AIME Made Simple: Turn Your 35 Best Years Into a Monthly Benefit

Average Indexed Monthly Earnings (AIME) — in plain English

AIME is the Social Security “lifetime average wage” the SSA builds from your work history. It adjusts (indexes) your past earnings to today’s wage levels, picks your 35 best years, sums them, and turns that into a monthly average. That number — your AIME — is the starting point for computing your Social Security benefit.

How AIME is built — step by step

1. Collect your covered earnings (wages/tips subject to Social Security tax) for each year after 1950. For each year, only the amount up to the taxable maximum for that year counts.
2. Pick the indexing (base) year. It’s tied to your first eligibility year:
   • Retirement/Survivors: the indexing “base” is two calendar years before the year you first qualify (usually age 62).
     Example: If you turn 62 in 2026, the base year is 2024.
   • Disability: similar rule, using the year before disability onset for “first eligibility.”
3. Index (restate) earnings for each year up to and including the base year by multiplying your actual year’s earnings by:
   Index factor = (National Average Wage Index in base year) / (NAWI in the worked year)
   Years after (and including) the base year are taken at face value — no indexing.
4. Select your 35 highest indexed years (fewer than 35 years of work? SSA fills the missing years with zeros).
5. Sum the 35 indexed-year totals and divide by 420 (months in 35 years) to get a monthly figure.
6. Truncate to whole dollars. SSA drops the cents and rounds the AIME down to the next lower dollar.

Quick Guide

• What is AIME? Your lifetime average monthly wage after indexing older earnings to today’s economy.
• Why 35 years? SSA uses your best 35 years to represent a full career.
• What if I don’t have 35 years? Missing years are zeros — this lowers AIME.
• When does indexing stop? Earnings in and after the base year are not indexed; they count at face value.
• How is AIME used? It feeds the Social Security benefit formula (PIA) with yearly “bend points.”
• Do high recent earnings help? Yes — recent, non-indexed years at face value can replace lower years in your top 35.

Worked example (retiring at 62 in 2026)

Suppose you turn 62 in 2026. Your base year is 2024. SSA will:

1. Take your covered earnings for every year after 1950 (each limited to that year’s taxable maximum).
2. Index earnings for years up through 2024 using the National Average Wage Index (NAWI) ratio.
   Earnings in 2024 and later are not indexed — they’re used as is.
3. Pick your 35 highest indexed years, add them up, divide by 420, then drop cents.

Key details that affect your AIME

• Taxable maximum (a.k.a. contribution and benefit base): Each year has a cap on earnings counted for Social Security. Income above that cap doesn’t improve AIME for that year.
• Zeros hurt: Years with no covered earnings are zeros. Replacing zeros with even modest earnings can raise AIME.
• Recent high years help: Because years at/after the base year are not indexed, strong recent earnings can replace weaker older years in your top 35.
• Multiple jobs: SSA uses combined covered wages (subject to that year’s cap).
• Self-employed: Net earnings subject to SE tax count the same way as wages, up to the cap.
• Non-covered work: Earnings that weren’t subject to Social Security tax don’t count toward AIME.
• Disability computations: For Disability Insurance (SSDI), SSA averages over your “elapsed years” and usually drops about 1/5 of low years (up to 5) before averaging, which can yield an AIME based on fewer than 35 years.

From AIME to your benefit (context)

SSA converts AIME into your Primary Insurance Amount (PIA) using a progressive formula with two “bend points.” While this article is about AIME, it’s useful to know AIME feeds that formula before early/late-claiming adjustments.

Practical tactics to improve AIME

• Fill gaps: Working extra years can replace zero/low years in your top 35.
• Maximize late-career years: Higher earnings near the base year count at face value and may push out weaker older years.
• Verify your earnings record: Check your my Social Security account and fix any missing/incorrect wage years.

FAQ

What does “indexed” mean in AIME?

It means SSA scales your earlier wages so they’re comparable to wages in the base year (two years before your first eligibility). This prevents very old, low nominal wages from dragging down your average unfairly.

Do earnings after the base year get indexed?

No. Earnings in and after the base year are used at face value (no index factor). If your base year is 2024, then 2024 and later earnings are not indexed.

Why does SSA average over 35 years?

To reflect a full career and smooth out short-term spikes or dips. Social Security is designed as an insurance program with lifetime coverage, not a short-horizon investment.

What if I only worked 25 years in covered employment?

SSA adds 10 zero years to reach 35. That reduces your AIME. Additional working years can replace those zeros and raise your AIME.

Does income above the yearly cap help AIME?

No. For each year, SSA only counts earnings up to that year’s taxable maximum toward AIME.

Is AIME rounded?

Yes. SSA drops cents and rounds the AIME down to the next lower whole dollar before computing your benefit.

Is AIME the same for retirement and disability?

The concept is the same (indexed lifetime average), but the averaging window for SSDI is different: it usually excludes roughly 1/5 of low years (up to 5) and uses your years from age 22 to disability, which can produce a higher AIME than a straight 35-year average if you had fewer low years.

Does claiming age change AIME?

No. AIME is fixed by your earnings history and indexing rules. Claiming age affects your benefit (PIA adjustments), not the AIME itself.

How do COLAs interact with AIME?

Cost-of-living adjustments apply to your PIA after it’s first set. AIME is a building block used to calculate that initial PIA.

Where can I see my own AIME?

Log into my Social Security and use SSA’s estimators/calculators; they show your indexed earnings and projected benefits based on your record.

Technical base & legal references

• Statute: Social Security Act §215 (42 U.S.C. §415) describes the AIME/PIA framework.
• Policy manual (POMS): Sections on indexing, AIME/PIA computation, dropout years for disability, and rounding/truncation.
• Official data: National Average Wage Index (NAWI), indexing factors by base year, and the yearly taxable maximum.

Conclusion

AIME is simply a fair, wage-updated average of your best 35 years of covered earnings. Understand your base year, confirm your earnings record, and keep working high-earning years if you can — each extra strong year can push out a weaker one and lift your AIME. Once AIME is set, SSA converts it to your benefit (PIA) and applies COLAs and claiming-age adjustments to determine what you’ll actually receive each month.