(a) Who is eligible for this method. If after 1978, you reach age 62, or become disabled or die before age 62, we will compute your primary insurance amount under the average-indexed-monthly-earnings method.

(b) Steps in computing your primary insurance amount under the average-indexed-monthly-earnings method. We follow these three major steps in computing your primary insurance amount:

(1) First, we find your average indexed monthly earnings, as described in § 404.211;

(2) Second, we find the benefit formula in effect for the year you reach age 62, or become disabled or die before age 62, as described in § 404.212; and

(3) Then, we apply that benefit formula to your average indexed monthly earnings to find your primary insurance amount, as described in § 404.212.

(4) Next, we apply any automatic cost-of-living or ad hoc increases in primary insurance amounts that became effective in or after the year you reached age 62, unless you are receiving benefits based on the minimum primary insurance amount, in which case not all the increases may be applied, as described in § 404.277.