Robert Brokamp

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4,411 appearances 40 recordings 3 series first heard Oct 2025 last heard 19 Sep

Robert Brokamp’s voice in public audio — every appearance, attributed to the second.

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Recordings per month over the last 12 months — 40 in all, peaking in Aug 2026 with 5.

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Motley Fool Hidden Gems Investing · How Your Social Security Benefit Is Actually Calculated · 15 Aug 2026 podcast

I plan to semi-retire and reduce my income by 50% at age 55.

I plan to work till age 67 and start collecting Social Security after that.

How can I calculate my benefits?

Well, Fred, when it comes to calculating your potential Social Security benefit, there are three primary concepts to understand.

The first is your average indexed monthly earnings, A-I-M-E, often pronounced as Amy.

The second are the Social Security bend points, and the third is your primary insurance amount.

Let's go over each of those.

So as you hinted at in your question, Social Security is based on your 35 highest earning years.

The amounts that you earn in the years before turning age 60 are adjusted for wage inflation based on the national average wage index.

Those 35 highest earning years are totaled together and then divided by 420, which is the number of months in 35 years.

The result is your average index monthly earnings or AMI.

Now a couple of things about the AMI to keep in mind.

First, there's a cap on how much annual income is subject to Social Security taxes and thus factored into the AMI calculation.

That amount is adjusted each year and for 2026 it is $184,500.

Secondly, years in which you didn't work, you know, maybe because you retired early or you stayed home to raise the kids, will count as zeros in your AME calculation if you don't have at least 35 years of earnings.

So working another year or few, even part-time, will replace some of those zeros and improve your Amy.

All right, the next step in your benefit calculation is to apply the so called bend points to your Amy.

So these bend points are adjusted each year for wage inflation, but are permanently locked in when the worker turns sixty-two.

For those turning that age in 2026, here are those bend points and how they interact with your Amy.

So start with ninety percent of the first $1,286 of the Amy.

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