Help calculating indexed earnings for Social Security benefits after returning to workforce post-FRA

I created something similar last year! For indexing earnings, you need the Average Wage Index (AWI) series from SSA's website. The formula is: Indexed Earnings = Actual Earnings × (AWI for the year you turn 60 ÷ AWI for the earnings year) The trick is earnings after age 60 don't get indexed - they're counted at face value. For the AIME calculation, you take your highest 35 years of indexed earnings (including zeros if you don't have 35 years), add them up, divide by 420 (months in 35 years). Your scenario is interesting because working after FRA but before 70 can replace lower-earning years in your top 35, potentially increasing your benefit. The delayed retirement credits (8% per year from FRA to 70) apply regardless of whether you're working.

i did the same thing but used software. way easier than spreadsheet. good luck with all the math LOL

When I tried calling Social Security to ask similar questions about calculations, I spent days trying to reach someone who could help. Constantly getting busy signals or disconnected after waiting on hold forever. I finally used Claimyr.com to get through - it holds your place in line and calls you when an agent is available. Saved me tons of time and frustration. They have a video that shows how it works: https://youtu.be/Z-BRbJw3puU The SSA agent I spoke with explained that working after FRA can definitely increase benefits if those earnings replace lower-earning years in your top 35. They also sent me a detailed explanation of the indexing formula that was super helpful for my spreadsheet.

I'm a retired financial planner who built many SS calculation spreadsheets. Let me add some important nuances: 1. For your specific scenario (stopping work then resuming after FRA), be aware that any years with zero earnings can significantly impact your benefit if they end up in your top 35 years. 2. When modeling your return to work, remember that earnings are credited in the year earned, not when you file. So working age 67-70 while delaying benefits gives you both the earnings record improvement AND the 8% per year delayed retirement credits. 3. The PIA calculation uses the bend points from the year you turn 62, not the year you claim benefits. This is a common misconception. 4. For the most accurate modeling, you'll need to include projected COLA increases. Historically, these have averaged around 2.6%, but recent years have been much higher. Feel free to ask if you need help with specific Excel formulas for any of these calculations.

Anyone know if SSA publishes the actual code or algorithms they use? Seems like they should make this public so we don't all have to reverse engineer it!

I STILL don't understand why this is so complicated!!!! WHY can't Social Security just have a calculator where I can put in "not working these years" and "working these years" and it tells me my benefit??? I spent HOURS trying to figure this out and gave up. The whole system feels designed to be confusing on purpose so we don't know what we're entitled to. SO FRUSTRATING!!!!

This thread is so timely for me! I'm building almost the exact same spreadsheet. One thing I've discovered in my research: make sure you're using the correct Primary Insurance Amount (PIA) formula. The current formula has been in place since 1979, but they've used different formulas in the past. Also, don't forget the earnings limit if you plan to claim before your FRA but continue working. In 2025, you lose $1 in benefits for every $2 you earn above $22,750 (if you're under FRA for the full year). After FRA, there's no earnings limit, which makes your strategy of working between FRA and 70 particularly smart!

This is such a valuable discussion! I'm in a similar boat trying to model my SS benefits. One thing I'd add for anyone building these spreadsheets - don't forget about the WEP (Windfall Elimination Provision) if you have a pension from work where you didn't pay Social Security taxes. It can significantly reduce your benefit calculation. Also, I found it helpful to build in a "what-if" section where I can quickly test different retirement ages and earnings scenarios. The key insight from this thread is that working after FRA while delaying benefits is actually a double win - you get higher earnings in your top 35 years AND the 8% delayed retirement credits. @Alice Coleman - if you get your spreadsheet working, would you be willing to share a template version? I'd be happy to do the same once I get mine finished. It seems like there's real demand for a more flexible tool than what SSA provides.