Social Security figures your benefit in three steps: it adjusts your past earnings for wage growth and averages your highest 35 years into a monthly figure called AIME, then runs that figure through a formula with two "bend points" to produce your full benefit, called PIA. For people turning 62 in 2027, the formula pays 90% of the first $1,340 of AIME, 32% of the amount up to $8,077, and 15% of anything above. Your claiming age then raises or lowers that amount.
Key takeaways
- AIME (average indexed monthly earnings) = your highest 35 years of indexed earnings, totaled and divided by 420 months.
- PIA (primary insurance amount) is your benefit at full retirement age, calculated from AIME using bend points.
- 2027 bend points (for people first eligible in 2027): $1,340 and $8,077. The 2026 figures were $1,286 and $7,749.
- Any of the 35 years without earnings counts as zero, which pulls your average down.
- The formula replaces a larger share of income for lower earners than for higher earners.
Step 1: Your earnings record and work credits
Everything starts with the earnings reported under your Social Security number. Each year, wages from an employer and net earnings from self-employment are recorded, up to an annual cap called the taxable maximum. In 2027 that cap is $192,300, up from $184,500 in 2026. Earnings above the cap are not taxed for Social Security and do not count toward benefits.
To qualify for retirement benefits at all, you need 40 work credits, which typically means about 10 years of work. In 2027, you earn one credit for every $1,970 of covered earnings, and there is a yearly cap on how many credits you can earn. Credits determine whether you qualify. They do not set how much you receive; that comes from your earnings.
Step 2: Indexing and AIME
A dollar earned in 1990 does not reflect the same standard of living as a dollar earned today. To put all your years on equal footing, Social Security "indexes" earnings from earlier years to account for how much average wages across the economy have grown since. Earnings from the last few years before you become eligible count at face value.
Next, Social Security picks your 35 highest years of indexed earnings, adds them up, and divides by 420, the number of months in 35 years. The result, rounded down to the dollar, is your average indexed monthly earnings, or AIME.
Two practical points follow from this:
- Missing years count as zero. If you worked 30 years, five zeros go into the average. Someone with $2,100,000 of indexed earnings over 30 years would have an AIME of $5,000 ($2,100,000 ÷ 420). Five more years at $60,000 each would add $300,000 and lift the AIME to about $5,714.
- Working longer can replace a low year. If you keep working in your 60s, a new high-earning year can push an earlier low year out of your top 35.
Enter your earnings history to estimate your AIME, PIA and benefit at different claiming ages.
Use the Social Security Benefit CalculatorStep 3: The PIA formula and bend points
Your primary insurance amount is calculated by splitting your AIME into three slices and applying a different percentage to each. The dividing lines are the bend points. They are set by the year you turn 62, and they rise each year with average wages.
| Portion of AIME | Percentage paid | First eligible in 2026 | First eligible in 2027 |
|---|---|---|---|
| Up to the first bend point | 90% | First $1,286 | First $1,340 |
| Between the bend points | 32% | $1,286 to $7,749 | $1,340 to $8,077 |
| Above the second bend point | 15% | Over $7,749 | Over $8,077 |
Because the percentages drop as AIME rises, the formula is deliberately tilted. A lower earner gets back a larger share of past earnings than a higher earner, although the higher earner still gets the larger check. Your bend points are locked in at 62; after that, your benefit grows through cost-of-living adjustments.
Worked examples for someone turning 62 in 2027
These examples use the 2027 bend points. The result is rounded down to the dime, as Social Security does.
Example 1: AIME of $3,000
- 90% of the first $1,340 = $1,206.00
- 32% of the next $1,660 ($3,000 − $1,340) = $531.20
- Nothing above the second bend point
- PIA = $1,206.00 + $531.20 = $1,737.20
That is about 58% of the $3,000 average.
Example 2: AIME of $6,000
- 90% of the first $1,340 = $1,206.00
- 32% of the next $4,660 ($6,000 − $1,340) = $1,491.20
- PIA = $1,206.00 + $1,491.20 = $2,697.20
That is about 45% of the average.
