AIME Average Indexed Monthly Earnings

The dollar amount used to calculate your Social Security benefit if you attained age 62 or became disabled (or died) after 1978. To arrive at your AIME, we adjust your actual past earnings using an “average wage index,” so you won’t lose the value of your past earnings (when money was worth more) in relation to your more recent earnings. If you attained age 62 or became disabled (or died) before 1978, we use Average Monthly Earnings (AME).

AME (Average Monthly Earnings)

For Variable Annuities only. An annuity’s subaccount price per share during the accumulation phase. An AUV is the net asset value after income and capital gains have been included and subaccount management expenses have been subtracted. Many insurance companies keep daily charts for the tracking of AUV’s and also offer performance summary sheets.

Appeal (Appeal Rights)

You will receive a letter of explanation whenever Social Security makes a decision regarding your eligibility for Social Security or Supplemental Security Income (SSI) benefits. If you disagree with the decision, you have the right to appeal (ask us to review your case). If our decision was wrong, we’ll change it.

Application for Benefits

To receive Social Security benefits, Supplemental Security Income (SSI) payments, or Medicare, you must complete and sign an application. You can apply for retirement, disability, Medicare and spouse’s benefits online, in person at a local Social Security Office, or by telephone at 1-800-772-1213. The TTY number is 1-800-325-0778.

Application for a Social Security Card

The application form you need to complete to obtain a Social Security number, or a replacement card. For more information see Get or Replace a Social Security Card.

Auto cost-of-living benefit increase

The annual increase in benefits, effective for December, reflecting the increase, if any, in the cost of living. A benefit increase is applicable only after a beneficiary becomes eligible for benefits. In general, the benefit increase equals the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) measured from the third quarter of the previous year to the third quarter of the current year. If there is no increase in the CPI-W, there is no cost-of-living benefit increase.

Auxiliary Benefits

Monthly benefits payable to a spouse or child of a retired or disabled worker, or to a survivor of a deceased worker.


An administrative determination that an individual is entitled to receive a specified type of OASDI benefit. Awards can represent not only new entrants to the benefit rolls but also persons already on the rolls who become entitled to a different type of benefit. Awards usually result in the immediate payment of benefits, although payments may be deferred or withheld depending on the individual’s particular circumstances.

Baby Boom

The period from the end of World War II (1946) through 1965 marked by unusually high birth rates.

Baptismal Certificate

An official religious record of your birth or baptism. In some situations we can use a baptismal certificate to establish your age.

Base Years

A worker’s (wage earner’s) base years for computing Social Security benefits are the years after 1950 up to the year of entitlement to retirement or disability insurance benefits. For a survivor’s claim, the base years include the year of the worker’s death.

Bend Points

The dollar amounts defining the AIME or PIA brackets in the benefit formulas.


A person who has been awarded benefits on the basis of his or her own or another’s earnings record. The benefits may be either in current-payment status or withheld.

Benefit Payments

The amounts disbursed for OASI and DI benefits by the Department of the Treasury.

Benefit Verification Letter

An official letter from Social Security that verifies the amount an individual receives each month in Social Security benefits and/or Supplemental Security Income (SSI) payments. These letters are normally issued following a request from a person receiving benefits or his/her authorized representative.


Social Security pays five types of benefits:

  • Retirement
  • Disability
  • Family (dependents)
  • Survivors
  • Medicare

The retirement, family (dependents), survivor and disability programs pay monthly cash benefits, and Medicare provides medical coverage.


You can get the following reduced monthly benefits before reaching full retirement age:

  • Retirement benefits at age 62 through the month before your reach Full Retirement Age;
  • Husband’s or wife’s benefits at age 62 through the month before you reach full retirement age, provided no child of your spouse either under age 18 or disabled and entitled to benefits is in your care;
  • Widow’s or widower’s benefits beginning at any time from age 50 through the month before you reach full retirement age;
  • Widow’s or widower’s benefits, if your spouse received a retirement benefit before full retirement age;
  • Disability benefits received after a reduced retirement benefit; or
  • Retirement or disability benefits received after a reduced widow’s or widower’s benefit. This applies only if you were born before 1928.
Birth Certificate (Original)

The record maintained by a governmental entity such as a state, county, parish, city, or borough that documents your birth. For additional information on obtaining a birth certificate see the NCHS – Alphabetical List.


