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Information given: In 2020, Social Security will replace : 90% of first $960 of AIME                             &

Information given: In 2020, Social Security will replace : 90% of first $960 of AIME

                                                                                                     32% between $960 and $5,785 of AIME

                                                                                                     15% between $5,785 and $11,475 of AIME

                                                                                                     0% over $11,475

What is the wage base for 2020? How can you tell from just using the information given above?

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Answer #2

Ans: AIME Stands for Average Indexed Monthly earnings

Given are the four slabs and these slabs are based on monthly limits

to calculate wage base for 2020 then we should multiplied it by 12 to get on Wage base limit for the year

and in above slabs there is 0% over 11,475

Wage base limit will be= $11,475*12

=> 137,700

For example if a person annual income is 150,000 then he will make it monthly AIME by dividing by 12

lets say =>12,500

therefore social Security will be zero as AIME over $11,475 will be 0%

answered by: anonymous
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