How Social Security is calculated from your 35 highest years

Rates and limits checked on October 24, 2026.

Social Security adjusts each year of your covered pay to wage levels at age 60, keeps your 35 highest years and divides their total by 420 to get your average indexed monthly earnings (AIME). A three-tier formula turns that average into your benefit at full retirement age, and the age you claim then raises or lowers that amount.

Every figure below follows the worker in the Social Security Administration’s own 2027 example. That worker was born in 1965, had covered earnings in each year from 1987 through 2026, and turns 62 in 2027.

The four steps from paycheck to monthly check

Eligibility comes before any arithmetic. You need 40 credits, roughly 10 years of covered work, and how the 40 work credits are earned covers that test. Once you have them, SSA runs four steps in this order:

1. Index each past year of earnings to average US wages in the year you turn 60.
2. Rank the indexed years and keep the highest 35, counting any missing year as zero.
3. Add those 35 years and divide by 420 months, rounding down to the dollar. The result is your AIME.
4. Apply the benefit formula: 90%, 32% and 15% of AIME across two dollar thresholds called bend points. That gives your primary insurance amount (PIA), the monthly benefit at full retirement age.

Claiming age comes after all four steps, as a separate percentage applied to the PIA.

Why a $17,229 paycheck from 1987 counts as $68,069

$17,229 is what this worker earned in 1987, the first year on the record. In the benefit calculation that year counts as $68,069, because SSA multiplies it by an indexing factor of 3.9508.

The factor comes from one division. SSA takes the national average wage index for the year the worker turned 60 (2025, at $72,800.33) and divides it by the index for 1987 ($18,426.51). Every earlier year gets its own factor the same way, and SSA’s Office of the Chief Actuary prints all 40 of them in its indexed earnings table for workers retiring in 2027.

Age 60 anchors everything. The factor for that year is exactly 1.0000, and so is the factor for every later year. Pay earned at 60 or after enters the average at face value, while pay from your twenties is scaled up.

Indexing follows average wages rather than consumer prices. To see what price inflation alone did to a 1987 dollar, the inflation calculator runs that comparison, and its answer can be set beside the 3.9508 factor.

For anyone who turns 60 in a different year, every factor changes, because the reference year moves with the birthday.

SSA keeps your top 35 years and divides by 420

Forty years went into this worker’s record, and 35 came out. The five dropped were 1987 through 1991, the five smallest after indexing.

Source: SSA, Benefit Calculation Examples for Workers Retiring in 2027. Both workers have covered earnings from 1987 through 2026.

Case A’s AIME works out to $2,550,252 ÷ 420 = $6,072.03, rounded down to $6,072.

SSA’s table doesn’t print the figure that matters most if you’re weighing another year of work: the lowest year still counted. For Case A it’s 1992, at $69,142 of indexed earnings. The best year that missed the cut, 1991, came to $68,927. That $215 gap is worth about 16 cents a month once it’s spread over 420 months and run through the 32% part of the formula.

Your final five years get no extra weight in this ranking, and neither does your highest-paid job. A record with fewer than 35 years fills the empty slots with zeros while the divisor stays at 420. What each zero year costs prices that gap in dollars per month.

2027 bend points: $1,340 and $8,077

Turning 62 sets your formula. For anyone turning 62 in 2027, the bend points are $1,340 and $8,077.

Source: SSA, Benefit Formula Bend Points.

Your PIA is 90% of AIME up to the first bend point, plus 32% of the AIME between the two, plus 15% of any AIME above the second, cut to the next lower dime. The dollar thresholds rise most years with the national average wage index, and how bend points move each year shows the longer pattern.

Example: Case A’s AIME of $6,072 sits between the two bend points.

• Ninety percent of the first $1,340 is $1,206.00.
• The next slice runs from $1,340 to $6,072, which is $4,732, and 32% of it is $1,514.24.
• Nothing reaches the 15% tier.

The total, $2,720.24, becomes a PIA of $2,720.20 (SSA’s PIA calculation for 2027).

The formula stays locked to the year of eligibility, even for someone who claims years later. Case B retires at 67 in 2027 but turned 62 in 2022, so the 2022 bend points of $1,024 and $6,172 apply to that $11,843 AIME. The formula gives $3,419.61, and the cost-of-living adjustments for 2022 through 2026 raise it to a PIA of $4,187.40.

Does claiming at 62, 67 or 70 change the formula?

No. Case A’s PIA stays at $2,720.20 whatever the claiming age. What changes is the share of it paid each month.

Source: the age 62 amount is SSA’s own figure in its 2027 PIA example. The 67 and 70 amounts apply SSA’s round-down rule and delayed retirement credits to the same PIA, in 2027 dollars.

With a full retirement age of 67, a claim at 62 means 60 months of early reduction. Past 67, delayed retirement credits add 8% a year for anyone born in 1943 or later and stop at 70, so three years of waiting gives 124%. Cost-of-living adjustments in the years between 62 and the claim would raise both later amounts.

Full retirement age depends on birth year, and full retirement age by birth year lists it. Each end of the range has its own trade-offs, and what claiming at 62 costs covers the early side.

The later side is in the rules for delaying Social Security to 70. To rerun the table above, open the Social Security benefit calculator, choose the PIA input, enter $2,720.20 with a full retirement age of 67, and set the COLA to 0%.

Which age fits your household depends on savings and other income, and that is a question for a fee-only financial planner. Ask: “With my PIA and my other income, how much savings would I draw down for each year I delay, and at what age does the larger check catch up?”

What one more year of work adds to the check

If a new year’s earnings beat $69,142, that year replaces 1992 in Case A’s top 35. If they don’t, the benefit stays where it was. Earnings from age 60 on aren’t indexed, so a new year counts at face value.

Example: suppose Case A keeps working through 2027.

Source: calculated from SSA’s 2027 example record and the 2027 bend points.

A $50,000 year adds nothing here, because every one of the 35 years already counted is above $69,000.

You don’t need to apply for an increase. Each year SSA reviews the records of beneficiaries who had wages reported for the previous year. If the latest year is among your highest, SSA recalculates the benefit, with the increase starting in January of the year after the earnings (SSA on working while receiving benefits). Before full retirement age, wages above the yearly limit can also cause part of a benefit to be withheld, and how the earnings limit works covers that rule.

The benefit formula is only one side of a later stop date. The retirement calculator shows the savings side: one more year of contributions and one less year of withdrawals.

Pull your earnings record and check each year

Sign in to your my Social Security account and download your earnings record before running any of this math on your own numbers. The ranking uses only the earnings SSA has on file, so a year missing from the record counts as zero even if you worked it.

1. Download the earnings record from your my Social Security account.
2. Compare each year with Box 3 of that year’s W-2, or with Schedule SE if you were self-employed.
3. Mark any year that shows $0 or less than you earned.
4. Ask SSA to correct it, with the W-2 or tax return as proof.

Reading your Social Security Statement explains each line, and fixing a missing year on your record covers the correction request.

Deadline: The time limit for correcting earnings is 3 years, 3 months and 15 days after the year you earned them (20 CFR 404.802). For 2023 pay, that ends on April 15, 2027.

To learn which of your years are in the top 35, ask an SSA field office: “Which years are in my top 35, and is any year missing from my earnings record?”