# 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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(c) 15% of his/her average indexed monthly earnings over \$5,157.
(b) 32% of his/her average indexed monthly earnings over \$1,095 and through \$3,655, plus
How are Average Indexed Monthly Earnings (AIME) computed for a self-employed individual whose self-employment came under Social Security after 1951?
The fourth column measures the Average Indexed Monthly Earnings used to calculate the PIA for beneficiaries, where own wages are indexed to the AWI in the year the worker turns 60.
First, we wanted to include only individuals whose benefits were determined using average indexed monthly earnings which would include all persons born from 1917 onward, but the historical annual earnings records were not provided for all these workers.
The primary insurance amount is determined by applying a formula to the person's average indexed monthly earnings (AIME).
Social Security benefits are normally based on the worker's Average Indexed Monthly Earnings (AIMEs).
The Primary Insurance Amount is determined by applying a formula to the Average Indexed Monthly Earnings (AIME).
(35) The Internet Web site http://www.socialsecurityinfo.com/current/ step2.htm gives the following definition of the Average Indexed Monthly Earnings: The [Average Indexed Monthly Earnings are] earnings indexed for inflation for a specific number of years divided by the number of months in those years.
Percent of baby-boom population projected to be eligible to receive income from an employer-sponsored pension plan at age 62, by birth cohort and demographic group Demographic group 1946-60 1951-55 1956-60 All baby boomers 48 49 52 Sex: Men 54 54 57 Women 44 45 48 Race or ethnicity: White 50 51 54 Black 43 48 49 Hispanic (1) 39 39 45 Other races 44 46 47 Education: Some high school 26 29 35 High school graduate 46 46 49 Some college 54 55 59 Average Indexed Monthly Earnings: (2) First quintile (3) 14 20 25 Second quintile 33 34 42 Third quintile 55 53 56 Fourth quintile 69 69 67 Fifth quintile 77 76 77 Type of plan: Defined benefit 31 30 29 Defined contribution 28 32 37 Defined benefit and defined contribution 11 12 14 (1) Any race.
First, the worker's average indexed monthly earnings (AIME) are calculated by indexing the taxable earnings for each year from 1951 onward to the average wage level in the second year before age 62, disability, or death; summing indexed earnings (and unindexed earnings in the years after age 60); and dividing the sum by the number of months elapsed after 1950 (or age 21, if later) through age 61 (or the year before the year of disability or death).
According to the Social Security Administration rules, the benefits are based first on the average indexed monthly earnings (AIME).

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