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What are Social Security "bend points"?

Intervals of income that earn specific returns towards the overall benefit amount

To begin, "bend points" involve the calculation of the Primary Insurance Amount (PIA), which is the benefit (before rounding down) a person would receive if they elect to begin receiving Social Security benefits at their full retirement age. 

As part of the calculation of PIA, so-called "bend points" are intervals of income that earn specific returns towards the overall benefit amount. Simply put, bend points are two points at which you receive diminishing returns in your benefit amount once you have reached a certain income threshold.  Note that while the bend points create reductions that do not look terribly attractive to those with higher income levels, recall that Social Security, as written, was designed to replace more of the income of a lower wage earner that a higher wage earner. 

Table 1 and Figure 1, courtesy of the Congressional Research Service, describe the calculation. Note that AIME is the Average Indexed Monthly Earnings of the claimant. Note also that for 2023, the bend points for the brackets are $1,115 and $6,721 after the annual adjustment for inflation, while the calculation methodology remains the same:


Computation of a Worker's Primary Insurance Amount(PIA) in 2023

Based on an Illustrative AIME of $6,000

Factors Three Brackets of AIME PIA for Worker with an Illustrative AIME of $6,000
90% First $1,115 of AIME, plus $1,003.50
32% Over $1,115 and through $6,721 plus $1,563.20
15% Over $6,721 0

PIA $1,003.50 + $1,563.20 + 0  = $2,566.00