Annual Statistical Supplement, 2006

 

History of OASDI Provisions

Benefit Computation and Automatic Adjustments

Table 2.A8 Factors for indexing earnings, 1951–2006
Year Annual
maximum
taxable
earnings
(dollars)
Average
annual
wage a
(dollars)
Factors for workers who were first eligible (attained age 62, became disabled, or died) in b
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
1951 3,600 2,799.16 7.5122465 7.7921948 8.1936795 8.2641471 8.4859494 8.8260978 9.2577416 9.7979394 10.3107504 10.8853513 11.4873105 11.7613570 11.8793102 12.1697045 12.7354456
1952 3,600 2,973.32 7.0722223 7.3357728 7.7137409 7.7800809 7.9888912 8.3091157 8.7154763 9.2240324 9.7068059 10.2477500 10.8144498 11.0724443 11.1834885 11.4568731 11.9894764
1953 3,600 3,139.44 6.6980035 6.9476085 7.3055768 7.3684065 7.5661679 7.8694481 8.2543065 8.7359529 9.1931809 9.7055016 10.2422152 10.4865581 10.5917265 10.8506453 11.3550665
1954 3,600 3,155.64 6.6636182 6.9119418 7.2680724 7.3305795 7.5273257 7.8290489 8.2119317 8.6911054 9.1459862 9.6556768 10.1896351 10.4327236 10.5373522 10.7949418 11.2967734
1955 4,200 3,301.44 6.3693358 6.6066928 6.9470958 7.0068425 7.1948998 7.4832982 7.8492718 8.3072841 8.7420762 9.2292575 9.7396348 9.9719880 10.0719959 10.3182096 10.7978791
1956 4,200 3,532.36 5.9529550 6.1747953 6.4929452 6.5487861 6.7245496 6.9940946 7.3361435 7.7642143 8.1705828 8.6259158 9.1029284 9.3200919 9.4135620 9.6436801 10.0919923
1957 4,200 3,641.72 5.7741891 5.9893677 6.2979636 6.3521276 6.5226129 6.7840636 7.1158409 7.5310568 7.9252221 8.3668816 8.8295695 9.0402118 9.1308750 9.3540827 9.7889322
1958 4,200 3,673.80 5.7237683 5.9370679 6.2429691 6.2966601 6.4656568 6.7248244 7.0537046 7.4652948 7.8560183 8.2938211 8.7524688 8.9612717 9.0511432 9.2724019 9.7034542
1959 4,800 3,855.80 5.4535972 5.6568287 5.9482909 5.9994476 6.1604673 6.4074018 6.7207583 7.1129208 7.4852015 7.9023393 8.3393381 8.5382852 8.6239146 8.8347295 9.2454354
1960 4,800 4,007.12 5.2476542 5.4432111 5.7236669 5.7728918 5.9278310 6.1654405 6.4669638 6.8443171 7.2025395 7.6039250 8.0244215 8.2158558 8.2982516 8.5011055 8.8963021
1961 4,800 4,086.76 5.1453915 5.3371375 5.6121279 5.6603936 5.8123134 6.0452926 6.3409400 6.7109397 7.0621813 7.4557449 7.8680471 8.0557508 8.1365409 8.3354418 8.7229370
1962 4,800 4,291.40 4.9000280 5.0826304 5.3445076 5.3904716 5.5351470 5.7570164 6.0385655 6.3909214 6.7254136 7.1002097 7.4928508 7.6716037 7.7485413 7.9379573 8.3069744
1963 4,800 4,396.64 4.7827386 4.9609702 5.2165790 5.2614428 5.4026552 5.6192138 5.8940236 6.2379453 6.5644310 6.9302558 7.3134985 7.4879726 7.5630686 7.7479507 8.1081348
1964 4,800 4,576.32 4.5949540 4.7661877 5.0117605 5.0548629 5.1905308 5.3985866 5.6626066 5.9930250 6.3066918 6.6581533 7.0263487 7.1939724 7.2661199 7.4437430 7.7897852
1965 4,800 4,658.72 4.5136819 4.6818869 4.9231162 4.9654562 5.0987245 5.3031004 5.5624506 5.8870248 6.1951437 6.5403888 6.9020718 7.0667308 7.1376022 7.3120836 7.6520053
1966 6,600 4,938.36 4.2580897 4.4167699 4.6443394 4.6842818 4.8100037 5.0028066 5.2474708 5.5536656 5.8443370 6.1700322 6.5112345 6.6665695 6.7334277 6.8980289 7.2187022
1967 6,600 5,213.44 4.0334175 4.1837251 4.3992872 4.4371221 4.5562105 4.7388404 4.9705952 5.2606341 5.5359686 5.8444789 6.1676782 6.3148171 6.3781476 6.5340639 6.8378173
1968 7,800 5,571.76 3.7740283 3.9146697 4.1163690 4.1517707 4.2632005 4.4340855 4.6509361 4.9223226 5.1799503 5.4686203 5.7710346 5.9087111 5.9679688 6.1138581 6.3980771
1969 7,800 5,893.76 3.5678378 3.7007954 3.8914751 3.9249427 4.0302846 4.1918334 4.3968367 4.6533961 4.8969486 5.1698474 5.4557396 5.5858942 5.6419145 5.7798332 6.0485242
1970 7,800 6,186.24 3.3991536 3.5258251 3.7074895 3.7393748 3.8397363 3.9936472 4.1889581 4.4333876 4.6654252 4.9254216 5.1977970 5.3217981 5.3751697 5.5065678 5.7625553
1971 7,800 6,497.08 3.2365278 3.3571389 3.5301120 3.5604718 3.6560316 3.8025790 3.9885456 4.2212809 4.4422171 4.6897745 4.9491187 5.0671871 5.1180053 5.2431169 5.4868572
1972 9,000 7,133.80 2.9476548 3.0575009 3.2150355 3.2426855 3.3297163 3.4631837 3.6325521 3.8445148 4.0457316 4.2711935 4.5073902 4.6149205 4.6612030 4.7751479 4.9971334
1973 10,800 7,580.16 2.7740813 2.8774591 3.0257171 3.0517390 3.1336449 3.2592531 3.4186482 3.6181294 3.8074975 4.0196830 4.2419711 4.3431695 4.3867267 4.4939619 4.7028757
1974 13,200 8,030.76 2.6184296 2.7160070 2.8559464 2.8805082 2.9578184 3.0763788 3.2268303 3.4151189 3.5938616 3.7941415 4.0039573 4.0994775 4.1405907 4.2418090 4.4390008
1975 14,100 8,630.92 2.4363544 2.5271466 2.6573552 2.6802091 2.7521435 2.8624596 3.0024493 3.1776450 3.3439587 3.5303119 3.7255379 3.8144161 3.8526704 3.9468504 4.1303303
1976 15,300 9,226.48 2.2790902 2.3640218 2.4858256 2.5072043 2.5744954 2.6776907 2.8086443 2.9725312 3.1281095 3.3024339 3.4850582 3.5681994 3.6039844 3.6920852 3.8637216
1977 16,500 9,779.44 2.1502233 2.2303527 2.3452693 2.3654391 2.4289254 2.5262858 2.6498348 2.8044551 2.9512365 3.1157040 3.2880022 3.3664423 3.4002039 3.4833232 3.6452547
1978 17,700 10,556.03 1.9920349 2.0662692 2.1727316 2.1914176 2.2502333 2.3404310 2.4548907 2.5981359 2.7341188 2.8864867 3.0461092 3.1187786 3.1500564 3.2270607 3.3770793
1979 22,900 11,479.46 1.8317917 1.9000545 1.9979529 2.0151357 2.0692202 2.1521622 2.2574145 2.3891368 2.5141810 2.6542921 2.8010743 2.8678980 2.8966598 2.9674697 3.1054205
1980 25,900 12,513.46 1.6804289 1.7430511 1.8328600 1.8486230 1.8982384 1.9743268 2.0708821 2.1917200 2.3064316 2.4349652 2.5696186 2.6309206 2.6573058 2.7222647 2.8488164
1981 29,700 13,773.10 1.5267427 1.5836377 1.6652330 1.6795543 1.7246321 1.7937618 1.8814864 1.9912728 2.0954934 2.2122717 2.3346102 2.3903057 2.4142778 2.4732958 2.5882735
1982 32,400 14,531.34 1.4470778 1.5010040 1.5783417 1.5919158 1.6346414 1.7001639 1.7833111 1.8873690 1.9861513 2.0968362 2.2127911 2.2655805 2.2883017 2.3442401 2.4532184
1983 35,700 15,239.24 1.3798575 1.4312787 1.5050239 1.5179674 1.5587083 1.6211871 1.7004719 1.7996960 1.8938897 1.9994330 2.1100015 2.1603387 2.1820045 2.2353444 2.3392604
1984 37,800 16,135.07 1.3032469 1.3518132 1.4214639 1.4336889 1.4721678 1.5311777 1.6060606 1.6997757 1.7887397 1.8884232 1.9928528 2.0403952 2.0608581 2.1112366 2.2093830
1985 39,600 16,822.51 1.2499906 1.2965723 1.3633768 1.3751022 1.4120087 1.4686072 1.5404301 1.6303156 1.7156441 1.8112541 1.9114163 1.9570159 1.9766426 2.0249624 2.1190982
1986 42,000 17,321.82 1.2139590 1.2591979 1.3240768 1.3354642 1.3713068 1.4262739 1.4960264 1.5833209 1.6661898 1.7590438 1.8563188 1.9006040 1.9196649 1.9665918 2.0580141
1987 43,800 18,426.51 1.1411808 1.1837076 1.2446969 1.2554016 1.2890954 1.3407672 1.4063379 1.4883991 1.5662999 1.6535871 1.7450304 1.7866606 1.8045788 1.8486925 1.9346339
1988 45,000 19,334.04 1.0876144 1.1281450 1.1862715 1.1964737 1.2285860 1.2778323 1.3403251 1.4185344 1.4927785 1.5759686 1.6631196 1.7027957 1.7198728 1.7619158 1.8438231
1989 48,000 20,099.55 1.0461916 1.0851785 1.1410912 1.1509049 1.1817941 1.2291648 1.2892776 1.3645082 1.4359247 1.5159464 1.5997781 1.6379431 1.6543699 1.6948116 1.7735994
1990 51,300 21,027.98 1.0000000 1.0372656 1.0907096 1.1000900 1.1296154 1.1748946 1.2323533 1.3042622 1.3725256 1.4490141 1.5291445 1.5656245 1.5813259 1.6199820 1.6952912
