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How Retirement Benefits Are Figured

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How Retirement Benefits Are Figured
Tom Margenau explains the ins and outs of how your highest 35 years of earnings are used to calculate your retirement benefit. Dzhafarov Eduard/Shutterstock
Tom Margenau
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After doing this column for so many years (more than a quarter century now), I’ve learned there are two kinds of potential Social Security beneficiaries. The vast majority are those who just want a general idea of how their benefits will be figured. But there are more than a few people out there who want to know exactly how the government comes up with their retirement benefit calculation.

I'll start today’s column by 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.

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]
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