Primary Insurance Amount

Primary Insurance Amount (PIA) refers to the amount of monthly Social Security benefits a worker is entitled to receive at full retirement age, based on their earnings history. The PIA is calculated using the worker’s average Indexed monthly earnings (AIME) and is a key factor in determining the benefits available to them and their Dependents.

Example 1: If a worker has an AIME of $5,000, the PIA may be calculated using a formula that applies different percentages to portions of the AIME. For instance, if the first $1,115 is multiplied by 90%, the next $5,000 is multiplied by 32%, and any amount above that is multiplied by 15%, the total would represent the PIA.

Example 2: A worker who earned consistently over their career might have a PIA of $2,000. If they choose to retire at age 67, they would receive this amount monthly. However, if they retire earlier, say at age 62, their benefits would be reduced based on actuarial tables.

Case: In the case of a worker who dies, the PIA also plays a role in determining the survivor benefits available to their spouse or children, ensuring that the family receives a financial safety net based on the deceased’s earnings history.