We use the term “Child” to include your biological child or any other child who can inherit your personal property under State law or who meets certain specific requirements under the Social Security Act; such as:

  • a legally adopted child,
  • an equitably adopted child,
  • a stepchild, or
  • a grandchild.
Cost of Living Adjustment (COLA)

Social Security benefits and Supplemental Security Income (SSI) payments may be automatically increased each year to keep pace with increases in the cost-of-living (inflation).

Computation Years

Computation years are the years with highest earnings selected from the “base years.” We add total earnings in the computation years and divide by the number of months in those years to get the AME or the AIME. (We use your 35 highest years of earnings to compute your retirement benefits.)

Covered Earnings

Earnings in employment covered by the OASDI program.

Covered Employment

All employment for which earnings are creditable for Social Security purposes. The program covers almost all employment. Some exceptions are:

  • Self-employed workers earning less than $400 in a calendar year.
  • State and local government employees whose employer has not elected to be covered under Social Security and who are participating in an employer-provided pension plans.
  • Current Federal civilian workers hired before 1984 who have not elected to be covered.
Covered Worker

A person who has earnings creditable for Social Security purposes based on services for wages in covered employment or income from covered self-employment.

CPI-Indexed Dollars

Amounts adjusted by the CPI to the value of the dollar in a particular year.

CPI-W (Consumer Price Index)

An index prepared by the U. S. Department of Labor that charts the rise in costs for selected goods and services. This index is used to compute Cost of living adjustments.

Creditable Earnings

Wage or self-employment earnings posted to a worker’s earnings record. Such earnings determine eligibility for benefits and the amount of benefits on that worker’s record. The contribution and benefit base is the maximum amount of creditable earnings for each worker in a calendar year.

Credits (Social Security Credits)

Previously called “Quarters of Coverage.” As you work and pay taxes, you earn credits that count toward your eligibility for future Social Security benefits. You can earn a maximum of four credits each year. Most people need 40 credits to qualify for benefits. Younger people need fewer credits to qualify for disability or survivors benefits.
For more information read: How You Earn Credits (05-10072).

Current Dollars

Amounts expressed in nominal dollars with no adjustment for inflationary changes in the value of the dollar over time.

Currently Insured Status

Amounts expressed in nominal dollars with no adjustment for inflationary changes in the value of the dollar over time.

Current-Payment Status

Amounts expressed in nominal dollars with no adjustment for inflationary changes in the value of the dollar over time.

Decision Notice (Award Letter or Denial Letter)

When you apply for Social Security, we decide if you will receive benefits. We send you an official letter explaining our decision and, if benefits are payable, we tell you the amount you will get each month.

Delayed Retirement Credits (DRC)

Social Security benefits are increased by a certain percentage (depending on date of birth) if a person delays taking retirement benefits beyond full retirement age.
The benefit increase no longer applies after age 70, even if the person continues to delay taking benefits.

Dependent Benefits

See Family Benefits.

Direct Deposit

The standard way to receive Social Security benefits and Supplemental Security Income (SSI). Your money is sent electronically to an account in a financial institution (bank, trust company, savings and loan association, brokerage agency or credit union). For more information see Social Security Direct Deposit.

Disability Benefits

You can get disability benefits if you:

  • are under full retirement age
  • have enough Social Security credits and
  • have a severe medical impairment (physical or mental) that’s expected to prevent you from doing “substantial” work for a year or more, or have a condition that is expected to result in death.
Documents (Proofs)

Forms and papers such as birth certificates, marriage certificates, W2 forms, tax returns, deeds, etc., submitted by individuals applying for benefits and services. We can accept only originals or copies certified by the agency that has the original document.

