Retirement & Savings

What Are Social Security Benefits?

Social Security benefits are monthly payments from the US Social Security program to eligible retirees, people with disabilities, and survivors of workers. Retirement benefits are based on a worker's highest 35 years of indexed earnings on which Social Security tax was paid, and on the age at which benefits begin.

How the Benefit Is Calculated

Earnings are averaged into the Average Indexed Monthly Earnings (AIME), and a formula converts AIME into the Primary Insurance Amount (PIA), the benefit at full retirement age. Benefits receive annual cost-of-living adjustments.

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🔗 Related Terms

Full Retirement Age FICA Tax Cost-of-Living Adjustment (COLA) Social Security Wage Base

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.