Average Monthly Wage (amw)
Definition of "Average monthly wage (amw)"
Figure used in calculating a worker's primary insurance amount (PIA) to determine Social Security benefits in the following manner:
- calculate the number of years between the worker's twenty-first birthday and the year prior to the worker reaching age 62 (a maximum of 40 years).
- exclude the five lowest years of earnings, thereby selecting the 35 highest years (420 months) of earnings.
- divide the total of the 35 highest years of earnings by 420 months to calculate the Average Monthly Wage.
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