Example: Mr. B reaches age 62 and becomes entitled to old-age insurance benefits in August 1978. He had no social security earnings before 1951 and his year-by-year social security earnings after 1950 are as follows:
Year | Earnings |
1951 | $2,700 |
1952 | 2,700 |
1953 | 3,400 |
1954 | 3,100 |
1955 | 4,000 |
1956 | 4,100 |
1957 | 4,000 |
1958 | 4,200 |
1959 | 4,800 |
1960 | 4,800 |
1961 | 4,800 |
1962 | 4,800 |
1963 | 4,800 |
1964 | 1,500 |
1965 | 0 |
1966 | 0 |
1967 | 0 |
1968 | 3,100 |
1969 | 5,200 |
1970 | 7,100 |
1971 | 7,800 |
1972 | 8,600 |
1973 | 8,900 |
1974 | 9,700 |
1975 | 10,100 |
1976 | 10,800 |
1977 | 11,900 |
We first find Mr. B's elapsed years, which are the 27 years 1951-1977. We subtract 5 from his 27 elapsed years to find that we must use 22 benefit computation years in computing his average monthly wage. His computation base years are 1951-1977, which are the years after 1950 and prior to the year he became entitled. This means that we will use his 22 computation base years with the highest earnings to compute his average monthly wage. Thus, we exclude the years 1964-1967 and 1951.
We total his earnings in his benefit computation years and get $132,700. We then divide that amount by the 264 months in his 22 benefit computation years and find his average monthly wage to be $502.65, which is rounded down to $502.
20 C.F.R. §404.221