|
Automatic Determinations
Retirement test exempt amounts
Wage-indexed amounts |
Determination of the Exempt Amounts for 2026
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 2025, the exempt amounts for 2026 are computed according to the statutory formulas.
Determination of the Lower Exempt Amount for 2026
The monthly exempt amount for 2026 is determined to be the larger of:
- the 1994 monthly exempt amount multiplied by the ratio of the
national average wage index for 2024 to that for 1992, or
- the 2025 monthly exempt amount of $1,950.
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 index | 22,935.42 |
| 2024 average wage index | 69,846.57 |
| Computation | $670 times (69,846.57 divided by 22,935.42)
equals $2,040.39, which rounds to $2,040 |
| Higher amount | $2,040 exceeds the monthly
exempt amount for 2025, so the monthly exempt amount for 2026 is
$2,040 |
The annual exempt amount for 2026 is 12 times the monthly amount
$2,040, or $24,480.
Determination of the Higher Exempt Amount for 2026
The monthly exempt amount for 2026
is determined to be the larger of:
- the 2002 monthly exempt amount multiplied by the ratio of the
national average wage index for 2024 to that for 2000, or
- the 2025 monthly exempt amount of $5,180.
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 index | 32,154.82 |
| 2024 average wage index | 69,846.57 |
| Computation | $2,500 times (69,846.57 divided by 32,154.82)
equals $5,430.49, which rounds to $5,430 |
| Higher amount | $5,430 exceeds the
monthly exempt amount for 2025, so the monthly exempt amount for 2026
is $5,430 |
The annual exempt amount for 2026 is 12 times the
monthly amount $5,430, or $65,160.
|