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

Thank you! This is exactly what I needed. So if I understand correctly, I'll use the AWI ratio to index all earnings before age 60, then use actual dollar amounts for earnings after 60? Do you happen to know where on the SSA website I can find the historical AWI table?

Correct, everything before 60 gets indexed, after 60 is face value. The AWI data is here: https://www.ssa.gov/oact/cola/AWI.html One more calculation detail - after you get your AIME, you need to apply the bend points formula to calculate your PIA (Primary Insurance Amount). For 2025, the bend points are approximately $1,174 and $7,078 (they adjust each year). You multiply the first $1,174 of AIME by 90%, then the amount between $1,174-$7,078 by 32%, and anything above $7,078 by 15%. That gives you your monthly benefit at FRA, before any reductions or delayed retirement credits.

What software did you use? I'd prefer building my own spreadsheet so I can tweak all the variables, but I'm open to other options if they're flexible enough.

used maximizemysocialsecurity.com. costs money but does all the math for u. lets u try diff scenarios too

Does that service actually work?? I spent 2 hours on hold last month before giving up. How long did it take for you to get a callback?

I got a callback in about 45 minutes. Way better than the 2+ hours I spent on previous attempts! The agent I spoke with was really helpful with the indexing questions too, which was surprising since not all agents understand the calculation details.

This is incredibly helpful! I hadn't considered using the bend points from age 62 rather than claim age - that would have thrown off my calculations. One question: when projecting future earnings (for the years I haven't worked yet), should I adjust those for inflation or just use today's dollars?

Great question. For earnings projections, it's best to use nominal dollars (including inflation) rather than today's dollars. The reason is that the AWI indexing and bend points adjustments are designed to account for wage growth over time. So if you expect your earnings to keep pace with general wage growth, project increases of around 3-4% annually. If you expect your earnings to grow faster or slower than average wages, adjust accordingly. Remember that for years after age 60, actual dollar amounts are used (no indexing), so those inflation adjustments will directly impact your benefit calculation.

They don't publish the actual code, but the detailed calculation methodology is all documented in their Program Operations Manual System (POMS). You can find it here: https://secure.ssa.gov/apps10/poms.nsf/subchapterlist!openview&restricttocategory=03028 Be warned though - it's extremely technical and written for SSA employees, not the general public.

I feel your frustration! The official calculators are pretty basic. I think it's because they'd need to maintain too many variables to account for everyone's unique situation. But I agree they could do much better. The good news is that once you understand the formula (like the folks above explained), it's actually pretty straightforward - just tedious to calculate manually. The hardest part is finding all the historical AWI data and bend points, but at least that's all published.

It shouldn't be this hard to plan retirement!!! I just want to know how much money I'll get if I stop working at 63 vs 65 vs 67. Is that really too much to ask??? Sorry for yelling but this whole process makes me so mad. I'm trying to make life decisions based on this!

Thanks for the tip about the earnings limit. I'm actually planning to stop working before FRA, take a few years off, then return to work after FRA while delaying benefits to 70. So the earnings limit shouldn't affect me. Have you figured out a good way to model COLA increases in your spreadsheet? I'm wondering if I should just apply an estimated annual percentage to the calculated benefit amount.

For COLA, I created a variable cell where I can input different assumptions. Currently using 2.5% as my baseline, but I can easily change it to see different scenarios. I apply it to the calculated benefit starting from age 62 (when the PIA is first determined) through the projection period. My spreadsheet has separate columns showing the benefit amount each year with and without COLA so I can see the impact. Over a 20-30 year retirement, even small COLA differences compound significantly!

This is such a helpful thread! I'm new to this community but have been struggling with the same Social Security calculation questions. @CyberSiren - I'd definitely be interested in a template if you and @Alice Coleman are willing to share once you get yours working! One question for the group: I keep seeing references to bend "points -" can someone explain what these are in simple terms? I understand they re'used in the PIA calculation but I m'not clear on what they actually represent or why they exist. Also, is there a good resource for understanding what counts as earnings "for" Social Security purposes? I have some 1099 income mixed with W-2 income and I m'not sure if they re'treated the same way in the calculation.

