# What is the index factor for social security?

## What is the index factor for social security?

Eligibility and indexing An individual’s earnings are always indexed to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2021, the person’s earnings would be indexed to the average wage index for 2019 (54,099.99).

## How is Social Security AIME calculated?

After we determine the number of years, we choose those years with the highest indexed earnings, sum such indexed earnings, and divide the total amount by the total number of months in those years. We then round the resulting average amount down to the next lower dollar amount. The result is the AIME.

How is AIME score calculated?

Once Social Security separates out your highest-35 indexed-earning years (including any zeros for years without any taxable income), it sums the 35 years of earnings and then divides the total by 420, which is the number of months in 35 years. Voila: This is your AIME.

How is the AIME calculated for Social Security?

Once Social Security separates out your highest-35 indexed-earning years (including any zeros for years without any taxable income), it sums the 35 years of earnings and then divides the total by 420, which is the number of months in 35 years. Voila: This is your AIME. More to the story…

### How is average indexed monthly earnings ( AIME ) calculated?

Social Security: Average Indexed Monthly Earnings (AIME) Explanation. Errr… SSA.). The AIME is calculated by taking the highest-earning (by index) 35 years of your working life while covered by Social Security, and then computing an average monthly amount based upon those indexed amounts.

### What is the index factor for Social Security at age 60?

To adjust your historical income using 2016’s AWI, divide your age 60 AWI, or \$48,642.15, by the AWI for each year you had earnings. This results in an indexing factor for each year. Then, multiply your historical earnings by every year’s corresponding index factor to adjust them into 2016 dollars.

How are indexed earnings calculated for Social Security?

Below the indexed earnings are the sums for the highest 35 years of indexed earnings and the corresponding average monthly amounts of such earnings. (The average is the result of dividing the sum of the 35 highest amounts by the number of months in 35 years.) Such an average is called an “average indexed monthly earnings” (AIME).