I found various sites online explicitly stating the first 2 points below. It seems the 3rd point must follow from the second point above. Is this correct?
- AIME is calculated based on earnings through the year one reaches age 60. After the year in which you reach age 60, earnings per year are not indexed, instead they are counted at their actual value.
PIA formula bend points
The PIA is the sum of three separate percentages of portions of average indexed monthly earnings. The portions depend on the year in which a worker attains age 62, becomes disabled before age 62, or dies before attaining age 62.
An insured worker becomes eligible for retirement benefits when he or she reaches age 62. If 2019 were the year of eligibility, we would divide the national average wage index for 2017 (50,321.89) by the national average wage index for each year prior to 2017 in which the worker had earnings and multiply each such ratio by the worker's earnings. This would give the indexed earnings for each year prior to 2017. We would consider any earnings in or after 2017 at face value, without indexing. Then we would compute the AIME and use this amount in computing the worker's primary insurance amount for 2019.
- Even if you have 35 years of earnings at the annual ceiling for paying into social security before age 60 (e.g., annual ceiling in 2019 was $132,900), there can be a benefit to continuing to work after age 60 since earnings are not indexed after age 60.
- Additionally: for people who don't have 35 years of earnings at the annual ceiling: They actually get more 'bang for the buck' for high earnings years after age 60, compared to if those earnings had occurred prior to age 60, since earnings are not indexed after age 60.