What term describes the total retirement benefits one should expect to receive based on lifetime earnings?

The term that describes the total retirement benefits one should expect to receive based on lifetime earnings is known as the Primary Insurance Amount (PIA). The PIA is a critical component of the Social Security Administration's calculations and serves as the foundational figure used to determine the monthly benefit a person will receive upon retirement or if they become disabled.

The PIA is calculated based on a worker's earning history, specifically the average indexed monthly earnings over their highest-earning 35 years of work. This indexation accounts for changes in average wages over time, ensuring that benefits keep up with the cost of living. Thus, a person's PIA reflects their lifetime earnings, taking into consideration the contributions made to Social Security through payroll taxes.

Understanding the PIA is essential for planning retirement, as it establishes the baseline of the Social Security benefits a retiree can expect. It is crucial since many individuals rely on these benefits as a significant source of retirement income.