(FORTUNE Magazine) – The fellow whose breakfast one eats every morning recently turned 70, prepared to receive Social Security benefits, and became instantly suspicious of the monthly amount the Social Security Administration was proposing to pay. So he called the Social Security Administration's 800 number and stated that he yearned to learn the benefit-calculation formula and check the figures for himself. The request for the formula engendered dismay on every one of the numerous extensions we were bounced around to, with the SSers invariably stressing the difficulties a mere payee would have in getting it straight. But finally we got the bright idea of representing ourselves not as a mere beneficiary but as a journalist who wished to explain it all to his readers -- who proposed to tell them, or at least the oldies among them, exactly how to calculate their own future benefits. Journalists get more respect from the bureaucracy than do pensioners, so now we know how to do it (and have ceased fretting about our own account). The calculation of retirement benefits turns out to be mind-bogglingly complex but ultimately doable without any higher math. The instructions below assume an individual who had no significant earnings before 1951 but earned at least the maximum taxable amount in every year of his post-1950 working life. The maximum was $3,600 in 1951 and is now $60,600. There are, unluckily, 13 steps: (1) Assemble year-by-year data on your taxable earnings for each year since 1951. If you don't have the figures, SSA will get them for you. Allow severalweeks for this. (2) Note the number of earning years in which you were at least 22 but not yet 62. (3) Delete the five lowest-earning years. (4) To get your "monthly divisor," multiply the remaining years by 12. (5) We now make an inflation adjustment for all earnings subject to Social Security tax in the years up to and including the one in which you turn 60. Just to make things tough, SSA does not use any widely published time series in this adjustment. What you need instead are its own data on "average wages" for each year since 1950. The data are in Appendix A of an SSA publication snappily titled Determination of Primary Insurance Amount and Maximum Family Benefit (hereafter Determination). To make the inflation adjustment, you focus on the years in step 2, for each of which you multiply your own taxable earnings by the average wage in the year when you turned 60. You then divide the products by the average wage for each particular year. (6) Add up all the figures generated by this calculation and divide the sum by your monthly divisor. This gives you Average Indexed Monthly Earnings (AIME). (7) We now divide AIME into three parts, reflecting "bend points" also available in Appendix A. You look up the bend points for the year in which you turn 62. If you were born in 1925, you would get the bend points for 1987, which are $310 and $1,866. (8) In this example, multiply the first $310 of AIME by 90%, the rest of AIME by 32%, and anything above $1,866 by 15%. (9) Add up the three products thusly derived. The sum is your AIME Primary Insurance Amount (PIA), reflecting the monthly benefit you could get if you were now 62. (10) Assuming that you kept working past 62, we now need to apply cost-of- living increases to the AIME PIA. The inflation percentages for each year are in Appendix A. (11) For each post-62 working year, you multiply the AIME PIA by 1 plus the inflation percentage, calculating the figure out to the penny but then rounding it down to the nearest dime before carrying it over to the following year's inflation adjustment. (12) We also need to add a "delayed retirement credit" reflecting any contributions between ages 62 and 70, and begin by calculating the total "increment months." (13) On page 19 of Determination, you see how much to add for your own increments. And that, basically, is it. An interesting question is whether all this complexity is driven by the statutes or by bureaucratic imperatives -- by, say, a desire to maximize mystification in order to keep kibitzers at bay. One of course suspects the worst.