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Social Security A to Z Glossary

Everything you need to know about the program that provides benefits to so many

En españolAARP's Social Security for Dummies, by Jonathan Peterson, © 2012 by AARP, and excerpted with permission of the publisher. Some entries have been adapted from the Social Security Administration's "Glossary of Social Security Terms."Most of the entries in this glossary are adapted from


Administrative law judge: A legally experienced official who presides over hearings and administrative appeals of Social Security Administration decisions.

AIME: See average indexed monthly earnings (AIME).

Appeal: A procedure by which an applicant challenges a decision by the Social Security Administration. The appeals process has four main steps: (1) reconsideration, (2) administrative law judge, (3) Appeals Council, (4) U.S. federal court (both the district court and the appropriate court of appeals).

Appeals Council: The adjudicative body within the Social Security Administration that reviews appeals after hearings with an administrative law judge.

Application for benefits. See benefit application.

Auxiliary benefits: Benefits that go to family members, based on a worker's earnings record with the Social Security Administration. Also known as family benefits or dependent benefits.

Average indexed monthly earnings (AIME): The dollar amount used to calculate your Social Security benefit. (If you attained age 62 or became disabled [or died] before 1978, a different formula — average monthly earnings [AME] — is used instead.) AIME is based on actual past earnings for 35 years that have been indexed for wage growth and averaged. The annual average is then divided by 12 to get the monthly average, or AIME. The indexing is aimed at preventing you from losing the value of your past earnings (when money was worth more) in relation to your more recent earnings. AIME is a key to the Social Security benefits computation.

Average monthly earnings (AME): The dollar amount used to calculate your monthly Social Security benefit if you attained age 62 or became disabled (or died) before 1978. The AME is determined by dividing total earnings in the computation years by the number of months in those same years.


Base years: A wage earner's base years for computing Social Security benefits are the years after 1950 up to the year of entitlement to retirement or disability insurance benefits. For a survivor's claim, the base years include the year of the worker's death.

Bend points: The dollar amounts that mark where the primary insurance amount formula changes based on average indexed monthly earnings and where the maximum family benefit formula changes based on the primary insurance amount. They're called bend points because the formulas, when graphed, appear as lines that bend at these amounts.

Beneficiary: An individual who receives benefits.

Benefit application: The application form you must complete and sign to receive Social Security benefits, Supplemental Security Income (SSI) payments or Medicare. You can apply for retirement, disability, Medicare and spouse's benefits online (at, in person (at a Social Security office) or by telephone (800-772-1213).

Benefit verification letter: An official letter from Social Security that verifies the amount an individual receives each month in Social Security benefits and/or Supplemental Security Income (SSI) payments. These letters are normally issued following a request from a person receiving benefits or an authorized representative.

Break-even point: The age at which your total collected Social Security benefits would be equal, if started at two different times. The break-even point reflects the fact that benefits claimed later pay higher amounts than benefits claimed earlier.

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