@Malik Robinson Great questions! Bend points are basically income thresholds that determine what percentage of your AIME gets counted toward your benefit. Think of it like tax brackets but in reverse - you get a higher percentage on lower amounts. As @Evelyn Rivera mentioned earlier, for 2025 the bend points are around $1,174 and $7,078. So: - First $1,174 of monthly AIME = you get 90% of that amount - Next chunk $1,174 (to $7,078 =) you get 32% of that amount - Anything above $7,078 = you get 15% of that amount This creates a progressive benefit structure that replaces a higher percentage of income for lower earners. For your 1099 vs W-2 question - both count as earnings for Social Security purposes as long as you paid Social Security taxes on them. The key is whether you paid into the system, not how the income was classified. Self-employment income 1099 (actually) gets a slight boost in the calculation because you pay both the employee and employer portions of SS taxes. I d'also love to see a template spreadsheet when one gets developed!

@Alice Coleman I d'definitely be interested in collaborating on a template! I ve'been working on something similar and have gotten most of the indexing formulas working in Excel. One thing I ve'learned that might help everyone here - when building your spreadsheet, create separate worksheets for: 1. Raw earnings history input 2. AWI lookup table copy/paste (from SSA website 3.) Indexing calculations 4. Top 35 years selection 5. AIME and PIA calculations 6. Scenario modeling This makes it much easier to debug and modify. I found that the trickiest part was automatically selecting the top 35 indexed earnings years, especially when some years have zero earnings. For anyone interested, I can share the Excel formulas I ve'developed for the indexing calculations once I double-check them against some known examples. The AWI ratio formula @Owen Jenkins mentioned is spot-on, but implementing it cleanly in Excel took some trial and error. @CyberSiren great point about WEP - that s a'whole other layer of complexity that affects a lot of government workers and teachers!

@Omar Fawaz Great questions! For handling uncertain future earnings, I d'recommend building multiple scenarios in your spreadsheet - maybe conservative low (earnings ,)moderate expected (earnings ,)and optimistic high (earnings cases.) You can use Excel s'scenario manager or just create separate columns for each assumption. The key insight from this thread is that even modest earnings after FRA can boost your benefits if they replace lower-earning years in your top 35. So even conservative consulting income might be worth modeling. For updating frequency, I think annually makes sense - that s'when most of the key variables AWI, (bend points, COLA get) updated. You could set calendar reminders to refresh the data each January when SSA publishes the new numbers. I m'also really excited about the collaborative template idea! It sounds like several people here @Alice (Coleman, @CyberSiren, @Reginald Blackwell have pieces) of the puzzle figured out. Maybe we could create a shared version that incorporates everyone s best'formulas and approaches? This community seems perfect for that kind of collaboration. The variability in consulting income is actually a great test case for the spreadsheet - being able to quickly model what if "I earn $30K vs $60K vs $90K in year X would be" super valuable for retirement planning decisions.

@Yara Sayegh Welcome to the community! Your questions about validation are spot-on - that s'something I ve'been wondering about too as I read through everyone s'approaches. For test cases, I d'suggest starting with the examples in SSA s'own documentation. They sometimes publish worked examples in their technical materials, and you could also try reverse-engineering the results from the official SSA calculator for simple scenarios like (someone with steady earnings and normal retirement timing .)Another validation approach might be to compare results across different scenarios that should have predictable relationships - like how delaying benefits from FRA to age 70 should increase your monthly benefit by exactly 32% 8% (per year for 4 years ,)regardless of your earnings history. From reading this thread, it seems like the biggest gotchas "people" encounter are: - Using the wrong bend points they (re'based on age 62, not claim age -) Forgetting that earnings after age 60 aren t'indexed - Not accounting for years with zero earnings in the top 35 calculation - Mixing up nominal vs. real dollar projections I m'also really excited about the collaborative template idea! It would be amazing to have a tool that incorporates all the expertise shared in this thread. The fact that so many people are working on similar projects suggests there s'a real gap in the available tools. @Alice Coleman - any update on your progress with the spreadsheet?