1991 53,400 21,811.60 1.0000000 1.0000000 1.0515240 1.0605673 1.0890320 1.1326844 1.1880788 1.2574043 1.3232152 1.3969557 1.4742073 1.5093767 1.5245140 1.5617813 1.6343849
1992 55,500 22,935.42 1.0000000 1.0000000 1.0000000 1.0086002 1.0356702 1.0771837 1.1298638 1.1957924 1.2583785 1.3285059 1.4019721 1.4354182 1.4498139 1.4852551 1.5543012
1993 57,600 23,132.67 1.0000000 1.0000000 1.0000000 1.0000000 1.0268391 1.0679986 1.1202295 1.1855960 1.2476485 1.3171778 1.3900177 1.4231786 1.4374514 1.4725905 1.5410478
1994 60,600 23,753.53 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0400837 1.0909494 1.1546073 1.2150379 1.2827500 1.3536860 1.3859801 1.3998799 1.4341005 1.5007685
1995 61,200 24,705.66 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0489054 1.1101100 1.1682117 1.2333141 1.3015163 1.3325659 1.3459300 1.3788318 1.4429305
1996 62,700 25,913.90 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0583509 1.1137436 1.1758107 1.2408329 1.2704348 1.2831758 1.3145435 1.3756536
1997 65,400 27,426.00 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0523387 1.1109837 1.1724211 1.2003909 1.2124294 1.2420677 1.2998086
1998 68,400 28,861.44 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0557283 1.1141100 1.1406888 1.1521286 1.1802928 1.2351619
1999 72,600 30,469.84 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0552999 1.0804756 1.0913116 1.1179891 1.1699618
2000 76,200 32,154.82 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0238565 1.0341246 1.0594042 1.1086534
2001 80,400 32,921.92 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0100289 1.0347194 1.0828211
2002 84,900 33,252.09 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0244454 1.0720695
2003 87,000 34,064.95 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0464877
2004 87,900 35,648.55 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000
2005 90,000 . . . 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000
2006 94,200 . . . 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000 1.0000000
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTE: . . . = not available.
a. National average wage levels. For years before 1978, average wages were determined from wages earned during the first quarter of the year and reported to the Social Security Administration (SSA) for Social Security tax purposes. These wages were then multiplied by 4 to obtain the average wage for the year. For 1973–1977, from data collected on all taxable wages reported to SSA; for 1957–1972, based on 1 percent statistical sample; for 1951–1956, based on 1/10 of 1 percent statistical sample. For 1978–1984, from wage data collected by the Internal Revenue Service during processing of annual tax returns. For years after 1984, from W-2 data processed by SSA. For years after 1977, the average wage amounts have been adjusted to be consistent with the pre-1978 series.
b. The indexing factor for a given year represents the ratio of the average annual wage for the second year before the year of first eligibility to the average annual wage for the year to be indexed. Multiplying a worker's covered earnings, up to the maximum taxable amounts for various years after 1951, by the indicated factors gives the indexed earnings. Earnings in the year before the year of first eligibility, and any earnings thereafter, are not indexed. The actual taxable earnings for those years are considered in calculating the average indexed monthly earnings (AIME).
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A9 Indexed earnings for workers with maximum earnings, 1951–2006 (in dollars)
Year Annual
maximum
taxable
earnings
Average
annual
wage a
Annual maximum indexed earnings for workers who were first eligible (attained age 62, became disabled, or died) in b
1999 2000 2001 2002 2003 2004 2005 2006
1951 3,600 2,799.16 35,272.58 37,118.70 39,187.26 41,354.32 42,340.89 42,765.52 43,810.94 45,847.60
1952 3,600 2,973.32 33,206.52 34,944.50 36,891.90 38,932.02 39,860.80 40,260.56 41,244.74 43,162.12
1953 3,600 3,139.44 31,449.43 33,095.45 34,939.81 36,871.97 37,751.61 38,130.22 39,062.32 40,878.24
1954 3,600 3,155.64 31,287.98 32,925.55 34,760.44 36,682.69 37,557.81 37,934.47 38,861.79 40,668.38
1955 4,200 3,301.44 34,890.59 36,716.72 38,762.88 40,906.47 41,882.35 42,302.38 43,336.48 45,351.09
1956 4,200 3,532.36 32,609.70 34,316.45 36,228.85 38,232.30 39,144.39 39,536.96 40,503.46 42,386.37
1957 4,200 3,641.72 31,630.44 33,285.93 35,140.90 37,084.19 37,968.89 38,349.67 39,287.15 41,113.52
1958 4,200 3,673.80 31,354.24 32,995.28 34,834.05 36,760.37 37,637.34 38,014.80 38,944.09 40,754.51
1959 4,800 3,855.80 34,142.02 35,928.97 37,931.23 40,028.82 40,983.77 41,394.79 42,406.70 44,378.09
1960 4,800 4,007.12 32,852.72 34,572.19 36,498.84 38,517.22 39,436.11 39,831.61 40,805.31 42,702.25
1961 4,800 4,086.76 32,212.51 33,898.47 35,787.58 37,766.63 38,667.60 39,055.40 40,010.12 41,870.10
1962 4,800 4,291.40 30,676.42 32,281.99 34,081.01 35,965.68 36,823.70 37,193.00 38,102.20 39,873.48
1963 4,800 4,396.64 29,942.14 31,509.27 33,265.23 35,104.79 35,942.27 36,302.73 37,190.16 38,919.05
1964 4,800 4,576.32 28,766.52 30,272.12 31,959.14 33,726.47 34,531.07 34,877.38 35,729.97 37,390.97
1965 4,800 4,658.72 28,257.72 29,736.69 31,393.87 33,129.94 33,920.31 34,260.49 35,098.00 36,729.63
1966 6,600 4,938.36 36,654.19 38,572.62 40,722.21 42,974.15 43,999.36 44,440.62 45,526.99 47,643.43
1967 6,600 5,213.44 34,720.18 36,537.39 38,573.56 40,706.68 41,677.79 42,095.77 43,124.82 45,129.59
1968 7,800 5,571.76 38,394.12 40,403.61 42,655.24 45,014.07 46,087.95 46,550.16 47,688.09 49,905.00
1969 7,800 5,893.76 36,296.49 38,196.20 40,324.81 42,554.77 43,569.98 44,006.93 45,082.70 47,178.49
1970 7,800 6,186.24 34,580.42 36,390.32 38,418.29 40,542.82 41,510.02 41,926.32 42,951.23 44,947.93
1971 7,800 6,497.08 32,925.99 34,649.29 36,580.24 38,603.13 39,524.06 39,920.44 40,896.31 42,797.49
1972 9,000 7,133.80 34,600.63 36,411.58 38,440.74 40,566.51 41,534.28 41,950.83 42,976.33 44,974.20
1973 10,800 7,580.16 39,075.80 41,120.97 43,412.58 45,813.29 46,906.23 47,376.65 48,534.79 50,791.06
1974 13,200 8,030.76 45,079.57 47,438.97 50,082.67 52,852.24 54,113.10 54,655.80 55,991.88 58,594.81
1975 14,100 8,630.92 44,804.79 47,149.82 49,777.40 52,530.09 53,783.27 54,322.65 55,650.59 58,237.66
1976 15,300 9,226.48 45,479.73 47,860.08 50,527.24 53,321.39 54,593.45 55,140.96 56,488.90 59,114.94
1977 16,500 9,779.44 46,273.51 48,695.40 51,409.12 54,252.04 55,546.30 56,103.36 57,474.83 60,146.70
1978 17,700 10,556.03 45,987.00 48,393.90 51,090.81 53,916.13 55,202.38 55,756.00 57,118.98 59,774.30
1979 22,900 11,479.46 54,711.23 57,574.74 60,783.29 64,144.60 65,674.86 66,333.51 67,955.06 71,114.13
1980 25,900 12,513.46 56,765.55 59,736.58 63,065.60 66.553.12 68,140.84 68,824.22 70,506.65 73,784.34
1981 29,700 13,773.10 59,140.80 62,236.15 65,704.47 69,337.92 70,992.08 71,704.05 73,456.88 76,871.72
1982 32,400 14,531.34 61,150.75 64,351.30 67,937.49 71,694.43 73,404.81 74,140.98 75,953.38 79,484.27
1983 35,700 15,239.24 64,249.15 67,611.86 71,379.76 75,327.06 77,124.09 77,897.56 79,801.80 83,511.59
1984 37,800 16,135.07 64,251.52 67,614.36 71,382.40 75,329.84 77,126.94 77,900.44 79,804.74 83,514.68
1985 39,600 16,822.51 64,560.50 67,939.51 71,725.66 75,692.09 77,497.83 78,275.05 80,188.51 83,916.29
1986 42,000 17,321.82 66,499.48 69,979.97 73,879.84 77,965.39 79,825.37 80,625.93 82,596.86 86,436.59
