Social Security Calculator Formula & How It Works
PIA = 90% of first $1,174 of AIME + 32% of next $5,904 + 15% of remainder
- AIME = Average Indexed Monthly Earnings (based on 35 highest earning years)
- PIA = Primary Insurance Amount at Full Retirement Age (FRA)
- Early claiming (62): benefit reduced 25–30% permanently
- Late claiming (70): benefit increased 8%/year above FRA
Social Security benefit is calculated from your AIME using a progressive formula called 'bend points.' The FRA is 67 for those born 1960+. Claiming at 62 permanently reduces your benefit by ~30%; waiting to 70 permanently increases it by 32% over FRA. The breakeven point between early and late claiming is typically ages 78–82.