What are the Social Security bend points and why do they matter?

Bend points are the income thresholds in the benefit formula that make Social Security progressive. For 2025, your PIA equals 90% of your first $1,226 of average indexed monthly earnings, plus 32% of earnings between $1,226 and $7,391, plus only 15% above $7,391. So the first dollars of average earnings buy a lot of benefit, and the last dollars buy very little. This is why a worker earning twice as much as another does not get twice the check — the replacement rate falls as income rises. It also explains why high earners get a relatively low percentage of their pay replaced and need substantial personal savings on top of Social Security. Understanding bend points helps you set realistic expectations: see how your number fits a full plan at wealthserene.com/tools/retirement-planner.