The Social Security Administration calculates Average Indexed Monthly Earnings (AIME) by adjusting each year of your past wages upward for wage growth, keeping the 35 highest of those indexed years, adding them together, and dividing by 420 months. The result is a single monthly figure that then feeds the formula for your retirement benefit.1Social Security Administration. Social Security Retirement Benefit Calculation
Step 1: Indexing Your Old Wages
Raw wages from decades ago would look tiny next to recent paychecks and would drag your average down. Indexing corrects that by restating each year’s earnings in terms of current wage levels.
The Social Security Administration uses the National Average Wage Index (AWI) to build the multiplier. For each year you worked, the agency divides the AWI from the year you turned 60 by the AWI from the year you earned those wages. That ratio is your indexing factor for that year. For someone turning 60 in 2024, when the AWI was $69,846.57, wages earned in 1986 get multiplied by roughly 4.03, because the 1986 AWI was $17,321.82.1Social Security Administration. Social Security Retirement Benefit Calculation So $20,000 earned in 1986 shows up in the calculation as about $80,600.
The year you turn 60 is the pivot. Earnings from age 60 onward are not indexed at all and enter the calculation at their actual dollar amount.1Social Security Administration. Social Security Retirement Benefit Calculation
Step 2: Picking the 35 Highest Years
Once every year of your history has been indexed, the agency lines those years up and selects the 35 with the highest amounts.2Social Security Administration. Social Security Benefit Amounts Lower-earning years fall out of the calculation entirely.
If you worked fewer than 35 years in jobs covered by Social Security, the missing slots still get filled, but with zeros. Each zero pulls the average down by the same amount no matter how strong your other years were. Someone with 30 solid years and five zeros ends up with a meaningfully lower AIME than a worker who put in the full 35. Adding another year of real earnings to replace a zero is one of the most direct ways to lift your eventual benefit.
What Counts as Earnings
Only wages up to that year’s Social Security taxable maximum are counted. For 2026, the taxable maximum is $184,500. Anything above it was never subject to Social Security tax and never enters the AIME.3Social Security Administration. Contribution and Benefit Base Every prior year had its own cap, and each year’s earnings are trimmed to that year’s cap before indexing.
Step 3: The Final Division
Add up the 35 highest indexed years. Divide that total by 420, the number of months in 35 years. That quotient is your AIME.1Social Security Administration. Social Security Retirement Benefit Calculation
If the division does not land on an even dollar, the agency rounds down to the next whole dollar. A raw result of $5,432.89 becomes $5,432.4Social Security Administration. Social Security Handbook 738 – Rounding of Benefit Rates
A Worked Example
Suppose your 35 highest years of indexed earnings add up to $2,100,000. Divide by 420 months and your AIME is $5,000. That $5,000 is the number the Social Security Administration then uses as the input to the benefit formula that produces your monthly check.
How the Rules Differ for Disability and Survivor Claims
The 35-year, 420-month structure applies to retirement. A worker who becomes disabled at 40 has not had time to build up 35 years of earnings, so a different divisor is used.
For disability and survivor claims, the agency counts “elapsed years” from age 22 to the year of disability onset or death, then subtracts dropout years to reach the number of computation years, with a floor of two years.5Office of the Law Revision Counsel. 42 USC 415 – Old-Age, Survivors, and Disability Insurance Benefits Survivor calculations drop five years. Disability calculations drop one year for every five years of earnings, capped at five.6Social Security Administration. Computation Years Defined The total indexed earnings are then divided by the number of months in those computation years rather than 420, which keeps a younger worker’s AIME from being flattened by decades of unfilled zeros.
Check Your Earnings Record
Every number in your AIME depends on what your earnings record says. A year of wages an employer misreported, or self-employment income that never made it onto your file, translates directly into a smaller monthly benefit for the rest of your life.
You can review your record by signing in to your personal account at ssa.gov, which lists yearly earnings back to your first covered job.7Social Security Administration. Personal Social Security Record Compare it against old tax returns or W-2s. If a year is wrong or missing, contact the Social Security Administration with documentation. Corrections get harder as time passes and payroll records disappear, and catching even a single missing year of moderate earnings can add up to real money over a long retirement.