retirement benefits is at 62. In this case, you will receive 80% of the monthly benefit since you will get benefits for an additional 36 months.

However, if you found that you are not eligible to gain retirement benefits due to your work record, you may file for a spousal benefit in which the payment is based on your spouse’s work record. Then, list all the earnings you had every year including each year’s taxable maximum. You can get this information from your Social Security statement.

You can then use the worksheet of index factors published by the Social Security Administration (SSA). You can also use a Social Security calculator. This document is where your annual income figures were indexed for inflation. Multiply your earnings to the index factor for that specific year you work so that you’ll get the inflation-indexed earnings. You have to do the same process in every year you worked.

Take note that the Social Security benefit should come from the 35 years when you earned most. However, if you worked lower than that period, you need to fill in the missing spots with zero. Then, calculate your average indexed monthly earnings, or also called AIME. To do it, add up all 35 of your highest inflation-indexed income figures and divide the sum by 35. The result will give you the annual average, then, divide it again by 12 to get the AIME.

You then need to determine your primary insurance amount, also called PIA, using the following formula that was updated in 2018:

90% = first $895 of AIME

32% of AIME above $895; less than or equal to $5,397

15% of AIME greater than $5,397

*The sum that you will get using this formula will be your PIA.

It is crucial to take note that individuals who decide to claim their benefit before reaching the actual full retirement age will get a permanently reduced Social Security benefit. On the other hand, the recipients who prefer to claim the benefits beyond the suggested full retirement age can avail a permanently higher benefit. Americans have options to claim the benefits between age 62 through 70, and their choice will certainly affect the expected sum of money that they will receive. Hopefully you will find this Social Security calculator helpful.

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