1987 43,800 18,426.51 65,191.88 68,603.93 72,427.12 76,432.33 78,255.74 79,040.55 80,972.73 84,736.96
1988 45,000 19,334.04 63,834.05 67,175.03 70,918.59 74,840.38 76,625.81 77,394.28 79,286.21 82,972.04
1989 48,000 20,099.55 65,496.39 68,924.38 72,765.43 76,789.35 78,621.27 79,409.75 81,350.96 85,132.77
1990 51,300 21,027.98 66,908.65 70,410.56 74,334.42 78,445.11 80,316.54 81,122.02 83,105.08 86,968.44
1991 53,400 21,811.60 67,145.39 70,659.69 74,597.44 78,722.67 80,600.71 81,409.05 83,399.12 87,276.15
1992 55,500 22,935.42 66,366.48 69,840.01 73,732.08 77,809.45 79,665.71 80,464.67 82,431.66 86,263.71
1993 57,600 23,132.67 68,290.33 71,864.55 75,869.44 80,065.02 81,975.09 82,797.20 84,821.21 88,764.35
1994 60,600 23,753.53 69,969.20 73,631.30 77,734.65 82,033.37 83,990.39 84,832.72 86,906.49 90,946.57
1995 61,200 24,705.66 67,938.73 71,494.55 75,478.83 79,652.80 81,553.03 82,370.92 84,384.51 88,307.35
1996 62,700 25,913.90 66,358.60 69,831.72 73,723.33 77,800.22 79,656.26 80,455.12 82,421.88 86,253.48
1997 65,400 27,426.00 65,400.00 68,822.95 72,658.34 76,676.34 78,505.56 79,292.89 81,231.23 85,007.48
1998 68,400 28,861.44 68,400.00 68,400.00 72,211.82 76,205.13 78,023.11 78,805.60 80,732.03 84,485.07
1999 72,600 30,469.84 72,600.00 72,600.00 72,600.00 76,614.77 78,442.53 79,229.22 81,166.01 84,939.23
2000 76,200 32,154.82 76,200.00 76,200.00 76,200.00 76,200.00 78,017.86 78,800.29 80,726.60 84,479.39
2001 80,400 32,921.92 80,400.00 80,400.00 80,400.00 80,400.00 80,400.00 81,206.32 83,191.44 87,058.82
2002 84,900 33,252.09 84,900.00 84,900.00 84,900.00 84,900.00 84,900.00 84,900.00 86,975.41 91,018.70
2003 87,000 34,064.95 87,000.00 87,000.00 87,000.00 87,000.00 87,000.00 87,000.00 87,000.00 91,044.43
2004 87,900 35,648.55 87,900.00 87,900.00 87,900.00 87,900.00 87,900.00 87,900.00 87,900.00 87,900.00
2005 90,000 . . . 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00
2006 94,200 . . . 94,200.00 94,200.00 94,200.00 94,200.00 94,200.00 94,200.00 94,200.00 94,200.00
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTE: . . . = not available.
a. National average wage levels. For years before 1978, average wages were determined from wages earned during the first quarter of the year and reported to the Social Security Administration (SSA) for Social Security tax purposes. These wages were then multiplied by 4 to obtain the average wage for the year. For 1973–1977, from data collected on all taxable wages reported to SSA; for 1957–1972, based on 1 percent statistical sample; for 1951–1956, based on 1/10 of 1 percent statistical sample. For 1978–1984, from wage data collected by the Internal Revenue Service during processing of annual tax returns. For years after 1984, from W-2 data processed by SSA. For years after 1977, the average wage amounts have been adjusted to be consistent with the pre-1978 series.
b. A worker's earnings for each year after 1950 and through the second year before the year of first eligibility are indexed by multiplying covered earnings, up to the maximum taxable amounts, by specified indexing factors (see Table 2.A8). The indexing factor for a given year represents the ratio of the average annual wage for the second year before the year of first eligibility to the average annual wage for the year to be indexed. For example, if the year of first eligibility is 1999, the indexing factor for 1982 is $27,426.00/14,531.34, or 1.8873690. Multiplication of maximum taxable earnings of $32,400 for 1982 by this factor gives maximum indexed earnings of $61,150.75 for 1982.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A10 Average monthly wage and average indexed monthly earnings provisions by year enacted
Year enacted Provision
Average monthly wage (AMW)
1939 Computed using creditable earnings after 1936 and before year of death or retirement, divided by months after 1936 and before quarter of death or retirement, excluding months before age 22 in quarters not covered.
1950 Alternatively, computed using creditable earnings after 1950 (or year aged 21, if later) and before year of death, year of retirement, or subsequent year (or year age 65 attained if then insured), divided by number of months in those years.
1954 Earnings and months in 4 years may be excluded in all cases; 5 years if worker has 20 quarters of coverage. Period of disability may be excluded.
1956 Earnings and months in 5 years may be excluded in all cases. Computation period may end at age 62 for women then insured.
1960 Earnings may be used for any year after 1950 and before year of retirement but including year of death, with the number of years equal to the years elapsed after 1955 (or year age 26 attained) and before year of death or age 65 attained (62 for women).
Same method may be used for earnings after 1936 and years elapsed after 1941.
1972 Number of years for men reaching age 62 after 1972, measured to age 62 or to 1975, if later.
1977 For workers who attain age 62, become disabled, or die after 1978, excludes earnings in year of attainment of age 62 and later, computed using creditable earnings after 1936.
For workers who attain age 62 after 1978 and before 1984, excludes earnings in year of attainment of age 62 and later, computed using creditable earnings after 1950.
Average indexed monthly earnings (AIME)
1977 For workers who attain age 62, become disabled, or die after 1978, AIME is computed by using indexed earnings after 1950 for the same computation period applicable in calculating the AMW. Indexed earnings for a given year equal actual creditable earnings multiplied by the national average wage for the second year before worker attains age 62, becomes disabled, or dies, divided by the national average wage for the given year, except that for years after the second year before the worker attains age 62, becomes disabled, or dies, indexed earnings equal actual creditable earnings.
1980 For disabled workers, the number of years of earnings used equals the number of years elapsed after 1950 (or year age 21 attained, if later) and before year of disability, minus dropout years equal to one-fifth of the number of elapsed years rounded to the next lower integer (to a maximum of 5 dropout years). However, the number of years of earnings used is at least 2. Effective for initial entitlement after June 1980.
Disabled workers with computations using fewer than 3 dropout years under the one-fifth rule may be credited with additional dropout years based on child care, up to a total of 3 dropout years. (To receive this credit, a worker must have had no earnings in that year and have been living with his or her child or spouse's child under age 3.) However, the number of years of earnings used is at least 2. Effective July 1981.
1983 For workers who die after 1978 but before attaining age 62, indexed earnings for a given year equal actual creditable earnings, multiplied by the national average wage for the earlier of (1) the year in which the worker reached or would have reached age 60 or (2) the second year before the survivor becomes eligible for aged or disabled widow(er) benefits, and then divided by the national average wage for the given year. This computation method applies only if it results in a higher benefit. Effective for surviving spouses first eligible after 1984.
