Bend points
Certified Financial Planner glossary · Certified Financial Planner
Definition
The dollar thresholds at which the Social Security benefit formula’s replacement rate changes from 90 to 32 to 15 percent.
Bend points in plain English
Two retirees with unequal career earnings do not replace the same share of pre-retirement pay. Bend points are the dollar cutoffs where Social Security's PIA formula shifts from 90% to 32% to 15% of AIME, which is what makes benefits progressive. Knowing the percentages without mapping them onto AIME slices is not enough. On calculation stems, apply each rate only to its AIME segment, add the pieces, and only then talk about claiming age adjustments.
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