Translate the signs along the way
Use these plain-language definitions to orient yourself, then follow the official SSA sources when a term affects a real eligibility or filing decision.
A
Average Indexed Monthly Earnings (AIME)
A monthly average derived from a worker's covered earnings after earlier years are adjusted through SSA's wage-indexing process. AIME is an input to the formula used to calculate the primary insurance amount.
B
Benefit Estimate
A projected Social Security amount based on the earnings and assumptions available when the estimate is created. An estimate is not a guarantee; SSA determines the actual amount when it processes an application.
Benefit Verification Letter
An official letter showing whether someone receives Social Security benefits, Supplemental Security Income, or Medicare, along with certain payment details. It can be requested through a personal my Social Security account.
Break-Even Age
A planning comparison, not an SSA eligibility term. It is the age at which cumulative payments from a later, larger monthly benefit catch up with cumulative payments from an earlier, smaller benefit under stated assumptions.
C
Claiming Age
The age at which a person starts a Social Security benefit. For retirement benefits, the start date can generally range from age 62 through age 70, with different monthly amounts along the way.
Cost-of-Living Adjustment (COLA)
An annual adjustment that may increase Social Security and Supplemental Security Income payments based on inflation as measured under federal law. The percentage can change each year.
Covered Earnings
Wages or self-employment income from work covered by Social Security. Covered earnings can help a worker earn credits and are used in the benefit calculation, subject to annual limits.
Credits
Units earned through covered work. Credits determine whether a worker is insured for benefits; they do not directly set the dollar amount. Most people need 40 credits to qualify for retirement benefits.
D
Delayed Retirement
Starting retirement benefits after full retirement age. Waiting can earn delayed retirement credits and increase the monthly amount through age 70, but waiting beyond 70 does not create another age-based increase.
Delayed Retirement Credits
Increases to a retirement benefit earned by waiting beyond full retirement age to start benefits. Credits accrue only through age 70; waiting longer does not create an additional age-based increase.
Divorced-Spouse Benefit
A possible benefit on a former spouse's record when federal eligibility rules are met, including rules about the length of the marriage, current marital status, and age. The former spouse's current household payment is not reduced because of this benefit.
E
Early Retirement
Starting retirement benefits before full retirement age. Benefits can generally begin at age 62, but the monthly amount is permanently reduced compared with the amount payable at full retirement age.
Earnings Record
SSA's history of the wages and self-employment income reported under a person's Social Security number. It should be reviewed because it is a key input to eligibility and benefit calculations.
F
Family Maximum
A limit on the total monthly benefits that may be paid to family members on one worker's earnings record. The worker's own benefit is handled separately under the applicable rules.
Full Retirement Age (FRA)
The age at which a person becomes eligible for an unreduced retirement benefit, based on birth year. FRA ranges from 66 to 67 for people reaching retirement age now.
G
Government Pension Offset (GPO)
A former rule that could reduce spouse or survivor benefits for some people receiving a pension from government work not covered by Social Security. GPO no longer applies to benefits payable for January 2024 and later.
I
Indexed Earnings
Earlier covered earnings adjusted to reflect changes in general wage levels before SSA calculates average indexed monthly earnings. Indexing helps compare earnings from different years.
M
Maximum Taxable Earnings
The annual ceiling on earnings subject to the Social Security portion of payroll tax. The figure is also called the contribution and benefit base and changes over time.
Medicare Initial Enrollment Period
For most people, a seven-month period centered on the month they turn 65. Medicare enrollment has its own timing rules and should be evaluated even when Social Security retirement benefits are delayed.
my Social Security
SSA's secure personal online account. Depending on benefit status, it can be used to review earnings, see estimates, request a verification letter, and manage certain account information.
P
Primary Insurance Amount (PIA)
The base monthly amount payable to a retired worker at full retirement age, before certain reductions, credits, deductions, or other adjustments. It also helps determine some family benefits.
R
Retirement Earnings Test
Rules that may cause SSA to withhold some benefits when a beneficiary works and earns above an annual limit before full retirement age. The limit and withholding formula change in the year full retirement age is reached.
S
Social Security Statement
A record of a worker's reported earnings and estimates for retirement, disability, and survivor benefits. It is available through a personal my Social Security account and should be reviewed for accuracy.
Spousal Benefit
A possible benefit based on a current spouse's earnings record. The amount depends on eligibility, the worker's primary insurance amount, the spouse's own benefit, and the age when benefits start.
Survivor Benefit
A possible benefit for an eligible spouse, divorced spouse, child, or dependent parent after a covered worker dies. Survivor rules and claiming ages differ from retirement and spousal-benefit rules.
T
Taxable Maximum
Another name for maximum taxable earnings: the highest amount of a worker's annual earnings subject to Social Security payroll tax for a given year.
W
Wage Indexing
SSA's process for adjusting earlier covered earnings to account for changes in average wage levels before calculating a retirement or disability benefit.
Windfall Elimination Provision (WEP)
A former rule that could change the formula for a person's own retirement or disability benefit when the person also had a pension from work not covered by Social Security. WEP no longer applies to benefits payable for January 2024 and later.
A definition is the start of the route
Our resources connect these terms to common claiming, work, family, and advisor planning questions.