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A11 Formulas for computing PIA from AIME, cost-of-living adjustments, and minimum PIA for workers who were first eligible in 1979 or later, by year of first eligibility
Eligibility year Calculation of PIA (based on percentage of AIMEa (dollars) First applicable cost-of-living adjustment Minimum
PIA based
on indexed
earnings
(dollars)
90 percent
of the first
Plus
32 percent
of the next
Plus
15 percent
of the amount above
Effective
date
Percentage
increase
Enacted in 1977 b
1979 180 905 1,085 June 1979 9.9 122 c
1980 194 977 1,171 June 1980 14.3 122 c
Enacted in 1981
1981 211 1,063 1,274 June 1981 11.2 122 c
1982 230 1,158 1,388 June 1982 7.4 d
Enacted in 1983
1983 254 1,274 1,528 December 1983 3.5 d
1984 267 1,345 1,612 December 1984 3.5 d
1985 280 1,411 1,691 December 1985 3.1 d
1986 297 1,493 1,790 December 1986 1.3 d
1987 310 1,556 1,866 December 1987 4.2 d
1988 319 1,603 1,922 December 1988 4.0 d
1989 339 1,705 2,044 December 1989 4.7 d
1990 356 1,789 2,145 December 1990 5.4 d
1991 370 1,860 2,230 December 1991 3.7 d
1992 387 1,946 2,333 December 1992 3.0 d
1993 401 2,019 2,420 December 1993 2.6 d
1994 422 2,123 2,545 December 1994 2.8 d
1995 426 2,141 2,567 December 1995 2.6 d
1996 437 2,198 2,635 December 1996 2.9 d
1997 455 2,286 2,741 December 1997 2.1 d
1998 477 2,398 2,875 December 1998 1.3 d
1999 505 2,538 3,043 December 1999 2.5 e d
2000 531 2,671 3,202 December 2000 3.5 d
2001 561 2,820 3,381 December 2001 2.6 d
2002 592 2,975 3,567 December 2002 1.4 d
2003 606 3,047 3,653 December 2003 2.1 d
2004 612 3,077 3,689 December 2004 2.7 d
2005 627 3,152 3,779 December 2005 4.1 d
2006 656 3,299 3,955 December 2006 . . . d
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTES: Eligible workers are those who attained age 62, became disabled, or died in the given year.
AIME = average indexed monthly earnings; AMW =average monthly wage; PIA = primary insurance amount; . . . = not available.
a. For workers who attained age 62 in the 1979–1983 period, the PIA cannot be less than that derived from the PIA table in effect in December 1978 (approximated by the PIA formula in Table 2.A16) in the basis of provisions in effect before 1979 but excluding earnings after year aged 61 in computations of AMW and including any general benefit increase after year aged 61.
b. The amendments in 1977 provided for annual automatic adjustments of bend points (AIME brackets) in benefit formula in proportion to increases in average wage level. As a result, separate formulas are applicable to workers who were first eligible in successive calendar years. The legislation also froze the minimum PIA at $122.
c. Not subject to automatic adjustments until earlier of year of attainment of age 65 or year of first receipt of benefits.
d. In 1981, legislation eliminated the minimum PIA for workers who attain age 62 or die after 1981 (after 1991 for members of certain religious orders). In August 1981, legislation would have eliminated the minimum PIA effective March 1982 for workers who attained age 62 before November 1981 or who died (before attaining age 62) before March 1982; for all others, the minimum would have been eliminated effective November 1981. This legislation was superseded in December 1981 by legislation that restored the minimum PIA for workers who attained age 62 or died (before attaining age 62) before 1982.
e. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A11.1 Computation of PIA based on Windfall Elimination Provision (WEP), by year enacted
Year effective Provision
Enacted in 1983
1986 Workers first eligible for pensions based on noncovered employment and disability or retired workers after December 31, 1985.a The benefit computation formula uses a reduced factor of the usual first AIME bend point.
Year
eligible
Factor
(percent)
1986 80
1987 70
1988 60
1989 50
1990 and later 40
 
WEP is not applicable to persons who were federal employees or nonprofit employees on January 1, 1984, and who were covered by Social Security on that date with no Civil Service Retirement System coverage; to persons with Railroad Retirement pensions; or to workers with 30 years of substantial Social Security earnings. Workers with 26–29 years of coverage have less than full WEP applied.b For benefits payable before January 1989:
Years of
coverage
Factor
(percent)
26 50
27 60
28 70
29 80
 
Enacted in 1988
1989 5 percent added to factor for each year of coverage over 20.
Years of
coverage
Factor
(percent)
21 45
22 50
23 55
24 60
25 65
26 70
27 75
28 80
29 85
 
1991 Earnings required for a year of substantial coverage (decoupled from the definition of a year of coverage for special minimum PIA).b
Year Earnings
(dollars)
1991 9,900
1992 10,350
1993 10,725
1994 11,250
1995 11,325
1996 11,625
1997 12,150
1998 12,675
1999 13,425
2000 14,175
2001 14,925
2002 15,750
2003 16,125
2004 16,275
2005 16,725
2006 17,475
 
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
a. Reduction in PIA will not be greater than one-half the amount of the pension based on noncovered employment performed after 1956.
b. See Table 2.A12. Before 1991, a year of substantial coverage for WEP was the same amount as for the minimum PIA (25 percent of the "old law" contribution and benefit base). For 1991 and following, a year of substantial coverage under WEP provisions remains 25 percent of the old law base, while the criterion for computing the special minimum PIA was changed to 15 percent of the base.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A12 Special minimum PIA (formula applies to years of coverage), by year enacted
Year enacted Number of years of coverage PIA computation
1972 For 1937–1950, the number (disregarding any remainder and not exceeding 14) obtained by dividing total creditable wages in 1937–1950 by $900
Effective date Amount a per year of coverage over 10 years (dollars) Maximum amount a for workers with 30 or more years of coverage (dollars)
January 1973 8.50 170.00
 
After 1950, the number of years with creditable earnings equal to at least 25 percent of the effective annual maximum taxable earnings, that is:
Year Amount
(dollars)
1951–1954 900
1955–1958 1,050
1959–1965 1,200
1966–1967 1,650
1968–1971 1,950
1972 2,250
1973 2,700
1974 3,300
1975 3,525
1976 3,825
1977 4,125
1978 4,425
 
1973 . . .
Effective date Amount a per year of coverage over 10 years (dollars) Maximum amount a for workers with 30 or more years of coverage (dollars)
March 1974 9.00 180.00
 
1977 b After 1978, the number of years with creditable earnings equal to at least 25 percent of what the annual taxable maximum would have been if the statutory increases in the maximum under the 1977 amendments had not been enacted (the "old law" contribution and benefit base), that is:
Year Amount
(dollars)
1979 4,725
1980 5,100
1981 5,550
1982 6,075
1983 6,675
1984 7,050
1985 7,425
1986 7,875
1987 8,175
1988 8,400
1989 8,925
1990 9,525
 
Effective date Amount a per year of coverage over 10 years (dollars) Maximum amount a for workers with 30 or more years of coverage (dollars)
January 1979 11.50 230.00
June 1979 12.64 c 252.80
June 1980 14.45 c 289.00
June 1981 16.07 c 321.40
June 1982 17.26 c 345.10
December 1983 17.86 c 357.10
December 1984 18.49 c 369.50
December 1985 19.06 c 380.90
December 1986 19.31 c 385.80
December 1987 20.12 c 402.00
December 1988 20.92 c 418.00
December 1989 21.90 c 437.60
December 1990 23.08 c 461.20
December 1991 23.93 c 478.20
December 1992 24.65 c 492.50
December 1993 25.29 c 505.30
December 1994 26.00 c 519.40
December 1995 26.68 c 532.90
December 1996 27.45 c 548.30
December 1997 28.03 c 559.80
December 1998 28.39 c 567.00
December 1999 29.10 c,d 581.10 d
December 2000 30.12 c 601.40
December 2001 30.90 c 617.00
December 2002 31.33 c 625.60
December 2003 31.99 c 638.70
December 2004 32.85 c 655.90
December 2005 34.20 c 682.70
 
1990 After 1990, the number of years with creditable earnings equal to at least 15 percent of what the annual taxable maximum would have been if the statutory increases in the maximum under the 1977 amendments had not been enacted (the "old law" contribution and benefit base), that is:
Year Amount
(dollars)
1991 5,940
1992 6,210
1993 6,435
1994 6,750
1995 6,795
1996 6,975
1997 7,290
1998 7,605
1999 8,055
2000 8,505
2001 8,955
2002 9,450
2003 9,675
2004 9,765
2005 10,035
2006 10,485
 
. . .
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTES: Alternative PIA applicable when it exceeds the regularly computed PIA. The usual rates of actuarial reduction apply for retirement before the full retirement age. No delayed retirement credits are applicable to the benefit derived from the special minimum PIA. However, the resulting retirement benefit will be raised if necessary to equal the benefit derived from the regularly computed PIA plus any delayed retirement credits.