Early Retirement

You can start getting Social Security retirement benefits as early as age 62, but your benefit amount will be less than you would have gotten if you waited until your full retirement age.

If you take retirement benefits early, your benefit will remain permanently reduced, based on the number of months you received benefits before you reached full retirement age.

Early Retirement Age

Age 62.

Earnings Record (lifetime record of earnings)

A chronological history of the amount of money you earned each year during your working lifetime. The credits you earned remain on your Social Security record even when you change jobs or have no earnings.

Earnings Test

The provision requiring the withholding of benefits if beneficiaries under normal retirement age have earnings in excess of certain exempt amounts.

Evidence (Proofs)

“Proofs.” The documents you must submit to support a factor of entitlement or payment amount. The people in your Social Security office can explain what evidence is required to establish entitlement and help you to get it.

Excess Wages

Wages in excess of the contribution and benefit base on which a worker initially makes payroll tax contributions, usually as a result of working for more than one employer during a year. Employee payroll taxes on excess wages are refundable to affected employees, while the employer taxes are not refundable.

Family Benefits (Dependent Benefits)

When you’re eligible for retirement or disability benefits, the following people may receive benefits on your record:

  • spouse if he or she is at least 62 years old (or any age but caring for an entitled child under age 16 or disabled)
  • children if they are unmarried and under age 18, or under age 19 and a full-time elementary or secondary student
  • children age 18 or older but disabled before age 22
  • ex-spouses age 62 or older
Family Maximum

The maximum amount of benefits payable to an entire family on any one worker’s record.

Federal Insurance Contributions Act (FICA)

Provision authorizing payroll taxes on the wages of employed persons to provide for Old-Age, Survivors, and Disability Insurance, and for Hospital Insurance. Workers and their employers generally pay the tax in equal amounts.


FICA stands for “Federal Insurance Contributions Act.” It’s the tax withheld from your salary or self-employment income that funds the Social Security and Medicare programs.

Full Retirement Age

The age at which a person may first become entitled to full or unreduced benefits based on age.
For workers and spouses born in 1938 or later and widows/widowers born in 1940 or later, the full retirement age increases gradually from age 65 until it reaches age 67 for

  • Workers and spouses in the year 2027
  • Widows and widowers in the year 2029

This increase affects the amount of the reduction for persons who begin receiving reduced benefits.

Health Insurance (Medicare)

The federal health insurance program for:

  • people 65 years of age or older
  • certain younger people with disabilities
  • people with permanent kidney failure with dialysis or a transplant, sometimes called ESRD (End-Stage Renal Disease)


An increase in the general price level of goods and services.

Insured Status

If you worked and earned enough Social Security credits to be eligible for retirement or disability benefits or enable your dependents to be eligible for benefits due to your retirement, disability, or death, you have insured status.


A payment in exchange for the use of money during a specified period.

Lawful Alien Status

People admitted to the U.S. who are granted permanent authorization to work by the United States Citizenship and Immigration Services (USCIS) (formerly INS) or admitted to the U.S. on a temporary basis with USCIS or INS authorization to work.

Life Expectancy

Average remaining number of years expected prior to death.

Lifetime Earnings “Earnings Record”

A chronological history of the amount of money you earned each year during your working lifetime. The credits you earned remain on your Social Security record even when you change jobs or have no earnings.

Lump Sum Death Payment

A one-time payment of $255 paid in addition to any monthly survivors benefits that are due. This benefit is paid only to your widow/widower or minor children.

Maximum Earnings

The maximum amount of earnings we can count in any calendar year when computing your Social Security benefit.


A joint federal and state program that helps with medical costs for people with low incomes and limited resources.

Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Month of Election

This usually applies to retirement claims. In certain situations, you can choose the month in which your benefits will start.

Normal Retirement Age

See Full Retirement Age

Number Holder

See Wage Earner.

Nutrition Assistance Programs

The U. S. Department of Agriculture program that helps needy families buy food.