Example 3: AIME of $10,000
- 90% of the first $1,340 = $1,206.00
- 32% of $6,737 ($8,077 − $1,340) = $2,155.84
- 15% of the $1,923 above $8,077 = $288.45
- Total = $3,650.29, rounded down to $3,650.20
That is about 37% of the average.
| AIME | PIA at full retirement age | Share of AIME replaced |
|---|---|---|
| $3,000 | $1,737.20 | about 58% |
| $6,000 | $2,697.20 | about 45% |
| $10,000 | $3,650.20 | about 37% |
The maximum benefit at full retirement age in 2027 is $4,188 a month, which requires earnings at or above the taxable maximum for most of a 35-year career.
Step 4: Claiming age adjusts your PIA
Your PIA is what you receive if you claim exactly at full retirement age. For anyone born in 1960 or later, that is 67. Claiming earlier or later changes the monthly amount permanently:
- Early: 5/9 of 1% less for each of the first 36 months before full retirement age, and 5/12 of 1% less for each month beyond. At 62 with an FRA of 67, you receive 70% of PIA.
- Late: 2/3 of 1% more for each month after full retirement age, or 8% a year, up to 70. At 70 you receive 124% of PIA.
Using Example 2, a PIA of $2,697.20 would be about $1,888 a month at 62 and about $3,344 at 70. Our break-even guide to claiming at 62, 67 or 70 shows how to weigh those choices, and you can confirm your full retirement age with the full retirement age calculator.
Other things that affect your check
Cost-of-living adjustments
Starting with the year you turn 62, your PIA is increased by each year's cost-of-living adjustment, even if you have not claimed yet. For 2027 the increase is 3.6%. Our 2027 COLA guide covers what that means in dollars.
Spousal and survivor benefits
Your PIA also sets what family members can receive on your record. A spouse can get up to 50% of your PIA at the spouse's own full retirement age, and a surviving spouse can receive up to 100% of your benefit. See the spousal benefits guide and the spousal benefit calculator for details.
Public pensions
The Social Security Fairness Act, signed on January 5, 2025, repealed the Windfall Elimination Provision and the Government Pension Offset. Those rules used to reduce benefits for many people with pensions from jobs not covered by Social Security, such as some teachers and public employees. They no longer apply.
Medicare and taxes
Your PIA is the gross amount. Medicare Part B premiums are often deducted from the payment, and part of your benefit may be subject to income tax depending on your other income. Our explainer on whether Social Security is taxable walks through that test.
How to check your own numbers
The most reliable way to see your estimate is your Social Security statement, available through a my Social Security account. Review the earnings history carefully. A missing or understated year directly lowers your AIME, so if you spot an error, gather pay stubs or tax records and ask Social Security to correct it. The earlier you catch mistakes, the easier they are to fix.
Frequently asked questions
What is the difference between AIME and PIA?
AIME is your average monthly earnings over your highest 35 indexed years. PIA is the monthly benefit the formula produces from that average, payable if you claim at full retirement age.
What are the bend points for 2027?
For people who turn 62 in 2027, the bend points are $1,340 and $8,077. The formula pays 90% of AIME up to $1,340, 32% from $1,340 to $8,077, and 15% above $8,077.
What happens if I worked fewer than 35 years?
The missing years are counted as zero in the 35-year average, which lowers your AIME and your benefit. Adding more working years, even at modest pay, replaces those zeros.
Do my bend points change after I turn 62?
No. Your bend points are fixed by the year you first become eligible, usually the year you turn 62. After that, your benefit rises through cost-of-living adjustments.
What is the maximum Social Security benefit in 2027?
The maximum benefit for someone claiming at full retirement age in 2027 is $4,188 a month. Claiming later can produce a higher amount; claiming earlier produces a lower one.
Sources
This guide is for general education and is not financial, tax or legal advice. Rules and amounts can change; confirm details with the Social Security Administration, the IRS or Medicare. Spotted an error? Let us know.