. . . = not applicable.
a. The amount effective for a given month applies, as of that month, to all workers from the date of entitlement to benefits.
b. Provision for future automatic cost-of-living increases of amount per year of coverage (and maximum amount), beginning with the June 1979 increase.
c. Factors were obtained by applying cost-of-living increases to initial 1979 factor of $11.50 and rounding each one to nearest cent. An approximate PIA may be computed by multiplying factor in year of entitlement by the number of years of coverage in excess of 10 with a maximum of 20. Actual PIAs are published yearly in the Federal Register.
d. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
e. For 1991 and following, a year of substantial coverage under the Windfall Elimination Provision remains 25 percent of the old law base, while the criterion for the special minimum PIA was changed to 15 percent of the base.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A13 Formulas enacted in 1977 for computing OASI maximum family benefit from PIA and cost-of-living adjustments for workers who were first eligible in 1979 or later, by year of first eligibility
Eligibility year Calculation of maximum family benefit
(based on percentage of PIA) (dollars)
First applicable
cost-of-living adjustment
150 percent
of the first
Plus
272 percent
of the next
Plus
134 percent
of the next
Plus
175 percent
of the amount above
Effective
date
Percentage
increase
1979 230 102 101 433 June 1979 9.9
1980 248 110 109 467 June 1980 14.3
1981 270 120 118 508 June 1981 11.2
1982 294 131 129 554 June 1982 7.4
1983 324 144 142 610 December 1983 3.5
1984 342 151 150 643 December 1984 3.5
1985 358 159 158 675 December 1985 3.1
1986 379 169 166 714 December 1986 1.3
1987 396 175 174 745 December 1987 4.2
1988 407 181 179 767 December 1988 4.0
1989 433 193 190 816 December 1989 4.7
1990 455 201 200 856 December 1990 5.4
1991 473 209 208 890 December 1991 3.7
1992 495 219 217 931 December 1992 3.0
1993 513 227 226 966 December 1993 2.6
1994 539 240 237 1,016 December 1994 2.8
1995 544 241 239 1,024 December 1995 2.6
1996 559 247 246 1,052 December 1996 2.9
1997 581 258 255 1,094 December 1997 2.1
1998 609 271 267 1,147 December 1998 1.3
1999 645 286 283 1,214 December 1999 2.5 a
2000 679 301 298 1,278 December 2000 3.5
2001 717 317 315 1,349 December 2001 2.6
2002 756 336 332 1,424 December 2002 1.4
2003 774 344 340 1,458 December 2003 2.1
2004 782 347 343 1,472 December 2004 2.7
2005 801 355 352 1,508 December 2005 4.1
2006 838 372 368 1,578 December 2006 . . .
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found on the Social Security Program Rules page. Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTES: The 1977 amendments provided for annual automatic adjustments of bend points (PIA brackets) in the maximum family benefit formula in proportion to increases in the average wage level. As a result, separate formulas are applicable to workers first eligible in successive calendar years.
Eligible workers are those who attained age 62 or died in the given year.
. . . = not available.
a. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A14 Formulas for computing maximum family benefit and cost-of-living adjustments for workers first eligible for disability benefits in 1979 or later, by year of enactment
Eligibility year Formula
Enacted in 1977 a
1979 b 150% of first $230 of PIA + 272% of next $102 of PIA + 134% of next $101 of PIA + 175% of PIA over $433 c
1980 b 150% of first $248 of PIA + 272% of next $110 of PIA + 134% of next $109 of PIA + 175% of PIA over $467 c
Enacted in 1980 d
1979 or later Smaller of (1) 85% of the AIME (or 100% of PIA, if larger) and (2) 150% of PIA e
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page (http://www.socialsecurity.gov/regulations/index.htm). Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
a. The 1977 amendments provided for annual automatic adjustments of bend points (PIA brackets) in maximum family benefit formula in proportion to increases in average wage level. As a result, separate formulas are applicable to workers first eligible in successive calendar years.
b. Applicability of formula limited to workers with initial entitlement before July 1980, as a result of 1980 amendments.
c. Calculated amount subject to cost-of-living adjustments beginning with the one effective for June of the year of first eligibility.
d. Formula for computing maximum family benefit revised effective for workers with initial entitlement in or after July 1980. New formula remains unchanged for workers eligible in successive calendar years because it has no bend points requiring adjustments.
e. Calculated amount subject to cost-of-living adjustments beginning with the one effective in year of first eligibility (or in 1981, if later).
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A16 Percentage of average monthly wage (AMW) applicable to primary insurance amount (PIA) based on formula for computing PIA from AMW, and percentage increases in PIA
AMW (dollars) April
1952
September
1952
September
1954
January
1959
January
1965
February
1968
January
1970
January
1971
September
1972
June
1974
June
1975
June
1976
June
1977
June
1978
June
1979
June
1980
June
1981
June
1982
Dec.
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
1987
Dec.
1988
Dec.
1989
Dec.
1990
Dec.
1991
Dec.
1992
Dec.
1993
Dec.
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
1998
Dec.
1999
Dec.
2000
Dec.
2001
Dec.
2002
Dec.
2003
Dec.
2004
Dec.
2005
First 110 50.00 a 55.00 a 55.00 58.85 62.97 71.16 81.83 90.01 108.01 119.89 129.48 137.77 145.90 155.38 170.76 195.18 217.04 233.10 241.26 249.70 257.44 260.79 271.74 282.61 295.89 311.87 323.41 333.11 341.77 351.34 360.47 370.93 378.72 383.64 393.23 407.00 417.58 423.43 432.32 443.99 462.19
Next 290 15.00 b 15.00 b 20.00 c 21.40 22.90 25.88 29.76 32.74 39.29 43.61 47.10 50.10 53.06 56.51 62.10 70.98 78.93 84.77 87.74 90.81 93.62 94.84 98.82 102.77 107.60 113.42 117.62 121.15 124.30 127.78 131.10 134.90 137.73 139.52 143.01 148.02 151.87 153.99 157.23 161.47 168.09
Next 150 . . . . . . . . . . . . 21.40 24.18 27.81 30.59 36.71 40.75 44.01 46.82 49.58 52.81 58.04 66.34 73.77 79.23 82.00 84.87 87.50 88.64 92.36 96.05 100.56 105.99 109.91 113.21 116.15 119.40 122.50 126.06 128.71 130.38 133.64 138.32 141.91 143.90 146.92 150.89 157.08
Next 100 . . . . . . . . . . . . . . . 28.43 32.69 35.96 43.15 47.90 51.73 55.05 58.30 62.09 68.24 78.00 86.74 93.16 96.42 99.79 102.88 104.22 108.60 112.94 118.25 124.64 129.25 133.13 136.59 140.41 144.06 148.24 151.35 153.32 157.15 162.65 166.88 169.22 172.77 177.44 184.71
Next 100 . . . . . . . . . . . . . . . . . . . . . 20.00 24.00 26.64 28.77 30.61 32.42 34.53 37.95 43.38 48.24 51.81 53.62 55.50 57.22 57.96 60.39 62.81 65.76 69.31 71.87 74.03 75.95 78.08 80.11 82.43 84.16 85.26 87.39 90.45 92.80 94.10 96.07 98.67 102.71
Next 250 . . . . . . . . . . . . . . . . . . . . . . . . 20.00 d 22.20 23.98 25.51 27.02 28.78 31.63 36.15 40.20 43.17 44.68 46.24 47.67 48.29 50.32 52.33 54.79 57.75 59.89 61.69 63.29 65.06 66.75 68.69 70.13 71.04 72.82 75.37 77.33 78.41 80.06 82.22 85.59
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 e 21.60 22.98 24.34 25.92 28.49 32.56 36.21 38.89 40.25 41.66 42.95 43.51 45.34 47.15 49.37 52.04 53.97 55.59 57.04 58.64 60.16 61.91 63.21 64.03 65.63 67.93 69.70 70.67 72.16 74.10 77.14
Next 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.28 22.54 24.01 26.39 30.16 33.54 36.02 37.28 38.58 39.78 40.30 41.99 43.67 45.72 48.19 49.97 51.47 52.81 54.29 55.70 57.32 58.52 59.28 60.77 62.89 64.53 65.43 66.81 68.61 71.42
Next 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.18 22.56 24.79 28.33 31.50 33.83 35.01 36.24 37.36 37.85 39.44 41.02 42.95 45.27 46.94 48.35 49.61 51.00 52.33 53.84 54.97 55.69 57.08 59.08 60.61 61.46 62.75 64.44 67.09
Next 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.30 23.41 26.76 29.76 31.96 33.08 34.24 35.30 35.76 37.26 38.75 40.57 42.76 44.34 45.67 46.86 48.17 49.42 50.86 51.93 52.60 53.92 55.81 57.26 58.06 59.28 60.88 63.37
Next 435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.98 25.12 27.93 30.00 31.05 32.14 33.14 33.57 34.98 36.38 38.09 40.15 41.64 42.89 44.01 45.24 46.42 47.76 48.76 49.40 50.63 52.40 53.77 54.52 55.66 57.17 59.51
Next 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 22.86 25.42 27.30 28.26 29.25 30.16 30.55 31.83 33.10 34.66 36.53 37.88 39.02 40.03 41.15 42.22 43.44 44.35 44.93 46.05 47.66 48.90 49.59 50.63 52.00 54.13
Next 315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 22.24 23.89 24.73 25.60 26.39 26.73 27.85 28.96 30.32 31.96 33.14 34.13 35.02 36.00 36.94 38.01 38.81 39.31 40.30 41.71 42.79 43.39 44.30 45.50 47.36
Next 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.48 22.23 23.01 23.72 24.03 25.04 26.04 27.26 28.73 29.79 30.68 31.48 32.36 33.20 34.16 34.88 35.33 36.21 37.48 38.46 38.99 39.81 40.89 42.56
