What counts as income for Social Security Administration (SSA) benefits?

What if I have a part-time job but also get dividends? Do I only need to worry about the part-time income for the SSA calculation?

Yes, you only need to worry about your part-time job income for the earnings test. Your dividends won't count toward the $22,320 limit. Only wages from employment or net profits from self-employment are counted. Keep in mind that while investment income doesn't affect the earnings test, both your wages and investment income might affect whether your Social Security benefits are taxable. That's a separate calculation from the earnings test that reduces benefits.

Did it actually help with the Social Security earnings limit specifically? I thought most tax tools just handled the tax calculations but not benefit implications.

How accurate is this compared to using an actual financial advisor? I'm skeptical about online tools getting this right because the rules seem complicated and I'm worried about missing something important.

It actually does handle Social Security earnings implications. The service analyzes your income sources and categorizes them according to SSA rules, showing you which ones count toward the earnings test and which don't. It gives you personalized guidance based on your specific situation. As for accuracy compared to a financial advisor, I initially had the same concern. What I liked is that it shows you the actual IRS and SSA rules it's using to make determinations, with links to the official sources. I actually had my accountant review some of the recommendations, and he was impressed with how accurate the guidance was. The difference is that it's more affordable than paying for multiple advisor sessions, especially for these specific questions.

How much does this service cost? Seems like it should be free to call the government agencies we pay for with our taxes...

Is this even legit? How do they get you through when the official lines are all busy? Sounds too good to be true, and I've been scammed before with "helpers" for government services.

I completely agree that it SHOULD be free to call government agencies we fund with our taxes. The problem is that the SSA is understaffed and overwhelmed. I don't think Claimyr should have to exist, but given the reality of 2-3 hour hold times or not getting through at all, I found it worth it. They don't advertise their pricing publicly, but it was less than what I'd pay for an hour with a financial advisor to get the same information. It is legitimate - they're not doing anything shady. They use automated technology to handle the waiting for you, essentially staying on hold so you don't have to. They don't have special access or backdoor connections to the SSA. When an agent finally answers, you get connected directly to the official SSA representative. I was skeptical too, but it worked exactly as advertised.

Did you have to pay taxes on your Social Security benefits because of your total income though? I heard that's a separate issue from the earnings test.

Yes, I did have to pay taxes on 85% of my Social Security benefits because my combined income was high enough. That's definitely a separate issue from the earnings test. The taxation of benefits happens when your "combined income" (adjusted gross income + nontaxable interest + half of your Social Security benefits) exceeds certain thresholds. For 2025, up to 50% of benefits can be taxable if your combined income is between $25,000-$34,000 for single filers ($32,000-$44,000 for joint), and up to 85% taxable above those upper limits.

But the original poster is only 62, so they'd still be subject to the lower limit, right? The higher limit only applies in the year you reach full retirement age.

@3242c6255131 Thanks for mentioning the importance of checking your Social Security statement! I'm new to all this and just created my account at ssa.gov last week. It's amazing how much information is available there. I have a follow-up question for the group - does anyone know if there are any special considerations for inherited assets? I recently inherited some stocks from my grandmother, and I'm planning to sell some of them for living expenses. I assume the capital gains from inherited stocks would still be considered unearned income and wouldn't count toward the earnings limit, but I want to make sure I'm not missing anything. Also, has anyone dealt with how Social Security benefits interact with Required Minimum Distributions (RMDs) from retirement accounts? I won't hit that for several years, but I'm trying to plan ahead.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The good news is you'll also get a "stepped-up basis" on inherited assets, which means the cost basis is adjusted to the fair market value at the time of inheritance, potentially reducing your capital gains tax liability. Regarding RMDs, those are also considered unearned income, so they won't affect your Social Security benefits under the earnings test either. However, both inherited stock gains and future RMDs will count toward your total income for determining whether your Social Security benefits are taxable (that separate calculation I mentioned earlier). Since you're planning ahead, you might want to consider the timing of when you sell inherited assets versus when you start taking RMDs to manage your overall tax situation. The earnings test won't be a concern, but managing your total income across different years could help with tax planning.

