TN 25 (11-96)

RS 00605.018 Total Earnings in Computation Years Under the 1978 NS Method - Indexing the ER

A. Definition

The indexing year is the second year before the benchmark year. If the benchmark year (also called eligibility year) is 1992, the indexing year would be 1990.

B. Policy

The PIA is determined on the basis of the earnings record after the posted and corrected earnings up to the maximum creditable amounts listed in RS 01404.300 have been adjusted or “indexed” to reflect earlier earnings in terms of the current dollar value in the “indexing year”. Earnings in and after the indexing year are not indexed. (See RS 00615.302 for widow(er)'s indexing provision.) Earnings in or after the indexing year are used as posted and, unlike earnings after indexing, are limited by the maximum creditable amounts listed in RS 01404.300.

C. Procedure

To index earnings:

  • Multiply the posted earnings up to the maximum creditable for each year after 1950 up to the indexing year by the average wages of all workers for the indexing year; and

  • Divide the result by the average earnings of all workers for the year being indexed. Carry to three decimal places and round to the nearest cent; i.e., if third decimal place is 4 or less, round down; if 5 or more, round up.

  • Use the following formula for indexing earnings:

Indexed earnings for Given Year= Actual Earnings   For Given Year× Average Earnings for Indexing Year
 

Average Earnings for Given Year

NOTE: Indexing of earnings may be done manually as described above or with the assistance of the Interactive Computation Facility on MCS.

D. List - Established Average Annual Earnings Amounts

The following lists the national average wage for each year after 1950.

YearAverage Earnings Amounts
1951$2,799.16
1952 $2,973.32
1953 $3,139.44
1954 $3,155.64
1955 $3,301.44
1956 $3,532.36
1957 $3,641.72
1958 $3,673.80
1959 $3,855.80
1960 $4,007.12
1961 $4,086.76
1962 $4,291.40
1963 $4,396.64
1964 $4,576.32
1965 $4,658.72
1966 $4,938.36
1967 $5,213.44
1968 $5,571.76
1969 $5,893.76
1970 $6,186.24
1971 $6,497.08
1972 $7,133.80
1973 $7,580.16
1974 $8,030.76
1975 $8,630.92
1976 $9,226.48
1977 $9,779.44
1978$10,556.03
1979$11,479.46
1980$12,513.46
1981$13,773.10
1982$14,531.34
1983$15,239.24
1984$16,135.07
1985$16,822.51
1986$17,321.82
1987$18,426.51
1988$19,334.04
1989$20,099.55
1990$21,027.98
1991$21,811.60
1992$22,935.42
1993$23,132.67
1994$23,753.53
1995$24,705.66
1996$25,913.90
1997$27,426.00
1998$28,861.44
1999$30,469.84
2000$32,154.82
2001$32,921.92
2002$33,252.09
2003$34,064.95

2004

$35,648.55

2005

$36,952.94

2006

$38,651.41

2007

$40,405.48

2008

$41,334.97

2009

$40,711.61

2010

$41,673.83

2011

$42,979.61

2012

$44.321.67

2013

$44,888.16

2014

$46.481.52

2015

$48,098.63

2016

$48,642.15


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0300605018
RS 00605.018 - Total Earnings in Computation Years Under the 1978 NS Method - Indexing the ER - 12/13/2017
Batch run: 12/13/2017
Rev:12/13/2017