You know how much tax is taken from your pay as compulsory contributions for your social security earnings. You see the figure in your payslip every payday. If you’ve been working for years or even decades, these seemingly small amounts have likely already piled up into a considerable sum. However, you might not have a clear idea of how much you could be getting when you retire.

If you want to know more about how to estimate the amount you’ll get, you can always try this full guide. But, in the meantime, here’s a brief discussion on how much social security pay you’ll likely receive upon retiring.

How To Find Out The Amount Of Your Social Security Income

There are four ways in which you can find out approximately how much you’ll be receiving for your monthly payout when you retire. Of course, there are still some uncertainties and unknown variables regarding what might happen in the future. It might even be presumptuous to assume that the payout of social security benefits is guaranteed. It’s not. It’s possible that there may be changes in the system and payouts in the future, or that your claim may be denied for certain reasons.

However, assuming that you’ll be able to receive your social security payout, there are four ways of finding out how much you’ll be getting monthly when you retire:

  1. Ask for the record of your social security earnings from the local Social Security office in your area. Along with that, they can also give you an estimate of the retirement benefits you’ll be receiving.
  2. Use the online calculator on the Social Security website. With it, you can compute your estimated retirement benefits based on the record of your social security earnings.
  3. Wait for the Social Security Administration (SSA) to give you their official computation. This may be the easiest way, but it’s not ideal if you’d like to have an estimate right away.
  4. Compute for the estimate yourself using the same calculations and formulas the SSA uses.

DIY Benefits Calculation

Step 1: Compute For Your Average Indexed Monthly Earnings (AIME)

The first step in getting the estimated amount of your social security pension is to compute for your AIME. To do this, you should have a copy of the statement that contains the specific amounts of your Social Security earnings for each year. The Social Security statement usually contains a table of these figures.

The leftmost column lists the years during which the contributions were made. Next to it is the column of nominal earnings. This lists your actual social security contributions for each year. However, this isn’t what they use to compute for the amounts you’re going to receive in retirement. They adjust the nominal earnings by using an indexing factor.

The indexing factor can be found in the National Average Wage Index (NAWI), which is prepared by the SSA. The purpose of multiplying your yearly contributions by the indexing factor is to adjust the values for the effects of wage inflation. This makes the values in your nominal earnings column more realistic compared to current values. The SSA publishes a new set of indexing factors every year.

The indexing factors used to compute your retirement benefits are on the table that the SSA publishes on the year you turn 60 years old. The earnings you contribute after 60 years old can still increase your retirement benefits, but they won’t be adjusted anymore for future wage inflations since the indexing factor to be assigned to them is 1.000. In short, your earnings after you turn 60 won’t go up even if wages go up, because the multiplier 1.000 keeps it the same. Thus, increasing your earnings before you’re 60 can help maximize your social security.

Sample Table of Earnings

Year Nominal Earnings Indexing Factor Indexed Earnings
2011 USD$106,800 1.1317 USD$120,865
2012 USD$110,100 1.0975 USD$120,834
2013 USD$113,700 1.0836 USD$123,205
2014 USD$117,000 1.0465 USD$122,440
2015 USD$118,500 1.0113 USD$119,839
2016 USD$118,500 1.0000 USD$118,500
2017 USD$127,200 1.0000 USD$127,200

You may then compute for the AIME after you’ve computed the indexed earnings for all the years by multiplying the nominal earnings of each year with the index factor for that specific year. For the AIME, you should only factor in the indexed earnings from the 35 highest income years even if you’ve worked for 40 years or more.

To get the AIME, add the indexed earnings from the 35 highest income years and then divide the sum by 35. The quotient would be the AIME or the average of the indexed earnings of the 35 highest income years. If you want to compute the monthly amount, you can either divide the sum of all the indexed earnings by 420 or divide the annual AIME by 12. For example, if the indexed earnings of an employee result in a total of USD$4,769,577 for all 35 highest income years, the monthly AIME would come up to USD$11,356.

Step 2: Compute For Primary Insurance Amount


Once you have your AIME, you can use it to get a primary insurance amount (PIA). This is the baseline or estimates the primary amount of what you’re going to receive in benefits when you retire. You can compute for your PIA by multiplying your AIME through bend points. The SSA has already set the first and second bend points for 2024. The first is USD$1,024, and the second is USD$6,172.

Here’s a sample computation of how to apply bend points to your AIME to determine your PIA.

  • Multiply 90% by the first bend point (USD$1,024) of the person’s AIME (0.90 × USD$1,024). The product would be USD$921.60.
  • Get the difference between the first and second bend points (USD$6,172 – USD$1,024 = USD$5,148). Multiply the difference by 32% (0.32 × USD$5,148). The product would be USD$1,647.36.
  • Subtract the second bend point from the monthly AIME (USD$11,356 – USD$6,172 = USD$5,184). Multiply this difference by 15% (0.15 × USD$5,184). The product would be USD$777.60.

You now have all three products you need to arrive at your PIA. You can compute for the PIA by getting the sum of these (USD$921.60 + USD$1,647.36 + USD$777.60), which would be USD$3,346.56. This is the primary insurance amount, which is the preliminary estimate of how much social security pay the person in this calculation would receive each month.

Keep in mind that the three multipliers are all fixed by law; they don’t change every year. The bend points are set by the SSA each year based on an inflation index, but only up until the age of 62 on your earnings table.


The basic idea of social security is that workers can continue to increase what they will receive in retirement for as long as they keep on contributing to their social security earnings. Some people like to plan ahead or at least have an idea of what they’ll be getting in retirement, so they look for ways to determine the amount even if they’re years away from retiring. If you’re one such person, you can use the information given in this article to determine the amount of your social security payout.