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the SSA earnings limit. The "stepped-up basis" rule usually means you'll have minimal capital gains anyway since the cost basis resets to the fair market value at the time of inheritance. Regarding RMDs, those are also considered unearned income for Social Security purposes, so they won't reduce your benefits either. However, RMDs will definitely impact the taxation of your Social Security benefits since they count toward your "combined income" calculation. Many people are surprised by how much their tax situation changes once RMDs kick in at age 73. Since you're planning ahead (which is smart!), you might want to consider doing some Roth conversions in the years between now and when RMDs start. This can help reduce the size of future RMDs and potentially keep more of your Social Security benefits from being taxable. Just make sure any conversion income doesn't push you over the earnings limit if you're still under full retirement age.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the Social Security earnings limit. The good news is you also get a "stepped-up basis" on inherited stocks, meaning the cost basis is adjusted to the fair market value at the time of inheritance, which can significantly reduce your capital gains tax liability. Regarding RMDs, they're also considered unearned income for Social Security purposes, so they won't reduce your benefits either. However, they will count toward your total income for determining whether your Social Security benefits are taxable. This is something to keep in mind for tax planning once you start taking RMDs at age 73. I'd recommend consulting with a tax professional when you get closer to RMD age, as the interaction between Social Security benefits, RMDs, and overall tax strategy can get complex. But the key point is that neither inherited asset sales nor RMDs will trigger the earnings test that reduces your monthly Social Security payments.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The good news is you'll also get a "stepped-up basis" on inherited assets, meaning the cost basis resets to the fair market value on the date of inheritance, which can significantly reduce your capital gains tax liability. Regarding RMDs from retirement accounts - those are also considered unearned income, so they won't affect your Social Security benefits under the earnings test. However, like other investment income, RMDs will count toward your "combined income" for determining how much of your Social Security benefits might be taxable. It sounds like you're doing smart planning by thinking ahead! The key thing to remember is that only wages and self-employment income count for the earnings test that can reduce benefits. All other income (dividends, capital gains, pensions, RMDs, etc.) is considered "unearned" and won't trigger benefit reductions, though it may affect taxation.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct that any capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The key thing with inherited assets is that you typically get a "stepped-up basis" equal to the fair market value at the time of inheritance, which can reduce your capital gains tax burden when you sell. Regarding RMDs - those are also considered unearned income for Social Security purposes, so they won't affect the earnings test either. However, they will count toward your "combined income" for determining whether your Social Security benefits are taxable. Since RMDs are required and can be substantial, many people find that once they start taking them (at age 73), a larger portion of their Social Security becomes taxable. It's smart that you're planning ahead for this. You might want to consider strategies like Roth conversions in the years before RMDs kick in, since Roth distributions aren't counted as income for Social Security taxation purposes. Definitely worth discussing with a tax professional as you get closer to that age!

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the SSA earnings limit. The stepped-up basis rules for inherited assets actually work in your favor tax-wise too, since you typically only pay capital gains on appreciation after the date of inheritance. Regarding RMDs, those are also considered unearned income and won't affect your Social Security benefits under the earnings test. However, they will count toward your total income for determining whether your SS benefits are taxable (the combined income calculation that others mentioned earlier in this thread). One thing to keep in mind with RMDs - they're mandatory starting at age 73, so you can't control the timing like you can with other withdrawals. If you're already receiving Social Security by then, those RMDs could potentially push you into higher tax brackets or make more of your benefits taxable. It's worth doing some tax planning before you reach that age to optimize your withdrawal strategy. The key thing to remember is that the earnings test (which can reduce benefits) is completely separate from the taxation of benefits. Investment income, RMDs, pensions, etc. don't reduce your monthly payments, but they can affect your tax liability.

@d1ebf4b48088 Great questions! Yes, capital gains from inherited stocks are still considered unearned income and won't count toward the SSA earnings limit. The stepped-up basis rules for inherited assets actually work in your favor tax-wise too - you get the fair market value at the time of inheritance as your new basis, which can reduce your capital gains tax liability. For RMDs, those are also considered unearned income, so they won't affect your Social Security benefits from an earnings test perspective. However, they will count toward your "combined income" for determining if your Social Security benefits are taxable. Since RMDs are mandatory once you hit 73, it's smart that you're planning ahead - you might want to consider doing some Roth conversions in lower-income years before RMDs kick in to reduce future tax impacts. The key thing to remember is that the SSA earnings test only cares about earned income (wages, self-employment), but the IRS taxation of your Social Security benefits looks at your total income picture including all those unearned sources.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The good news is that inherited assets typically get a "stepped-up basis," meaning the cost basis is reset to the fair market value when your grandmother passed away, which can minimize your capital gains tax liability. Regarding RMDs from retirement accounts (401k, traditional IRA, etc.), those are also considered unearned income for Social Security purposes, so they won't reduce your benefits either. However, they will count toward your total income for determining whether your Social Security benefits are taxable - same as dividends and other investment income. One thing to keep in mind with RMDs is that they're mandatory starting at age 73 (changed from 70½ in recent years), and the amounts can be substantial depending on your account balances. It's smart that you're planning ahead! You might want to consider Roth conversions in the years before RMDs kick in to potentially reduce future tax impacts, but that's getting into broader retirement planning territory.