Next 275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.70 21.42 22.08 22.37 23.31 24.24 25.38 26.75 27.74 28.57 29.31 30.13 30.91 31.81 32.48 32.90 33.72 34.90 35.81 36.31 37.07 38.08 39.64
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.70 21.34 21.62 22.53 23.43 24.53 25.85 26.81 27.61 28.33 29.12 29.88 30.74 31.39 31.79 32.59 33.73 34.61 35.09 35.83 36.79 38.30
Next 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.63 20.90 21.78 22.65 23.71 24.99 25.91 26.69 27.38 28.15 28.88 29.72 30.34 30.74 31.51 32.61 33.46 33.93 34.64 35.57 37.03
Next 200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.26 21.11 21.95 22.98 24.22 25.12 25.87 26.54 27.28 27.99 28.80 29.40 29.79 30.53 31.60 32.42 32.88 33.57 34.47 35.89
Next 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.84 21.67 22.69 23.92 24.81 25.55 26.21 26.94 27.64 28.44 29.04 29.41 30.15 31.21 32.02 32.46 33.15 34.04 35.44
Next 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.80 21.78 22.96 23.81 24.52 25.16 25.86 26.53 27.30 27.87 28.24 28.94 29.95 30.73 31.16 31.82 32.68 34.02
Next 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.94 22.07 22.89 23.58 24.19 24.87 25.52 26.26 26.81 27.16 27.84 28.81 29.56 29.98 30.61 31.43 32.72
Next 275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 21.08 21.86 22.52 23.11 23.76 24.38 25.08 25.61 25.94 26.59 27.52 28.23 28.63 29.23 30.02 31.25
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.74 21.36 21.92 22.53 23.12 23.79 24.29 24.61 25.22 26.10 26.78 27.16 27.73 28.48 29.64
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.60 21.14 21.73 22.29 22.94 23.42 23.73 24.32 25.17 25.82 26.19 26.74 27.46 28.58
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.52 21.09 21.64 22.27 22.74 23.03 23.61 24.44 25.07 25.42 25.96 26.66 27.75
Next 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.56 21.09 21.71 22.17 22.45 23.02 23.82 24.44 24.78 25.30 25.99 27.05
Next 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.52 21.12 21.56 21.84 22.39 23.17 23.78 24.11 24.62 25.28 26.32
Next 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.58 21.01 21.29 21.82 22.58 23.17 23.49 23.99 24.63 25.64
Next 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.42 20.69 21.20 21.94 22.52 22.83 23.31 23.94 24.92
Next 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.26 20.77 21.49 22.05 22.36 22.83 23.45 24.41
Next 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.50 21.22 21.77 22.07 22.54 23.15 24.09
Next 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.70 21.24 21.54 21.99 22.58 23.51
Next 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.52 20.81 21.24 21.82 22.71
Next 375 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.28 20.71 21.26 22.14
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.42 20.97 21.83
Next 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.54 21.38
Next 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00 20.82
Next 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Percentage increase in PIA 77.0 f 12.5 g 13.0 h 7.0 i 7.0 j 13.0 15.0 10.0 20.0 11.0 k 8.0 l 6.4 5.9 6.5 9.9 14.3 11.2 7.4 3.5 3.5 3.1 1.3 4.2 4.0 4.7 5.4 3.7 3.0 2.6 2.8 2.6 2.9 2.1 1.3 2.5 m 3.5 2.6 1.4 2.1 2.7 4.1
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page (http://www.socialsecurity.gov/regulations/index.htm). Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTE: The average monthly wage (AMW) computation is based on earnings after 1950. The amounts shown in the table are percentages of the AMW.
. . . = not applicable.
a. Applied to first $100 of AMW.
b. Applied to next $200 of AMW.
c. Applied to next $190 before 1955 and to next $240 effective for January 1955.
d. Applied to next $150 effective for January 1973 and to next $350 effective for January 1974.
e. Applied to next $100 before January 1975.
f. Average increase in benefits of about 77 percent—from 100 percent at the lowest level to 50 percent at the highest level.
g. Increase of 12.5 percent or $5, if larger.
h. Average increase of about 13 percent, with minimum increase of $5.
i. Increase of 7 percent or $3, if larger.
j. Increase of 7 percent or $4, if larger.
k. Increase effective in two steps: 7 percent for March–May and 4 percent for June.
l. Beginning June 1975, all benefit increases are based on automatic cost-of-living adjustments.
m. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A17 Minimum primary insurance amount (PIA) and maximum family benefit for workers who attained age 62, were first eligible for disabled-worker benefits, or died before 1979
Year enacted Effective date Minimum PIA a (dollars) Maximum family benefit
Percentage of AMW Not less than—
1935 . . . 10.00 . . . . . .
1939 . . . . . . Lesser of 80%, $85, or 200% of PIA $20.00
1950 September 1950 20.00 80% of first $187.50 $40.00
1952 September 1952 25.00 80% of first $210.93 $45.00
1954 September 1954 30.00 80% of first $250 $50.00 or 150% of PIA
1958 January 1959 33.00 80% of first $317.50 $20.00 + PIA or 150% of PIA
1961 August 1961 40.00 80% of first $317.50 150% of PIA
1965 January 1965 44.00 80% of first $370 + 40% of next $180 150% of PIA
1967 February 1968 55.00 80% of first $436 + 40% of next $214 150% of PIA
1969 January 1970 64.00 80% of first $436 + 40% of next $180 150% of PIA
1971 January 1971 70.40 88% of first $436 + 44% of next $191 b 150% of PIA
1972 September 1972 84.50 105.6% of first $436 + 52.8% of next $191 b 150% of PIA
1973 c June 1974 89.50 111.8% of first $436 + 55.9% of next $191 b 150% of PIA
1973 d March 1974 90.50 113.0% of first $436 + 56.5% of next $191 b 150% of PIA
June 1974 93.80 117.2% of first $436 + 58.6% of next $191 b 150% of PIA
June 1975 101.40 126.6% of first $436 + 63.3% of next $191 b 150% of PIA
June 1976 107.90 134.7% of first $436 + 67.3% of next $191 b 150% of PIA
June 1977 114.30 142.6% of first $436 + 71.3% of next $191 b 150% of PIA
June 1978 121.80 151.9% of first $436 + 76.0% of next $191 b 150% of PIA
June 1979 133.90 167.0% of first $436 + 83.5% of next $191 b 150% of PIA
June 1980 153.10 190.9% of first $436 + 95.4% of next $191 b 150% of PIA
June 1981 170.30 212.2% of first $436 + 106.1% of next $191 b 150% of PIA
1981 e March 1982 f 190.9% of first $436 + 106.1% of next $191 b 150% of PIA
1981 June 1982 182.90 227.9% of first $436 + 114.0% of next $191 b 150% of PIA
December 1983 189.30 235.9% of first $436 + 118.0% of next $191 b 150% of PIA
December 1984 195.90 244.2% of first $436 + 122.1% of next $191 b 150% of PIA
December 1985 201.90 251.8% of first $436 + 125.9% of next $191 b 150% of PIA
December 1986 204.50 255.1% of first $436 + 127.5% of next $191 b 150% of PIA
December 1987 213.00 265.8% of first $436 + 132.9% of next $191 b 150% of PIA
December 1988 221.50 276.4% of first $436 + 138.2% of next $191 b 150% of PIA
December 1989 231.90 289.4% of first $436 + 144.7% of next $191 b 150% of PIA
December 1990 244.40 305.0% of first $436 + 152.5% of next $191 b 150% of PIA
December 1991 253.40 316.3% of first $436 + 158.1% of next $191 b 150% of PIA
December 1992 261.00 325.8% of first $436 + 162.8% of next $191 b 150% of PIA
December 1993 267.70 334.3% of first $436 + 167.0% of next $191 b 150% of PIA
December 1994 275.10 343.7% of first $436 + 171.7% of next $191 b 150% of PIA
December 1995 282.20 352.6% of first $436 + 176.2% of next $191 b 150% of PIA
December 1996 290.30 362.8% of first $436 + 181.3% of next $191 b 150% of PIA
December 1997 296.30 370.4% of first $436 + 185.1% of next $191 b 150% of PIA
December 1998 300.10 375.2% of first $436 + 187.5% of next $191 b 150% of PIA
December 1999 g 307.60 384.6% of first $436 + 192.2% of next $191 b 150% of PIA
December 2000 318.30 398.1% of first $436 + 198.9% of next $191 b 150% of PIA
December 2001 326.50 408.5% of first $436 + 204.1% of next $191 b 150% of PIA
December 2002 331.00 414.2% of first $436 + 206.9% of next $191 b 150% of PIA
December 2003 337.90 422.9% of first $436 + 211.2% of next $191 b 150% of PIA
December 2004 347.00 434.3% of first $436 + 216.9% of next $191 b 150% of PIA
December 2005 361.20 452.1% of first $436 + 225.8% of next $191 b 150% of PIA
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page (http://www.socialsecurity.gov/regulations/index.htm). Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTE: AMW = average monthly wage; . . . = not applicable.
a. Based on earnings; subject to reduction if claimed before age 65.
b. For AMW of $628 or more, 175 percent of PIA.
c. Superseded by legislation in 1973.
d. Beginning in 1975, minimum PIA and percentages in maximum family benefit formula are subject to automatic cost-of-living increases. (Superseded legislation in 1972 for automatic increases beginning in 1974.)
e. Superseded by legislation in 1981 that restored the minimum PIA for these groups.
