Social Security Does A Better Job Explaining Your Retirement Benefits Than I Can

When you need information on Social Security benefits, it’s always best to go straight to the source.

It is a challenge when someone asks me to explain Social Security benefits and the years needed to retire, so I usually say something like this.

You will need at least 10 years of work, or 40 credits, to qualify for Social Security retirement benefits. The wages that need to count as a credit in 2024 is $1.730. 

Social Security until 1978 used three-month periods each year to provide “quarters of coverage” to determine retirement benefits. Then Social Security decided to award one credit for every $250 in wages. Four credits were the maximum amount per year and at any time of the year so the term, “quarters of coverage” was retired.

Social Security adjusts your earnings for calculating the best-paid 35 years to produce your averaged indexed monthly earnings (AIME). Every year, Social Security also adjusts the cap on how much of your earnings are subject to Social Security taxes. In 2024 that amount is income up to $168,600.

Social Security uses your AIME to then arrive at your primary insurance amount (PIA). A formula determines your PIA. This PIA is the monthly benefit you are entitled to receive if you claim it at your full retirement age. The PIA is arrived at by having your average monthly wage determined in 2024 by:

  • 90 percent of the first $1,174 of your AIME;
  • plus 32 percent of any amount over $1,174 up to $7,078;
  • plus 15 percent of any amount over $7,078.

But what happens if a person has not worked for 35 years? What does Social Security do?

If you work less than 35 years, the retirement benefit will be reduced. A “zero” will be used for each missing year less than the required 35 years used in the retirement formula.  

I read that explanation and realized how complicated it seemed to me and I wrote it. So, I decided to check in with Social Security and see if I could find some information online. 

I am now going to offer you information through the use of hotlinks from Social Security. I think the following experience will better explain and clarify the several concepts I attempted to share.

First, go to Social Security Retirement Benefit Calculation ( This illustrates side by side two examples of the calculation of benefits to arrive at the AIMEs. Note: Social Security has updated the calculation for 2024

Why I like it:

  • You see two examples of the highest 35 years being used
  • You see examples of someone taking benefits at age 62 or the Full Retirement Age
  • You see how dropped index years are portrayed in the calculation
  • You see the impact of age 60 on the calculation
  • You will learn about the contribution and benefit base concept

Now, staying on the initial link, go to the third paragraph and you will see a sentence: 

“The next step is to calculate benefits based on AIME amounts”.

Please do so. This will bring you to another link about PIAs.

Why I like it:

Social Security’s retirement computations are challenging. The formulas through online navigation with the online hotlinks are still complicated. 

I guess my new role is that of being a mere facilitator of the Social Security retirement online resources. From now on I am using Social Security’s resources to explain Social Security retirement when someone asks about the benefits and the internet is available. You can be a facilitator also by sharing this post.

About the Author

Francis Xavier (FX) Bergmeister retired from the USMC and the F.B.I. Consider following him on LinkedIn as he shares articles from others about retirement and other financial topics. He also provides retirement seminars thru Federal Career Experts.