OASDI (Old Age Survivors and Disability Insurance)

The Social Security programs that provide monthly cash benefits to you and your dependents when you retire, to your surviving dependents, and to disabled workers and their dependents.

Old-Law Base

Amount the contribution and benefit base would have been if the 1977 amendments had not provided for ad hoc increases. The Social Security Amendments of 1972 provided for automatic annual indexing of the contribution and benefit base. The Social Security Amendments of 1977 provided for ad hoc increases to the bases for 1979 81, with subsequent bases updated in accordance with the normal indexing procedure.

Payment Dates for Social Security Benefits

If you applied for Social Security benefits before May 1, 1997, your payments usually are dated and delivered on the 3rd of the month following the month for which the payment is due. For example, payments for January are delivered on February 3rd.

If the 3rd of the month is a Saturday, Sunday or Federal holiday, your payments are dated and delivered on the first day before the 3rd of the month which is not a Saturday, Sunday or Federal holiday. For example, if the 3rd is a Saturday or Sunday, payments are delivered on the preceding Friday.

If you filed for Social Security benefits May 1, 1997, or later, you are assigned one of three new payment days based on date of birth:

  • Born: 1st through the 10th of the month – Delivered: Second Wednesday of the month
  • Born: 11th through 20th of the month – Delivered: Third Wednesday of the month
  • Born: 21st through end of the month – Delivered: Fourth Wednesday of the month

If your scheduled Wednesday payment day is a Federal holiday, we’ll send your payment on the preceding day that is not a Federal legal holiday.

Payment Dates for Supplemental Security Income (SSI) Payments

SSI payments are usually dated and delivered on the first day of the month for which they are due. However, if the first falls on a Saturday, Sunday or Federal holiday, they are dated and delivered on the first day preceding the first of the month which is not a Saturday, Sunday or Federal holiday.

PIA (Primary Insurance Amount)

The monthly amount payable if you are a retired worker who begins receiving benefits at full retirement age or if you’re disabled and have never received a retirement benefit reduced for age.

Present Value

The equivalent value, at the present time, of a future stream of payments (either income or cost). The present value of a future stream of payments may be thought of as the lumpsum amount that, if invested today, together with interest earnings would be just enough to meet each of the payments as they fell due. Present values are used widely in calculations involving financial transactions over long periods of time to account for the time value of money (interest). Present-value calculations for this report use the effective yield on trust fund assets.

Protective Filing Date

The date you first contact us about filing for benefits. It may be used to establish an earlier application date than when we receive your signed application.

Reduction Months

Months beginning with the first month you’re entitled to reduced benefits up to, but not including, the month in which you reach full retirement age.

Representative Payee

If you receive Social Security benefits or Supplemental Security Income (SSI) and become unable to handle your own financial affairs, we (after a careful investigation) appoint a relative, a friend, or an interested party to handle your Social Security matters.

Representative payees are required to maintain complete accounting records and periodically provide reports to Social Security. For additional information see Representative Payee Program.

Retirement Age – Full Benefits

Full retirement age was 65 for many years. However, beginning with the year 2000 (for workers and spouses born in 1938 or later, or widows or widowers born in 1940 or later), the retirement age increases gradually from age 65 until it reaches age 67 in the year 2022.

Retirement Age – Minimum

The minimum age for retirement-age 62 for workers, and age 60 for widows or widowers. You can choose a reduced benefit anytime before you reach full retirement age

Retirement Earnings Test

If you receive monthly Social Security benefits before your full retirement age and work, your earnings from wages and/or self-employment cannot exceed a certain amount without reducing your monthly benefits.

Retirement Eligibility Age

The age, currently age 62, at which a fully insured individual first becomes eligible to receive retired-worker benefits.

Retroactive Benefits (Back Pay)

Monthly benefits that you may be entitled to before the month you actually apply, if you meet the requirements

Retirement Benefit

Money that is payable to you upon retirement if you have enough Social Security credits.

