Will Social Security benefit calculations use the 4.43% AWI from 2023 for all wage indexing?

The AWI doesn't directly mean all wages are indexed by that percentage. The 4.43% is the increase in the national average wage from the previous year. When calculating your benefits, SSA uses a more complex formula that indexes your past earnings to reflect wage growth over your working lifetime. Your earnings are indexed to the average wage level two years before you become eligible for benefits (usually age 62). SSA uses the AWI values to create indexing factors for each year of your earnings. So no, the 4.43% doesn't apply to all your past wages equally. Earlier years will have higher indexing factors than more recent years. The indexing stops at age 60 - earnings after that count at face value.

i think ur confusing AWI with COLA which is different thingy. AWI is for calcuating initial benefits and COLA is the yearly increase AFTER you start getting benefits.

The Average Wage Index (AWI) is crucial for PIA calculations, but it's one of the most misunderstood parts of Social Security's formula. The 4.43% represents the increase from 2022 to 2023, but what actually matters for your benefit calculation is the AWI series as a whole. SSA takes your earnings history and indexes each year's earnings based on the ratio between the AWI for the year you turn 60 and the AWI for the year being indexed. This brings all your past earnings up to modern wage levels. For example, if you earned $30,000 in 1995 when the AWI was much lower, that might be equivalent to earning $75,000+ in today's economy after indexing. After indexing, they take your highest 35 years, average them, divide by 12 to get AIME (Average Indexed Monthly Earnings), then run that through the PIA bend point formula. The SSA website has a table of historical AWI values and indexing factors if you want to calculate manually. Or you can create a my Social Security account to get your personalized estimate.

So I had this EXACT same question last month and spent hours trying to get through to SSA. Kept getting disconnected or waiting forever. Finally I tried using Claimyr (claimyr.com) and they got me connected to an agent in under 20 minutes! The agent walked me through exactly how the AWI affects my specific situation. There's a video that shows how it works here: https://youtu.be/Z-BRbJw3puU - totally worth it after wasting days trying to get through on my own.

To add to my previous explanation - if you want to see the actual AWI values and indexing factors, go to ssa.gov and search for "Average Wage Index series." There's a table showing all historical values. And remember: only your earnings up to age 60 get indexed. Earnings after 60 count at face value. This is why working past 60 can still increase your benefit, but not as dramatically as you might expect.

my brother in law works for SSA and he says don't bother with all these calculations just use the estimator on the my social security account its close enough for planning!!!

To answer your follow-up question - yes, they will count years with zero earnings if you don't have 35 years of work. If you have more than 35 years of earnings, they'll use your highest 35 years and ignore the lowest years. With 33 years of work history, if you work 2 more years, you'll have exactly 35 years. But if you don't, they'll include 2 zero-earning years in your calculation, which will bring down your average. And yes, if you're turning 62 in 2027, the 2025 AWI will be your indexing base year. The SSA's calculations always use the AWI from the year you turn 60.

The WHOLE SYSTEM is designed to be confusing on purpose!!! They don't want us to understand how our benefits are calculated because then we might realize we're not getting what we deserve after paying in our whole lives!!!!