Social Security retirement benefits are calculated using your highest 35 years of indexed earnings, not just your recent income.
The Social Security Administration (SSA) determines your monthly retirement benefit by first calculating your average indexed monthly earnings (AIME) over your highest 35 years of earnings. These earnings are adjusted for inflation to reflect their value over time. Then, a formula is applied to your AIME to arrive at your primary insurance amount (PIA), which is the benefit you would receive if you start claiming at your full retirement age. Finally, your benefit is adjusted based on the age you choose to begin receiving payments.
This information provides a general overview of how Social Security benefits are calculated and does not constitute financial advice.
Besides delaying, what other actions can help maximize my Social Security benefits?
Beyond delaying your claim, maximizing Social Security benefits involves ensuring your earnings record is accurate and complete, as benefits are based on your highest 35 years of indexed earnings. If you have gaps or errors, contact the Social Security Administration (SSA) to correct them. For those who are married or divorced, understanding spousal and survivor benefits can also increase total household income. Working in a higher-paying job for more years can also significantly boost your average indexed monthly earnings.