Self-Employment Income

You are self-employed if you operate a trade, business or profession, either individually or as a partner, and have net earnings of $400 or more in a taxable year.

Social Security

Social Security is based on a simple concept: While you work, you pay taxes into the Social Security system, and when you retire or become disabled, you, your spouse and your dependent children receive monthly benefits that are based on your reported earnings. Also, your survivors can collect benefits if you die.

Social Security Number (Social Security Card)

Your first and continuous link with Social Security is your nine-digit Social Security Number. It helps us to maintain an accurate record of your wages or self-employment earnings that are covered under the Social Security Act, and to monitor your record once you start getting Social Security benefits.

Social Security Office

Your local Social Security office is the place where you can:

  • apply for a Social Security number
  • check on your earnings record
  • apply for Social Security benefits, Supplemental Security Income (SSI), and hospital insurance (Medicare) protection
  • enroll for medical insurance
  • get help applying for food stamps and
  • learn everything you need to know about your rights and obligations under the Social Security law

There is no charge for any of our services. You can also call our toll-free telephone number, 1-800-772-1213, to receive all these services. Our TTY number is 1-800-325-0778. This toll-free telephone number service is available from 7 a.m. to 7 p.m. any business day. All calls are confidential.


You are the spouse of the worker if, when he or she applied for benefits:

  • you and the worker were married
  • you would have the status of a husband or a wife for that person’s personal property if they had no will
  • you went through a marriage ceremony in good faith, which would have been valid except for a legal impediment
Supplemental Security Income (SSI)

A federal supplemental income program funded by general tax revenues (not Social Security taxes). It helps aged, blind, and disabled people who have limited income and resources by providing monthly cash payments to meet basic needs for food, clothing, and shelter.

Survivors Benefits

Benefits based on your record (if you should die) are paid to your:

  • widow/widower age 60 or older, 50 or older if disabled, or any age if caring for a child under age 16 or disabled before age 22
  • children, if they are unmarried and under age 18, under 19 but still in school, or 18 or older but disabled before age 22
  • parents if you provided at least one-half of their support

An ex-spouse could also be eligible for a widow/widower’s benefit on your record. A special one-time lump sum payment of $255 may be made to your spouse or minor children.

Taxable Earnings

Wages or self-employment income, in employment covered by the OASDI or HI programs, that are under the applicable annual maximum taxable limit. For 1994 and later, no maximum taxable limit applies to the HI program.

Taxable Self-Employment Income

The maximum amount of net earnings from self-employment by an earner which, when added to any taxable wages, does not exceed the contribution and benefit base. For HI beginning in 1994, all net earnings from self-employment.

Taxation of Benefits

Beginning in 1984, Federal law subjected up to 50 percent of an individual’s or a couple’s OASDI benefits to Federal income taxation under certain circumstances. Treasury allocates the revenue derived from this provision to the OASI and DI Trust Funds on the basis of the income taxes paid on the benefits from each fund. Beginning in 1994, the law increased the maximum percentage from 50 percent to 85 percent. The HI Trust Fund receives the additional tax revenue resulting from the increase to 85 percent.


Cessation of payment because the beneficiary is no longer entitled to receive a specific type of benefit.

Wage Earner

A person who earns Social Security credits while working for wages or self-employment income. Sometimes referred to as the “Number Holder” or “Worker.”


All payment for services performed for an employer. Wages do not have to be cash. The cash value of all compensation paid to an employee in any form other than cash is also considered wages, unless the form of payment is specifically not covered under the Social Security Act


You are the widow/widower of the worker if, at the time the insured person died:

  • you and the worker were validly married
  • you would have the status of a husband or a wife for that person’s personal property if he or she had no will
  • you went through a marriage ceremony in good faith that would have been valid except for a legal impediment
  • The minimum age for widows benefits is 60, or 50 if disabled.

    Lump Sum Death Payment

    A one-time payment of $255 paid in addition to any monthly survivors benefits that are due. This benefit is paid only to your widow/widower or minor children.