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Your Retirement Benefit: How It is Figured
As you make plans for retirement, you will more than likely ask, “How much will I get from Social Security. To find out, you can use the Retirement Estimator at socialsecurity.gov/estimator. Workers who are age 18 and older also can go online, create their personal account, and request their Social Security Statement. You can review this state- ment by going to www.socialsecuirty.gov/my statement. Many people wonder how their benefits are figured. Social Security benefits are based on your lifetime earnings and your actual earnings are adjusted or “indexed” to account for changes in average wages since the year the earnings were received. Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most. A formula is then applied to these earnings and Social Security arrives at your basic benefit or “primary insurance amount” (PIA). This is how much you would receive at your full retirement age—65 or older, depending on your date of birth.
The following worksheet may be used to estimate your retirement benefit if you were born in 1951. It is only an estimate so for specific information, talk with a Social Security representative. This worksheet shows how to estimate social security monthly retirement benefits you would be eligible for at age 62 if you were born in 1951 and became 62 in 2013. It also allows you to estimate what you would receive at 66, your full retirement age, excluding any cost-of-living adjustments for which you may be eligible. If you continue working past 62, your additional earnings could increase your benefit. People born after 1951 can use this worksheet but their actual benefit may be higher due to additional earnings and benefit increase. If you were born prior to 1951, please go online (info taken from www.socialsecurity.gov).
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