Average Monthly Earnings (AME)
Definition - What does Average Monthly Earnings (AME) mean?
Average monthly earnings is a statistic used by the Social Security Administration to calculate an individual's Social Security benefits. To arrive at this number, the Social Security Administration uses the top-earning 35 years of a person's career after age 21 to calculate a monthly average for their earnings.
Insuranceopedia explains Average Monthly Earnings (AME)
Social Security is essentially insurance that protects retirees from poverty. However, even though it is designed to help retirees earn a stable monthly income once they become eligible, the amount they receive is dependent on the amount they put in. Therefore, the higher a person's average monthly earnings, the more they would receive in Social Security benefits upon retiring. There is a maximum amount however, which is set at $2,663 per month as of 2015.
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