Question

Anna turned 62 in 2019, and she is computing Social Security benefits. Using the formula from Example 3 in Section 10-2, compute her Social Security full retirement benefit if her average monthly salary over her 35 highest-paying years was $3,766. Round to the nearest dollar

Answer 1

Anna's full retirement benefit in 2019 would be approximately $1,106.53.

Calculate the primary insurance amount (PIA):

PIA = (average monthly salary X 0.90) + 42.75

PIA = ($3,766 X 0.90) + 42.75

PIA = $3,390.40 + 42.75

PIA = $3,433.15

Determine the appropriate bend point and benefit factor:

Since Anna's average monthly salary is less than the first bend point of $1,512, we'll use the first benefit factor of 0.90.

Calculate the full retirement benefit:

full retirement benefit = PIA X benefit factor

full retirement benefit = $3,433.15 X 0.90

full retirement benefit = $3,090.04

Round to the nearest dollar:

full retirement benefit = $1,106.53

Thus, Anna would get the benefit of approx. $1,106.53.