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the Social Security earnings limit. The stepped-up basis rules for inherited assets actually work in your favor tax-wise too, since you get a new cost basis at the fair market value when your grandmother passed away. Regarding RMDs, those are also considered unearned income and won't affect your Social Security earnings test. However, like other investment income, both inherited asset gains and future RMDs will count toward the "combined income" calculation that determines whether your Social Security benefits are taxable. So while they won't reduce your monthly SS payment, they could make more of your benefits subject to income tax. It sounds like you're doing smart advance planning! Since you have several years before RMDs kick in, you might want to consider strategies like Roth conversions during lower-income years to potentially reduce future RMD amounts and the associated tax impact on your Social Security benefits.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct that capital gains from selling them would still be considered unearned income and wouldn't count toward the SSA earnings limit. The stepped-up basis rules for inherited assets actually work in your favor tax-wise too. Regarding RMDs - those are also considered unearned income, so they won't affect your Social Security benefits from an earnings test perspective. However, they will count toward your total income for determining whether your Social Security benefits become taxable (the 85% rule mentioned earlier in this thread). Since you're planning ahead, you might want to consider the timing of when you sell inherited stocks versus when you'll start taking RMDs. Having both hit in the same years could push you into higher tax brackets and make more of your Social Security taxable. A tax professional could help you map out a strategy to spread that income over multiple years if needed. The fact that you're thinking about this now puts you way ahead of where I was at your age!

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the Social Security earnings limit. The IRS treats inherited assets with a "stepped-up basis," which can actually be tax-advantageous, but for SSA purposes, any gains are still unearned income. Regarding RMDs, those are also considered unearned income and won't affect your Social Security benefits under the earnings test. However, RMDs will be included in your total income for determining whether your Social Security benefits are taxable (that separate calculation I mentioned earlier). One thing to be aware of with inherited assets - if your grandmother had any retirement accounts like IRAs or 401(k)s that you inherited, those have different rules and timelines for required distributions depending on your relationship to the original owner and when they passed away. The SECURE Act changed some of these rules recently, so you might want to consult with a tax professional about the timing of those distributions to optimize your overall tax situation. But the bottom line for Social Security earnings test purposes - all of these are unearned income and won't reduce your monthly benefits!

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely right - the capital gains from selling them would still be considered unearned income and wouldn't count toward the SSA earnings limit. The good news is you also get a "stepped-up basis" on inherited assets, so you'll only pay capital gains tax on any appreciation since the date of inheritance, not from when your grandmother originally bought them. Regarding RMDs - those are also considered unearned income, so they won't affect your Social Security benefits under the earnings test either. However, RMDs will count toward your "combined income" for determining whether your Social Security benefits are taxable (just like your other investment income does now). One thing to keep in mind as you plan ahead: once you reach your full retirement age, the earnings test disappears completely, but the taxation of Social Security benefits continues based on your total income level. So RMDs, dividends, capital gains, etc. can still affect how much of your Social Security is subject to income tax even after you're past the earnings limit restrictions.

@d1ebf4b48088 Great questions! Yes, capital gains from inherited stocks are still considered unearned income and won't count toward the SSA earnings limit. The good news with inherited assets is that you typically get a "stepped-up basis," meaning the cost basis is adjusted to the fair market value when your grandmother passed away, which can significantly reduce your capital gains tax burden. Regarding RMDs, those are also considered unearned income, so they won't affect your Social Security benefits from an earnings test perspective. However, RMDs will count toward your overall income for determining whether your Social Security benefits are taxable (that separate calculation we discussed earlier in this thread). Since you're planning ahead, you might want to consider the timing of when you take capital gains versus when your RMDs kick in. Having both happening in the same years could push you into higher tax brackets and make more of your Social Security benefits taxable. A tax professional could help you strategize the timing to minimize your overall tax burden. The ssa.gov portal is definitely a great resource - I check mine every few months to make sure everything looks accurate!

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. One advantage of inherited assets is that you typically get a "stepped-up basis," which means the cost basis is reset to the fair market value on the date of inheritance, potentially reducing your capital gains tax. Regarding RMDs - those are also considered unearned income, so they won't affect your Social Security benefits from an earnings test perspective. However, RMDs will count toward your total income for determining whether your Social Security benefits are taxable. Since RMDs are mandatory once you hit 73 (for most retirement accounts), they could potentially push you into higher tax brackets and make more of your SS benefits subject to income tax. I'd suggest running some projections now to see how RMDs might affect your overall tax situation when the time comes. It might influence decisions about Roth conversions or other tax planning strategies before you're required to start taking distributions.

