| Introduction |
The "primary insurance amount" (PIA) is the
benefit (before rounding down to next lower whole dollar) a person would
receive if he/she elects to begin receiving benefits at his/her
normal retirement age. At this age, the
benefit is neither reduced for early retirement nor increased for delayed
retirement. |
| PIA formula bend points |
The PIA is the sum of three separate percentages
of portions of average indexed monthly
earnings. The portions depend on the year in which a worker
attains age 62, becomes disabled before age 62, or dies before attaining age 62.
For 2005 these portions are the first $627,
the amount between $627 and $3,779,
and the amount over $3,779.
These dollar amounts are the "bend points" of the 2005 PIA formula.
See table showing bend points for years
beginning with 1979 (table also includes bend points in
maximum family benefit formula). |
| PIA formula |
- For an individual who first becomes eligible for old-age
insurance benefits or disability insurance benefits in 2005, or who dies
in 2005 before becoming eligible for benefits, his/her PIA will be the
sum of:
- (a) 90 percent of the first $627 of his/her
average indexed monthly earnings, plus
- (b) 32 percent of his/her average indexed monthly earnings over
$627 and through $3,779, plus
- (c) 15 percent of his/her average indexed monthly earnings over
$3,779.
We round this amount to the next lower multiple of $.10 if it is not
already a multiple of $.10. |
| Determination of the PIA bend points
for 2005 |
Amounts in
formula |
|
| Bend points for 1979 |
| First: | $180 |
| Second: | $1,085 |
|
| Computation of bend points for 2005 |
First bend point
$180 times $34,064.95 divided
by $9,779.44 equals $627.00, which rounds to
$627. |
Second bend point
$1,085 times $34,064.95 divided
by $9,779.44 equals $3,779.41, which rounds to
$3,779. |
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www.socialsecurity.gov