f. Minimum PIA eliminated by legislation in 1981.
g. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A17.1 Full retirement age and maximum reduction of retired-worker benefits, by year of birth
Year of birth a Year of
attainment
of age 62
Year of
attainment
of age 65
Full retirement age Maximum
reduction
months
Maximum
reduction
at age 62 b
1935 1997 2000 65 years 36 0.2000000
1936 1998 2001 65 years 36 0.2000000
1937 1999 2002 65 years 36 0.2000000
1938 2000 2003 65 years and 2 months 38 0.2083333
1939 2001 2004 65 years and 4 months 40 0.2166667
1940 2002 2005 65 years and 6 months 42 0.2250000
1941 2003 2006 65 years and 8 months 44 0.2333333
1942 2004 2007 65 years and 10 months 46 0.2416667
1943–1954 2005–2016 2008–2019 66 years 48 0.2500000
1955 2017 2020 66 years and 2 months 50 0.2583333
1956 2018 2021 66 years and 4 months 52 0.2666667
1957 2019 2022 66 years and 6 months 54 0.2750000
1958 2020 2023 66 years and 8 months 56 0.2833333
1959 2021 2024 66 years and 10 months 58 0.2916667
1960 or later 2022 and later 2025 and later 67 years 60 0.3000000
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page.
a. If birthday is January 1, refer to previous year.
b. The monthly reduction factor is 0.0055556 for the first 36 months and 0.0041667 for additional months.
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A18 Automatic adjustment provisions
Year enacted Provision
Quarter of coverage
1977 Mandatory annual determination, beginning in 1978, as to whether an adjustment is required in the amount of wages and self-employment earnings an individual needs in order to be credited with a quarter of coverage (QC) in the succeeding year. The amount required for a QC is the product of $250 (in effect in 1978) multiplied by the following quotient: the national average wage for the year before the year of determination, divided by the average wage for 1976 (see Table 2.A8 for average annual wages after 1950). The resulting product, rounded to the nearest multiple of $10, is the new amount required for a QC. In no case, however, is the new amount reduced below the amount in effect in the year of determination.
Maximum amount of taxable and creditable earnings
1972 The 1972 Act (as modified by the legislation in 1973) mandated a determination in 1974, and in every subsequent year in which a cost-of-living benefit increase is established, as to whether an adjustment is required in the maximum amount of annual earnings that will be taxed and credited toward benefits.
The determination in the years after 1975 is made by multiplying the "maximum" in effect in the year of determination by the following quotient: the national average wage for the year before the year of determination, divided by the average wage for the year before the most recent year in which an automatic determination was made that resulted in an increase or in which an increase in the maximum was enacted. (See Table 2.A8 for annual amounts of the average wage after 1950). The resulting product, rounded to the nearest multiple of $300, is the new maximum amount of taxable and creditable earnings, effective with respect to remuneration paid after the year of determination and with respect to taxable years beginning after that year. In no case, however, is the maximum reduced to an amount below the maximum in the year of determination.
1976 In the 1974 and 1975 determinations, the quotient was the average wage for the year of determination, estimated from data for the first calendar quarter, divided by the corresponding amount for the year before the year of determination. Public Law (P.L.) 94-202 (signed January 2, 1976) revised the adjustment method by increasing by a year the lag in average wages used in the computation. Thus, for example, the determination in 1976 was based on the percentage increase in the average wage from 1974 to 1975.
1977 Statutory in lieu of automatic increases in the maximum instituted for 1979, 1980, and 1981. Also, for purposes of establishing a "year of coverage" used in the computation of the special minimum primary insurance amount PIA, annual maximum taxable and creditable earnings after 1978 are the amounts that would have been determined under the automatic adjustment provisions if the statutory increases in the maximum under the 1977 Act had not been enacted (see Table 2.A12).
1989 Automatic increases in the maximum for 1990, 1991, and 1992 determined under a transitional rule, specified by the Omnibus Budget Reconciliation Act of 1989, for computing "deemed" average annual wage for 1988, 1989, and 1990. The purpose of the legislation was to include contributions to certain "deferred compensation" plans, most importantly section 401(k) pension plans, in the average annual average wage.
1994 The determination for years after 1994 is made by multiplying $60,600, the "maximum" for 1994, by the following quotient: the national average wage index for the year before the year in which the determination is made, divided by the national average wage index for 1992. (See Table 2.A8 for annual amounts of the national average wage index.) The resulting product, rounded to the nearest $300, is the new maximum amount of taxable and creditable earnings, effective with respect to remuneration paid in (and taxable years beginning in) the year following the year the determination is made. In no case, however, is the new maximum reduced to an amount below the maximum in the year of determination.
Benefits
Computation
1977 New benefit computation method based on average indexed monthly earnings (AIME) after 1950, effective for workers first eligible after 1978. Provision for automatic adjustment of the dollar amounts, or bend points, defining (1) the AIME brackets in the PIA formula (see Table 2.A11) and (2) the PIA brackets in the maximum family benefit formula (see Table 2.A13). New bend points are established by multiplying the bend points in effect in 1979—$180 and $1,085 for the PIA formula and $230, $332, and $433 for the maximum family benefit formula—by the following quotient: the national average wage for the second year before the year for which the determination was made, divided by the average wage for 1977 (see Table 2.A8 for average annual wages after 1950). The resulting products, rounded to the nearest dollar, are the new bend points.
1980 Modified maximum family benefit formula applicable to workers with initial entitlement to disability benefits in or after July 1980 (see Table 2.A14). New formula for disabled workers has no bend points subject to automatic adjustment.
Cost-of-living increase
1972 Under the original provisions (based on 1972 and 1973 legislation), the arithmetical mean of the consumer price index (CPI) for January, February, and March in the year of determination was compared with the arithmetical mean of the CPI for the later of (a) January, February, and March of the year in which the last effective cost-of-living increase was established or (b) the 3 months of the calendar quarter in which the effective month of the last general benefit increase occurred. (Before the introduction, in 1977, of the alternative CPI series for "all urban consumers," or the CPI-U, the CPI-W was referred to as the CPI.) If the percentage increase in the CPI, rounded to the nearest one-tenth of 1 percent, was at least 3.0 (the triggering requirement), a cost-of-living benefit increase was established and the level of benefits was increased by the same percentage, effective for June of the year in which the determination was made.
1983 The 1983 Act moved the effective date for a cost-of-living benefit increase from June to December, beginning in 1983, and eliminated the "triggering requirement" for the 1983 increase only. Effective with the determination made in 1984, the two periods used in calculating the CPI-W percentage increase were shifted from the first to the third quarter.
The 1983 Act also introduced an alternative method for determining the size of a cost-of-living adjustment. This method, called the stabilizer provision, is applied when the ratio of the combined OASDI trust fund assets to estimated outgo falls below a certain percentage. The "triggering" percentage is 15 percent for 1985–1988 and 20 percent for years after 1988. Under these circumstances, the cost-of-living adjustment is based on the lesser of the CPI-W percentage increase determined above or the increase in average wages. The latter increase is the percentage, rounded to the nearest one-tenth of 1 percent by which the national average wage for the year before the year of determination exceeds the average wage for the year before the most recent year in which either a cost-of-living increase or a general benefit increase occurred. (See Table 2.A8 for the annual amount of the average wage after 1950 and footnote a in that table for the underlying data sources.)
The 1983 legislation also included a provision for making up any benefit increases that are based on a lower wage increase rather than on the increase in the cost of living. When the fund ratio is greater than 32 percent, additional increases will be provided so that benefits are increased to the level at which they would have been if all increases had been based on the CPI-W. (See Table 2.A19 for the cumulative effect of statutory and automatic increases in benefits.)
1986 Triggering requirement eliminated for cost-of-living increases in and after 1986 by P.L. 99-509 (signed October 21, 1986).
2001 The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
Earnings test
1972 The 1972 Act (as modified by the 1973 Acts) mandated a determination in 1974, and in every subsequent year in which a cost-of-living increase is established, as to whether an adjustment in the exempt amount—the amount of earnings permitted without reduction in benefits—is required.
The determination in the years after 1975 is made by multiplying the monthly exempt amount in effect in the year of determination by the following quotient: the national average wage for the year before the year of determination, divided by the average wage for the year before the most recent year in which an automatic determination was made that resulted in an increase or in which an increase in the exempt amount was enacted. (See Table 2.A8 for annual amounts of the average wage after 1950.) The resulting product, rounded to the nearest multiple of $10, is the new monthly exempt amount, effective with respect to remuneration paid after the year of determination and with respect to taxable year beginning after that year. In no case, however, is the new exempt amount reduced below the exempt amount in the year of determination. The new annual exempt amount is determined by multiplying the new monthly amount by 12.
1976 In the 1974 and 1975 determinations, the quotient was the average wage for the year of determination, estimated from data for the first calendar quarter, divided by the corresponding amount for the year before the year of determination. Public Law 94-202 (signed January 2, 1976) revised the adjustment method by increasing by a year the lag in average wages used in the computation. Thus, for example, the 1976 determination was based on the percentage increase in the average wage from 1974 to 1975.
