Average Indexed Monthly Earnings
What are average indexed monthly earnings?The Average Indexed Monthly Earnings (AIME) is used to calculate the Primary Insurance Amount (PIA). Together this computes the amount of benefits paid under the Social Security Act. More specifically, Average Indexed Monthly Earnings is an average of an individual’s monthly income received during their work life. The average is adjusted for inflation.
Is it true that your social security payments are based on your last 40 quarters of payroll income?In some situations this is not the case. In many cases Social Security benefits are based on the highest 35 years of earnings. Your social security payments are determined in part by your Average Indexed Monthly Earnings and account for any changes in your average wages since the year the earnings were received. Social Security calculates the average indexed monthly earnings during those 35 years and applies a formula to reach the basic benefit amount, otherwise called the primary insurance amount. You would receive this amount only at full retirement age which is 65 years or older, depending on your date of birth.
I am an Illinois teacher and pay into the Teacher Retirement System (TRS). I have also worked summers and 3.5 years at another job and have paid into Social Security. I do have over 40 social Security Credits. Will I be able to draw Social Security when I retire in 4 years at age 62?In most cases, if you did not have 30 or more years of paying into Social Security you will be subject to Windfall Elimination Provision (WEP). The WEP is there to ensure that a non-lower lifetime income worker does not get the higher social rate to determine their monthly Social Security Benefits. Instead they would get the normal rate like most full time lifetime earners. So you will get a benefit but it will likely be less than what you previous may have calculated because the WEP will be applied to recalculate your benefit rate.
I am currently drawing Social Security retirement and still working. The paychecks that I receive from my current employment have deductions for Social Security. Will I ever derive any benefit from the Social Security that is being taken out of my current paychecks?There is no direct benefit to you as you are already reaping the benefits of social security retirement. The benefit is to the whole of society contributing to social security and those that will draw in the future. Even though you do not get direct benefit you still have to pay the social security tax to support the future beneficiaries of the program.
Having the correct information and data regarding the average indexed monthly earnings can help when dealing with questions about social security benefits. Experts can help answer what the average indexed monthly earnings is or how Windfall Elimination Provision might be applied to the calculation of your social security benefits. Get the answers fast and affordably by asking an Expert online.