1. What is Social Security Retirement Benefit?

The Social Security retirement benefit is a monthly payment you receive after retiring based on your lifetime earnings. The formula uses your highest 35 years of earnings to calculate your benefit amount.

2. How Does the Calculator Work?

The calculator uses the Social Security benefit formula:

Where:

• First \$1,174 — 90% of this amount is included in benefit
• Next \$5,958 — 32% of this amount is included
• Any amount above \$7,132 — 15% is included

Explanation: The formula uses progressive brackets where higher earnings receive lower replacement rates, providing more benefits relative to contributions for lower earners.

3. Importance of Benefit Calculation

Details: Understanding your estimated benefit helps with retirement planning, determining when to claim benefits, and making informed decisions about supplemental retirement savings.

4. Using the Calculator

Tips: Enter your average indexed monthly earnings (AIME) in USD. This should be based on your highest 35 years of earnings adjusted for inflation.

5. Frequently Asked Questions (FAQ)

Q1: What is AIME?
A: Average Indexed Monthly Earnings is calculated by taking your highest 35 years of earnings, adjusting for wage inflation, and averaging them.

Q2: When can I start receiving benefits?
A: You can start as early as age 62 (with reduced benefits) or wait until full retirement age (66-67 depending on birth year) for full benefits.

Q3: How accurate is this calculator?
A: This provides a basic estimate. Your actual benefit may vary based on your exact earnings history and claiming age.

Q4: Are benefits taxable?
A: Depending on your total income, up to 85% of your benefits may be subject to federal income tax.

Q5: Can I work while receiving benefits?
A: Yes, but if you're below full retirement age, your benefits may be reduced if your earnings exceed certain limits.