Fixed Income

Benefit Computations: Simple and Advanced

You can find a complete breakdown of those computation “bend points” at www.socialsecurity.gov.
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Benefit Computations: Simple and Advanced
the Social Security retirement benefit formula is pretty messy. But for most of you, I would say: "Don't worry about it." Just let the SSA do it for you. JohnKwan/Shutterstock
Tom Margenau
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After doing this column for more than a quarter century, I’ve learned that with respect to how their benefits are figured, there are two kinds of potential Social Security beneficiaries. The vast majority are just looking for a general idea of how it works. But there are more than a few senior citizens out there who want to know exactly how the government comes up with their retirement benefit calculation.

I'll start today’s column addressing the first group. In a nutshell, a Social Security retirement benefit is a percentage of your average monthly income using your highest 35 years of inflation-adjusted earnings.

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Tom Margenau
Tom Margenau
Author
Tom Margenau worked for 32 years in a variety of positions for the Social Security Administration before retiring in 2005. He has served as the director of SSA’s public information office, the chief editor of more than 100 SSA publications, a deputy press officer and spokesman, and a speechwriter for the commissioner of Social Security. For 12 years, he also wrote Social Security columns for local newspapers, and recently published the book “Social Security: Simple and Smart.” If you have a Social Security question, contact him at [email protected]