@d1ebf4b48088 Great questions! For inherited stocks, you're absolutely correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the SSA earnings limit. The same rules apply regardless of how you acquired the investments. One advantage with inherited stocks is that you typically get a "stepped-up basis," meaning the cost basis is reset to the fair market value at the time of inheritance. This can significantly reduce your capital gains tax liability when you sell, though it doesn't change the fact that any gains are still unearned income for SSA purposes. Regarding RMDs - those are also considered unearned income and won't affect your Social Security benefits under the earnings test. However, RMDs will count toward your total income for determining whether your Social Security benefits are taxable. Since RMDs are mandatory once you hit 73 (for most accounts), they can push you into higher tax brackets and potentially make more of your Social Security benefits subject to income tax. It's smart that you're planning ahead for this! The combination of Social Security, investment income, and future RMDs can create some complex tax situations, so consider working with a tax professional as you get closer to RMD age.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the Social Security earnings limit. The good news is you also get a "stepped-up basis" on inherited stocks, which means your cost basis is the fair market value on the date your grandmother passed away, potentially reducing your capital gains tax burden. Regarding RMDs, those are also considered unearned income, so they won't affect your Social Security benefits through the earnings test. However, RMDs will count toward your "combined income" for determining whether your Social Security benefits are taxable. Since you're planning ahead, you might want to consider Roth conversions in lower-income years before RMDs kick in to reduce future tax impacts. I learned a lot of this through trial and error, so it's smart that you're thinking about it now. The key is that the SSA only cares about earned income (wages, self-employment) for benefit reductions - all other income is fair game without affecting your monthly payments.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - the capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. Just keep in mind that inherited assets typically get a "stepped-up basis," which can reduce the capital gains tax you'd owe when you sell. As for RMDs, those are also considered unearned income for Social Security purposes, so they won't reduce your benefits either. However, RMDs will count toward the income thresholds that determine whether your Social Security benefits become taxable. Since you're planning ahead, you might want to consider doing some Roth conversions in the years before RMDs kick in to potentially reduce future tax impacts. The key thing to remember is that the SSA earnings test only cares about "earned income" - wages, self-employment income, etc. Almost everything from investments, pensions, and retirement accounts is "unearned" and won't affect your monthly Social Security payments before full retirement age.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - the capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The key thing with inherited assets is that you typically get a "stepped-up basis," meaning the cost basis is reset to the fair market value on the date of inheritance, which can significantly reduce your capital gains tax liability. Regarding RMDs from retirement accounts (401k, traditional IRA, etc.), those are also considered unearned income for Social Security purposes, so they won't affect the earnings test either. However, RMDs will count toward your "combined income" calculation for determining whether your Social Security benefits are taxable. Since you're planning ahead (which is smart!), you might want to consider doing some Roth conversions in the years before you're required to take RMDs. This could help reduce the size of future RMDs and potentially keep your combined income lower, which could reduce taxes on your Social Security benefits. Just something to discuss with a tax professional when the time comes.

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling them would still be considered unearned income and won't count toward the SSA earnings limit. The good news with inherited assets is that you typically get a "stepped-up basis," meaning the cost basis is adjusted to the fair market value at the time of inheritance, which can reduce your capital gains tax liability. Regarding RMDs, those are also considered unearned income for Social Security purposes, so they won't reduce your benefits either. However, they will count toward your total income for determining whether your Social Security benefits are taxable (the 50%/85% thresholds others mentioned earlier). Since you're planning ahead, you might want to consider doing some strategic Roth conversions in the years before RMDs kick in, especially if you're in a lower tax bracket now. This can help reduce the size of future RMDs and potentially keep you in a lower tax bracket when combined with your Social Security benefits. The SSA website has a good section on what counts as "wages" versus other income - definitely worth bookmarking for future reference!

@d1ebf4b48088 Great questions! For inherited stocks, you're correct - capital gains from selling inherited assets are still considered unearned income and won't count toward the SSA earnings limit. The only thing to keep in mind is that inherited assets get a "stepped-up basis," meaning your cost basis is the value of the stocks when your grandmother passed away, not what she originally paid for them. This can actually reduce your taxable capital gains significantly. Regarding RMDs, those are also considered unearned income and won't affect your Social Security benefits under the earnings test. However, RMDs will count toward your total income for determining whether your Social Security benefits themselves become taxable (that separate calculation we discussed earlier in this thread). Since you're planning ahead, you might want to consider doing some strategic Roth conversions in the years before RMDs kick in, especially if you're in a lower tax bracket now. This can help reduce future RMD amounts and potentially keep more of your Social Security benefits from being taxed later.