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The social security benefits for a retired person are calculated on the basis of the the income for the last 35 years when the wages were the highest. The yearly statement only is an approximation of the social security benefits a person could receive and assumes that the salary of the person will not change from year to year.

It is often incorrectly assumed that retirement benefits depend only on the wages drawn in the last year. The wages in the earlier years are indexed by assigning a multiplier based on the cost of living.

You can estimate your retirement benefits directly using the website

http://www.socialsecurity.gov/planners/calculators.htm

It also a person to find out how earnings, pensions and different retirement dates can affect the benefits they receive.