How To Calculate Your Social Security Benefit (2026): AIME, PIA + Bend Points Explained
Most Americans have no idea how their Social Security benefit is actually calculated - they just wait for SSA to give them a number. But understanding the formula gives you real power to make decisions that can be worth tens of thousands of dollars in retirement. In this video, we break down the full calculation: AIME, PIA, and the 2026 bend points.
Your benefit starts with your Average Indexed Monthly Earnings - your AIME - calculated from your highest 35 years of earnings, adjusted for inflation. That number is then run through a formula using bend points to produce your Primary Insurance Amount, or PIA. The PIA is the benefit you receive at your full retirement age.
Here's what we cover:
What AIME is and how SSA indexes your historical earnings for inflation
The 2026 bend points: $1,226 and $7,391
How the PIA formula works: 90%, 32%, and 15% replacement rates
Full retirement age in 2026: 67 for anyone born 1960 or later
Claiming at 62: up to 30% reduction from your PIA
Claiming at 70: up to 24% increase above your PIA
How to read your Social Security Statement and use the SSA.gov calculator
Understanding this formula before you claim can make a $300,000+ difference over your lifetime. Subscribe for more Social Security and retirement planning guides every week.
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