It can be hard to make the right decision for yourself, stop working through your disability or your pain and go on SSDI. One of the biggest questions you are going to have is what will your monthly SSDI payment even be? Tabak Law can help you learn how to calculate your SSDI payment. If you have already been denied for SSDI and need help, consider getting a free case review from Tabak Law.
What is your AIME
Legal and financial jargon gets thrown around a lot, especially with a topic like SSDI, which itself is already jargon. In regards to SSDI, you may have heard the term AIME, and understanding it is vital to understanding your SSDI amount. AIME stands for average indexed monthly earnings and it’s essentially how the Social Security Administration (SSA) determines your average wage level.
How to Calculate Your AIME
To calculate your AIME, the SSA adjusts your total earnings for each year and adjusts them all for inflation. Then, it takes your 35 highest-earning years and averages your monthly earnings between them.
What happens if you become disabled before having 35 wage-earning years? This is where it gets a little complicated but bear with us. The SSA will consider the years between when you turned 21 and when you became disabled. They will then subtract 1/5th of those years or 5 years (whichever is less). For example, if you are 31, you would have 10 years of work history. Taking 1/5th of that would be 2 (which is less than 5), so you would subtract 2 from 10 to get 8. In this case, the SSA would look at your 8 highest earning years.
What is your PIA?
You did all the AIME calculations, but we still have a little ways to go before we get to your benefit amount. Now we need to explore another piece of jargon referred to as your PIA or Primary Insurance Amount.
This get’s a little complicated as there are multiple percentages involved and something called bend points, but to simplify it, this ends up working a little like income tax, and you can think of the bend points like tax brackets. These bend points change every year, and we will be using the 2023 numbers.
Calculating Your PIA
To begin, you need to take your the monthly average of your top months, which you should have figured out in the AIME section. Below we have a series of equations you can use to calculate your PIA with the 2023 numbers.
- If your monthly average is below $1,115 use this equation:
Monthly Wage X 90% = PIA
- If your monthly average is between $1,115 and $6,721 use this equation:
$1,003.5 + (Monthly Wage – $1,115) X 32% = PIA
- If your monthly average is above $6,721 use this equation:
$2,797.42 + (Monthly Wage – $6,721) X 15% = PIA
Max Monthly PIA for SSDI is $3,677 as of 2023
How Much Will You Make on SSDI?
There are a few things that can reduce your PIA payment such as public disability benefits, state or federal retirement benefits, pensions, and income above your substantial gainful activity amount.
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