I am frequently asked by clients how much they will receive for their Social Security benefits as well as how Social Security determines the amount of their benefit. Social Security disability benefits are based on the amount of income on which the individual has paid Social Security taxes. The benefits are computed using the “average indexed monthly earnings (AIME).” This is an average of up to 35 years of a worker’s indexed earnings.
When computing the AIME, Social Security will first adjust a worker’s earnings to reflect the change in general wage levels that occurred during the worker’s years of employment. Social Security will then determine the number of years that a person has worked and then will choose the years with the highest indexed earnings. Once this number is determined, Social Security will apply a formula to compute a beneficiary’s “primary insurance amount” or PIA. The percentages of PIA formula are fixed by law, but the dollar amounts change annually with changes in the national average wage index.
Depending on when the individual collects Social Security, the monthly benefit may be higher or lower than the PIA. Reduced benefits are paid to individuals who retire before his or her retirement age. For those that retire at the age of 62, the benefit will be 25% less than the person’s PIA. Similarly, benefits can be higher than the PIA if one retires after the normal retirement age. No delayed retirement credit is given after the age of 69.
For more information on quarters of coverage and your potential eligibility for Social Security disability benefits, contact an experienced Social Security disability attorney at Gardberg & Kemmerly, P.C. today at 251-343-1111 for a free case evaluation. Gardberg & Kemmerly, P.C. represents Social Security disability claimants in Alabama, Mississippi, Florida, and Louisiana at all levels of the disability process from initial application to appeals to Federal Court.