1994 The determination for years after 1994 is made by multiplying the monthly exempt amounts in effect for 1994 ($930 for beneficiaries who have, $670 for beneficiaries who have not yet, reached "full retirement age"; see footnote f in Table 2.A29) by the following quotient: the national average wage for the year before the year in which the determination is made, divided by the national average wage for 1992. (See Table 2.A8 for annual amounts of the national average wage.) The resulting products, rounded to the nearest $10, are the new monthly exempt amounts effective for the year following the year the determination is made. The new annual exempt amounts are determined by multiplying the new monthly amounts by 12.
1996 Public Law 104-121, enacted March 29, 1996, suspended the automatic indexing of the exempt amounts through the year 2002 for workers aged–65–69. It legislated ad hoc increases in the annual exempt amounts to $12,500 in 1996; $13,500 in 1997; $14,500 in 1998; $15,500 in 1999; $17,000 in 2000; $25,000 in 2001; and $30,000 in 2002. Thereafter, the exempt amounts will increase automatically based on the annual increase in the national average wage as under the 1994 legislation.
2000 Public Law 106-182, enacted April 7, 2000, eliminated the earnings test beginning with the month a beneficiary reaches full retirement age (FRA). The annual earnings test that applies in the year of attainment of FRA is based on the annual limits established under P.L. 104-121 (including the $1 for $3 withholding rate). In determining annual earnings for purposes of the annual earnings test under this legislation, only earnings before the month of attainment of FRA will be considered. Public Law 106-182 did not change the annual exempt amount for beneficiaries who are under FRA throughout the year, which continues to be pegged to increases in the average wage.
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page (http://www.socialsecurity.gov/regulations/index.htm). Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
CONTACT: Alberta Presberry (410) 966-8473.
Table 2.A19 Illustrative benefit growth: Cumulative effect of statutory and automatic increases in benefits using a 100 dollar base benefit
Base date August
1950
September
1950
September
1952
September
1954
January
1959
January
1965
February
1968
January
1970
January
1971
September
1972
June
1974
June
1975
June
1976
June
1977
June
1978
June
1979
June
1980
June
1981
June
1982
Dec.
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
1987
Dec.
1988
Dec.
1989
Dec.
1990
Dec.
1991
Dec.
1992
Dec.
1993
Dec.
1994
Dec.
1995
Dec.
1996
Dec.
1997
Dec.
1998
Dec.
1999
Dec.
2000
Dec.
2001
Dec.
2002
Dec.
2003
Dec.
2004
Dec.
2005
August 1950 100 177 199 225 241 258 291 335 368 442 491 530 564 597 636 699 799 888 954 987 1,022 1,053 1,067 1,112 1,156 1,211 1,276 1,323 1,363 1,398 1,437 1,475 1,518 1,549 1,570 1,609 1,665 1,708 1,732 1,769 1,817 1,890
September 1950 . . . 100 113 127 136 146 164 189 208 250 277 299 318 337 359 395 451 502 539 558 577 595 603 628 653 684 721 748 770 790 812 833 857 875 887 909 941 965 979 999 1,026 1,067
September 1952 . . . . . . 100 113 121 129 146 168 185 222 246 266 283 300 319 351 401 446 479 496 513 529 536 558 581 608 641 665 684 702 722 741 762 778 788 808 836 858 870 888 912 949
September 1954 . . . . . . . . . 100 107 114 129 149 164 196 218 235 250 265 283 310 355 395 424 439 454 468 474 494 514 538 567 588 606 621 639 655 674 689 698 715 740 759 770 786 807 839
January 1959 . . . . . . . . . . . . 100 107 121 139 153 184 204 220 234 248 264 290 332 369 396 410 424 437 443 462 480 503 530 550 566 581 597 613 630 644 652 668 692 710 720 735 754 785
January 1965 . . . . . . . . . . . . . . . 100 113 130 143 172 190 206 219 232 247 271 310 345 370 383 397 409 414 432 449 470 495 514 529 543 558 573 589 601 609 625 646 663 672 687 705 733
February 1968 . . . . . . . . . . . . . . . . . . 100 115 127 152 168 182 194 205 218 240 274 305 328 339 351 362 367 382 397 416 438 455 468 480 494 507 521 532 539 553 572 587 595 608 624 649
January 1970 . . . . . . . . . . . . . . . . . . . . . 100 110 132 147 158 168 178 190 209 239 265 285 295 305 315 319 332 345 362 381 395 407 418 429 441 453 463 469 481 497 510 517 528 543 563
January 1971 . . . . . . . . . . . . . . . . . . . . . . . . 100 120 133 144 153 162 173 190 217 241 259 268 277 286 290 302 314 329 347 359 370 380 390 401 412 421 426 437 452 464 470 480 493 512
September 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 111 120 128 135 144 158 181 201 216 223 231 238 241 252 262 274 289 299 308 316 325 334 343 351 355 364 377 387 392 400 411 428
June 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 108 115 122 130 142 163 181 194 201 208 215 218 227 236 247 260 270 278 285 293 301 309 316 320 328 339 348 353 361 370 385
June 1975 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 106 113 120 132 151 168 180 186 193 199 201 210 218 229 241 250 257 264 271 278 286 292 296 304 314 323 327 334 343 356
June 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 106 113 124 142 158 169 175 181 187 189 197 205 215 226 235 242 248 255 262 269 275 278 285 295 303 307 314 322 335
June 1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 107 117 134 149 160 165 171 176 179 186 194 203 214 222 228 234 241 247 254 260 263 270 279 286 290 296 304 316
June 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 110 126 140 150 155 161 166 168 175 182 190 201 208 214 220 226 232 239 244 247 253 262 269 273 278 286 296
June 1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 114 127 137 141 146 151 153 159 166 173 183 189 195 200 206 211 217 222 225 230 238 245 248 253 260 269
June 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 111 119 124 128 132 134 139 145 152 160 166 171 175 180 185 190 194 197 201 209 214 217 222 227 235
June 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 107 111 115 119 120 125 130 136 144 149 153 157 162 166 171 174 177 181 188 192 195 199 205 213
June 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 107 110 112 117 121 127 134 139 143 147 151 155 159 162 165 169 175 179 182 185 190 197
December 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 107 108 113 117 123 129 134 138 142 146 149 154 157 159 163 169 173 176 179 184 190
December 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 104 109 113 118 125 130 133 137 141 144 149 152 154 157 163 167 170 173 178 184
December 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 101 106 110 115 121 126 129 133 136 140 144 147 149 153 158 162 164 168 172 179
December 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 108 113 120 124 128 131 135 138 142 145 147 151 156 160 162 166 170 176
December 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 109 115 119 123 126 129 133 137 139 141 145 150 154 156 159 163 169
December 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 105 110 114 118 121 124 128 131 134 136 139 144 148 150 153 157 163
December 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 105 109 113 116 119 122 125 128 130 133 138 141 143 146 150 156
December 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 107 110 113 116 119 121 123 126 131 134 136 139 142 148
December 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 106 109 111 115 117 119 122 126 129 131 134 137 142
December 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 105 108 111 114 115 118 122 125 127 130 133 138
December 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 105 109 111 112 115 119 122 124 126 130 135
December 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 106 108 109 112 116 119 121 123 126 131
December 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 105 106 109 113 116 117 120 123 127
December 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 102 103 106 110 113 114 117 120 124
December 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 101 104 107 110 112 114 117 122
December 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 106 109 110 113 116 120
December 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104 106 108 110 113 116
December 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 104 106 109 113
December 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 101 104 106 110
December 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 102 105 109
December 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 103 107
December 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 104
December 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Cost-of-living adjustment . . . 77.0 12.5 13.0 7.0 7.0 13.0 15.0 10.0 20.0 11.0 8.0 6.4 5.9 6.5 9.9 14.3 11.2 7.4 3.5 3.5 3.1 1.3 4.2 4.0 4.7 5.4 3.7 3.0 2.6 2.8 2.6 2.9 2.1 1.3 2.5 a 3.5 2.6 1.4 2.1 2.7 4.1
SOURCES: Social Security Act of 1935 (the Act), as amended through December 31, 2005; regulations issued under the Act; and precedential case decisions (rulings). Specific laws, regulations, rulings, legislation, and a link to the Federal Register can be found at the Social Security Program Rules page (http://www.socialsecurity.gov/regulations/index.htm). Social Security Administration, "Cost-of-Living Increase and Other Determinations for 2006," Federal Register, vol. 70, no. 205 (October 25, 2005).
NOTES: Growth reflects cost-of-living adjustments only. Data are rounded to the nearest dollar.
. . . = not applicable.
a. The cost-of-living adjustment (COLA) for December 1999 was originally determined to be 2.4 percent, based on the consumer price index (CPI). The underlying CPI was later recomputed by the Bureau of Labor Statistics; a 2.5 percent COLA would have been consistent with the recomputed CPI. Pursuant to Public Law 106-554, benefits were calculated and paid in August 2001 and later as if the COLA for December 1999 had been 2.5 percent. Affected beneficiaries received a one-time payment to cover the shortfall that occurred before August 2001.
CONTACT: Alberta Presberry (410) 966-8473.