Average Indexed Monthly Earnings (AIME) Explained

From earnings record to AIME

Covered earnings are first limited by the Social Security taxable maximum for the year. Earlier earnings are generally adjusted using national average wage indexing through the applicable indexing year. SSA then selects the highest 35 years, adds them, and converts the total to a monthly average.

The indexing year for retirement benefits is generally two years before the year the worker first becomes eligible at age 62. Earnings at and after that point are generally taken at face value for this indexing step.

Why nominal comparisons can mislead

A $30,000 earning year decades ago may represent more in the AIME calculation after wage indexing than its original dollar amount suggests. Conversely, earnings above the taxable maximum do not add more covered earnings for that year.

How to audit an estimate

Claiming Planner exposes the entered amount, amount after the taxable cap, indexed amount, and highest-35 selection. Compare those rows with your official earnings record. The final SSA calculation may include details outside this educational model, so use the result as an estimate.