Computation of Primary Insurance Amount (PIA)

The “primary insurance amount” (PIA) is the benefit a person would receive if he/she elects to begin receiving retirement benefits at his/her normal retirement age. This amount is not reduced for early retirement nor increased for “delayed retirement credit” (DRC).

Following provides an example of an individual retiring in 2019. Steps in the computation follows:
Step 1. Identify earnings years by year.
Step 2. Apply the indexing factors to annual earnings. [Indexing factors for eligibility year 2015: http://www.ssa.gov/cgi-bin/awiFactors.cgi%5D
Step 3. Identify the highest 35 years of indexed earnings.
Step 4. Sum up the indexed earnings.
Step 5. Compute the averaged indexed monthly earnings by dividing total indexed earnings by 35 years, then divide by 12 month per year.
Step 6. For an individual retiring in 2019, refer to table of bend points. [Benefit Formula Bend Points: http://www.ssa.gov/oact/COLA/bendpoints.html%5D
Step 7. Segregate the averaged indexed monthly earnings by amount from the bend point table.
Step 8. Compute and round the amount to the next lower multiple of $.10 if it is not already a multiple of $.10.

Benefit Examples For Workers With Maximum-Taxable Earnings: http://www.ssa.gov/oact/COLA/examplemax.html

(1) Contribution Base (2) Indexing Factors
Year Earnings age Factor Indexed
Earnings
a b c d e=b*d
1937 3,000
1938 3,000
1939 3,000
1940 3,000
1941 3,000
1942 3,000
1943 3,000
1944 3,000
1945 3,000
1946 3,000
1947 3,000
1948 3,000
1949 3,000
1950 3,000
1951 3,600
1952 3,600
1953 3,600 0
1954 3,600 1 14.224741
1955 4,200 2 13.596540
1956 4,200 3 12.707697
1957 4,200 4 12.326088
1958 4,200 5 12.218455
1959 4,800 6 11.641724
1960 4,800 7 11.202100
1961 4,800 8 10.983801
1962 4,800 9 10.460027
1963 4,800 10 10.209651
1964 4,800 11 9.808790
1965 4,800 12 9.635299
1966 6,600 13 9.089690
1967 6,600 14 8.610085
1968 7,800 15 8.056370
1969 7,800 16 7.616218
1970 7,800 17 7.256130
1971 7,800 18 6.908975
1972 9,000 19 6.292321
1973 10,800 20 5.921796
1974 13,200 21 5.589528
1975 14,100 22 5.200855
1976 15,300 23 4.865145
1977 16,500 24 4.590054
1978 17,700 25 4.252371
1979 22,900 26 3.910302
1980 25,900 27 3.587190
1981 29,700 28 3.259118
1982 32,400 29 3.089059
1983 35,700 30 2.945564
1984 37,800 31 2.782025
1985 39,600 32 2.668339 105,666
1986 42,000 33 2.591423 108,840
1987 43,800 34 2.436064 106,700
1988 45,000 35 2.321717 104,477
1989 48,000 36 2.233292 107,198
1990 51,300 37 2.134687 109,509
1991 53,400 38 2.057995 109,897
1992 55,500 39 1.957155 108,622
1993 57,600 40 1.940466 111,771
1994 60,600 41 1.889747 114,519
1995 61,200 42 1.816918 111,195
1996 62,700 43 1.732204 108,609
1997 65,400 44 1.636701 107,040
1998 68,400 45 1.555299 106,382
1999 72,600 46 1.473200 106,954
2000 76,200 47 1.396001 106,375
2001 80,400 48 1.363473 109,623
2002 84,900 49 1.349935 114,609
2003 87,000 50 1.317723 114,642
2004 87,900 51 1.259186 110,682
2005 90,000 52 1.214739 109,326
2006 94,200 53 1.161359 109,400
2007 97,500 54 1.110942 108,317
2008 102,000 55 1.085961 110,768
2009 106,800 56 1.102589 117,756
2010 106,800 57 1.077131 115,038
2011 106,800 58 1.044406 111,543
2012 110,100 59 1.012781 111,507
2013 113,700 60 1.000000 113,700
2014 117,000 61 1.000000 117,000
2015 118,500 62 1.000000 118,500
2016 118,500 63 1.000000 118,500
2017 127,200 64 1.000000 127,200
2018 128,400 65 1.000000 128,400
2019 132,900 66 1.000000 132,900
Total, 35 years max 3,933,168
Total years 35
Months per year 12
average indexed monthly earnings (AIME) 9,365

 

To determine your PIA, your average indexed monthly earnings are applied to a formula. For 2018, the formula is:

(4) From To AIME PIA
90% 1 895 895 806
32% 896 5,397 4,502 1,441
15% 5,398 3,968 595
Total (3) 9,365 2,841
Differences 20
Workers With Maximum-Taxable Earnings 2,861

(1) Contribution and Benefit Base: http://www.ssa.gov/oact/cola/cbb.html
(2) Indexing factors for eligibility year 2015: http://www.ssa.gov/cgi-bin/awiFactors.cgi
(3) Benefit Examples For Workers With Maximum-Taxable Earnings: http://www.ssa.gov/oact/COLA/examplemax.html
(4) Benefit Formula Bend Points: http://www.ssa.gov/oact/COLA/bendpoints.html

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