How to Determine SSI Benefits
The Social Security Act was passed in 1935 and was designed to provide a continued source of income to people over age 65. To pay for it, a payroll tax was implemented. The money was used to pay out benefits to retired individuals who had paid into the system. The Social Security Amendments of 1983 delayed the full retirement age of people born after 1938 on a sliding scale that made the retirement age 67 for anyone born after 1960.
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Instructions
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1
Determine how many years of earnings to use as your base. For people born after 1928, the base number is your highest 35 years of income.
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2
Adjust your earnings for inflation. Use the Social Security table in the Resource section of this article to find the maximum earnings for each calendar year that count toward Social Security. If your income is equal to or less than the limit, use your actual earnings. If it is more, use the annual limit. Then multiply the earnings times the index factor to get your inflation adjusted earnings.
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3
Average your highest 35 years of inflation adjusted earnings by taking the total and dividing by 35. If you have less than 35 years of income, use $0 for any remaining years.
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4
Use the Social Security benefit calculation formula for the current year, because the amounts change due to inflation. For 2009, multiply the first $744 of the average by 0.9, the next $3,739 by 0.32 and any extra income by 0.15. For example, if your average was $10,000 you would get $2,693.63.
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5
Round the number found in Step 4 down to the next whole number. This is your monthly retirement benefit. For example, $2,693.63 would be rounded down to $2,693.
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Tips & Warnings
If you take your Social Security retirement benefits before you reach retirement age, you will have your benefits reduced.
