Primary Insurance Amount

What Does Primary Insurance Amount Mean?

The primary insurance amount (PIA) is a component of Social Security, representing the amount a person would receive in retirement benefits if they retire at their normal retirement age.

In general, the more a person contributes to Social Security throughout their lifetime, the higher their PIA will be.

Insuranceopedia Explains Primary Insurance Amount

An individual’s primary insurance amount (PIA) is calculated based on their average indexed monthly earnings (AIME). Instead of considering the worker’s average earnings over their entire lifetime, only the 35 highest-earning years are taken into account.

The PIA is calculated by summing three percentages:

1. 90% of the AIME up to $885
2. 32% of the AIME from $885 to $5,336
3. 15% of the AIME exceeding $5,336