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Excerpted from "Social Security Handbook". See the uptodate, official Social Security Handbook at ssa.gov.
Computation Years Defined
703. Computation Years Defined
703.1 What are "computation years?"
Your computation years are those years, selected from the "base years", that you earned the most income. Your total earnings in the computation years are then added together and divided by the number of months in those years to get the AME or the AIME.
703.2 How does SSA determine the number of years, selected as the computation years?
The number of years, which are selected as the "computation years" in a particular case, is determined in the following steps:

Determine the "elapsed years" using the rules in §704 or §707;

Select your type of claim from those shown below and follow the instructions shown:

Retirement or survivors' insurance benefits: subtract five from the result attained in (A) above. Go to step (C).

Disability insurance benefits where you were first entitled after June 1980: divide the result attained in (A) above by five. Disregard any fraction (do not round up or down). Subtract the result (cannot exceed five) from the number of elapsed years. Go to step (C).

Disability insurance benefits for months after June 1981: divide the result attained in (A) above by five. Disregard any fraction (do not round up or down). Subtract the result (cannot exceed five) from the number of elapsed years. You may further reduce the elapsed years by the number of years that a child, either yours or your spouse's, under age three was living primarily with you ("childcare years"), provided that: (1) you did not have earnings each childcare year; and (2) the combined total number of childcare years and regular years subtracted from the elapsed years (attained in step (A) above) does not exceed three. Go to step (C).


The number remaining is the number of "computation years." This number cannot be less than two. The computation years are selected from the base years, as defined in §705 or §709. The years selected are those of highest earnings. For the computation indexed method (see §700), the selection is made after the earnings are indexed.

To compute the AME or AIME, add together your total earnings in the computation years. Divide this result by the number of months in those years.
Last Revised: Oct. 31, 2003
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