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Code of Federal Regulations Title 20. Employees' Benefits § 20.404.233 Adjustment of your guaranteed alternative when you become entitled after age 62

Current as of January 02, 2025 | Updated by Findlaw Staff

(a) If you do not become entitled to benefits at the time you reach age 62, we adjust the guaranteed alternative computed for you under § 404.232 as described in paragraph (b) of this section.

(b) To the primary insurance amount computed under the guaranteed alternative, we apply any automatic cost-of-living or ad hoc increases in primary insurance amounts that go into effect in the year you reach age 62 and in years up through the year you become entitled to benefits. (See appendix VI for a list of the percentage increases in primary insurance amounts since December 1978.)

Example:  Mr. C reaches age 62 in January 1981 and becomes entitled to old-age insurance benefits in April 1981. He had no social security earnings before 1951 and his year-by-year social security earnings after 1950 are as follows:

Year

Earnings

1951․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․$3,600

1952․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․3,600

1953․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․3,600

1954․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․3,600

1955․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,200

1956․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,200

1957․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,200

1958․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,200

1959․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1960․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1961․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1962․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1963․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1964․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1965․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․4,800

1966․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․6,600

1967․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․6,600

1968․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․7,800

1969․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․7,800

1970․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․7,800

1971․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․7,800

1972․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․9,000

1973․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․10,800

1974․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․13,200

1975․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․14,100

1976․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․15,300

1977․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․16,500

1978․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․17,700

1979․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․22,900

1980․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․25,900

1981․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․29,700

Mr. C's elapsed years are the 30 years 1951 through 1980. We subtract 5 from his 30 elapsed years to find that we must use 25 benefit computation years in computing his average monthly wage. His computation base years are 1951 through 1980 which are years after 1950 up to the year he reached age 62. We will use his 25 computation base years with the highest earnings to compute his average monthly wage. Thus, we exclude the years 1951–1955. The year 1981 is not a base year for this computation.

We total his earnings in his benefit computation years and get $236,000. We then divide by the 300 months in his 25 benefit computation years, and find his average monthly wage to be $786.66 which is rounded down to $786.

The primary insurance amount in the benefit table in appendix III that corresponds to Mr. C's average monthly wage is $521.70. The 9.9 percent and 14.3 percent cost of living increase for 1979 and 1980, respectively, are not applicable because Mr. C reached age 62 in 1981.

The average indexed monthly earnings method described in §§ 404.210 through 404.212 considers all of the earnings after 1950, including 1981 earnings which, in Mr. C's case cannot be used in the guaranteed alternative method. Mr. C's primary insurance amount under the average indexed earnings method is $548.40. Therefore, his benefit is based upon the $548.40 primary insurance amount. As in the guaranteed alternative method, Mr. C is not entitled to the cost of living increases for years before the year he reaches age 62.

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Cite this article: FindLaw.com - Code of Federal Regulations Title 20. Employees' Benefits § 20.404.233 Adjustment of your guaranteed alternative when you become entitled after age 62 - last updated January 02, 2025 | https://codes.findlaw.com/cfr/title-20-employees-benefits/cfr-sect-20-404-233/

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