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Average Indexed Monthly Earnings

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Average Indexed Monthly Earnings
Also called the AIME. The inflation-adjusted, average income an individual earns each month over his/her working life, as calculated by the Social Security Administration. The AIME is calculated using the 35 highest-earning years (after the 21st birthday) of an individual's life. If one worked for fewer than 35 years, zeros are entered for years one did not work up to 35. AIME is used to determine one's Social Security benefits following retirement.


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2) See text, note 35, for a description of the Average Indexed Monthly Earnings.
Instead of using the Average Indexed Monthly Earnings to determine the benefit, a new number, the Primary Insurance Amount, is obtained.
The mechanism's effect is to lower the Average Indexed Monthly Earnings (AIME) on which their benefits are based; using the progressive segment of the benefit formula generates benefits that are a higher share of their average yearly earnings than someone born in the United States who had the same average yearly earnings would receive.
 
 
 
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