Average Indexed Monthly Earnings - AIME


DEFINITION of 'Average Indexed Monthly Earnings - AIME'

A calculation used to determine the Primary Insurance Amount (PIA) amount used to value an individuals social security benefits. The Average Indexed Monthly Earnings (AIME) takes your top 35 highest earning years up to age 60 and indexes it for wage growth, and then averages it to get a monthly amount. The AIME tries to approximate your earnings over your lifetime at today's wage levels.

BREAKING DOWN 'Average Indexed Monthly Earnings - AIME'

If you recieve Social Security benefits, the number they used to calculate that benefit is from the Primary Insurance Amount (PIA). In order to calculate the PIA, the AIME is split into three parts. Predetermined percentages are applied to each part and they are all summed together to get the PIA.

For example, suppose your AIME is $5,000. The PIA calculation would take 90% from the first $744, then 32% from earnings over $744 but under $4483, and lastly 15% of monthly earnings over $4483. In this example your PIA would be $1943.63.

  1. Primary Insurance Amount - PIA

    A calculation, used in conjunction with the Average Indexed Monthly ...
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  3. Social Security Number - SSN

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  5. Social Security

    A United States federal program of social insurance and benefits ...
  6. Social Security Administration ...

    A U.S. government agency created in 1935 by President Franklin ...
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