AIME

During my career as a financial planning I became very familiar with social security benefits. These are determined by using the highest 35 years of wages, indexing these amounts to inflation and dividing to get the average monthly indexed earnings (AIME). The average 62 year old retiring today would get about $800 per month from social security. If they are now making $30,000 per year and the government cancels their payroll tax for one year their pension would decrease to $765 assuming their employer would continue to pay the employer share of payroll tax. This is a reduction of $35 per month. They would receive $2,280 this year and it would take 5 years to recover that at $35 per month.