Automatic Determinations

Retirement test exempt amounts

Wage-indexed amounts

Determination of the Exempt Amounts for 2017
Ordinarily the exempt amounts are determined according to formulas set by law. The formulas are applicable only if a cost-of-living increase becomes effective for December of the year in which a determination of the exempt amounts would ordinarily be made. Because there is a cost-of-living increase for December 2016, the exempt amounts for 2017 are computed according to the statutory formulas.

Determination of the Lower Exempt Amount for 2017
The monthly exempt amount for 2017 is determined to be the larger of:

  • the 1994 monthly exempt amount multiplied by the ratio of the national average wage index for 2015 to that for 1992, or
  • the 2016 monthly exempt amount of $1,310.
If the amount so determined is not a multiple of $10, we round it to the nearest multiple of $10. The annual exempt amount is then 12 times the rounded monthly exempt amount.

Calculation details for lower monthly exempt amount
Amounts in
formula
1994 monthly exempt amount$670
1992 average wage index22,935.42
2015 average wage index48,098.63
Computation$670 times (48,098.63 divided by 22,935.42) equals $1,405.08, which rounds to $1,410
Higher amount$1,410 exceeds the monthly exempt amount for 2016, so the monthly exempt amount for 2017 is $1,410

The annual exempt amount for 2017 is 12 times the monthly amount $1,410, or $16,920.


Determination of the Higher Exempt Amount for 2017
The monthly exempt amount for 2017 is determined to be the larger of:

  • the 2002 monthly exempt amount multiplied by the ratio of the national average wage index for 2015 to that for 2000, or
  • the 2016 monthly exempt amount of $3,490.
If the amount so determined is not a multiple of $10, we round it to the nearest multiple of $10. The annual exempt amount is then 12 times the rounded monthly exempt amount.

Calculation details for higher monthly exempt amount
Amounts in
formula
2002 monthly exempt amount $2,500
2000 average wage index32,154.82
2015 average wage index48,098.63
Computation$2,500 times (48,098.63 divided by 32,154.82) equals $3,739.61, which rounds to $3,740
Higher amount $3,740 exceeds the monthly exempt amount for 2016, so the monthly exempt amount for 2017 is $3,740

The annual exempt amount for 2017 is 12 times the monthly amount $3,740, or $44,880.