Do IRA contributions count toward Social Security earnings limit when working part-time at 63?

The earnings test is based on your gross wages before any deductions like taxes, insurance, or retirement contributions. So yes, money you put into an IRA still counts toward the annual earnings limit for Social Security purposes. The SSA looks at what you earned (your W-2 or net self-employment income), not what you kept after contributions. Just make sure you're tracking your income carefully since you're working part-time. At 63, for every $2 you earn above the annual limit ($22,320 in 2025), the SSA withholds $1 in benefits. Once you reach your Full Retirement Age, the earnings test no longer applies.

They look at gross earnings i think. My brother tried to do somethin similar with his 401k contributions and SSA still counted his full salary b4 deductions. their rules are so complicated!!

To add a bit more detail to what others have said - the earnings test is based on your gross wages before any deductions. This means: 1. Traditional IRA contributions still count toward the earnings limit 2. Roth IRA contributions still count toward the earnings limit 3. 401(k) contributions still count toward the earnings limit Basically, the SSA looks at Box 1 of your W-2 form plus any excluded amounts like retirement contributions or health insurance premiums. It's your gross earnings that matter. However, one thing to consider: while you can't exclude IRA contributions from the earnings test, they could potentially lower your taxable income, which might help with whether your Social Security benefits themselves are taxable (which is a separate issue from the earnings test). If you're concerned about exceeding the limit, you may want to work with your employer to strictly limit your hours/earnings to stay under the threshold.

Have u tried calling the ssa??? They should be able to answer this! They're the experts!!

i had the EXACT same question when i started my ss at 62!!! from what i was told by my tax guy, IRA contributions DO NOT reduce your countable income for the earnings test. its super unfair because that money is for retirement anyway!!!! i ended up having to cut back my hours at work to stay under the limit which really hurt my budget. the whole system needs an overhaul if you ask me!

One strategy some people use is to carefully plan their work hours to stay just under the annual earnings limit. Since you mentioned your health is improving, you could consider: 1. Working slightly fewer hours but asking for a small raise to maintain similar income 2. Concentrating your work hours differently throughout the year 3. Waiting until you reach your Full Retirement Age (FRA) when the earnings test no longer applies Also, keep in mind that any benefits withheld due to excess earnings aren't truly "lost" - they're credited back to you after you reach FRA in the form of a higher monthly benefit. The SSA recalculates your benefit amount to account for months when benefits were withheld.

wait i'm confused...aren't IRA contributions tax deductible? so wouldn't that mean they don't count toward earnings? someone plz explain this better!

Has anyone here actually called and SPECIFICALLY asked the SSA about this question? I've found their representatives often give contradictory information depending on who you talk to! The earnings test is such a PENALTY for seniors who are just trying to make ends meet in this economy. It's absolutely ridiculous that they count retirement savings against you when that money isn't even available for current expenses!

I just wanted to thank everyone for their helpful responses. I'm going to talk to my manager about adjusting my schedule to make sure I stay under the $22,320 annual limit. It's frustrating that retirement contributions still count toward the earnings test, but at least now I understand how it works. I'm also going to try that Claimyr service someone mentioned to get confirmation directly from SSA. Thanks again everyone!

Just wanted to add another perspective from someone who went through this exact situation last year. I'm 64 and was working part-time while collecting early SS benefits. One thing that helped me was keeping a monthly running total of my earnings throughout the year - not just relying on annual projections. This way I could adjust my hours in real-time if I was getting close to the limit. My employer was understanding when I explained the situation. Also, if you do accidentally go over the limit, report it to SSA as soon as possible. They appreciate the honesty and it makes the adjustment process much smoother than if they discover it later during their annual wage review. The whole system is definitely frustrating, but at least there's light at the end of the tunnel when you reach FRA!

I work as a benefits counselor and can confirm what others have said - IRA contributions absolutely DO count toward the Social Security earnings limit. The SSA uses your gross wages (before any deductions) to calculate whether you've exceeded the annual limit. One additional tip I always give clients in your situation: consider asking your employer if they can structure your compensation differently. For example, if they were planning to give you a small raise, you might ask them to contribute that amount to a workplace retirement plan instead (if available) OR provide non-cash benefits like additional health coverage. While retirement contributions still count as earnings, some employer-provided benefits might not. Also, double-check that you're using the correct earnings limit. Since you're 63 and won't reach Full Retirement Age until later, you're subject to the lower annual limit ($22,320 for 2025). The year you reach FRA, there's a higher monthly limit that applies only to earnings before the month you reach FRA. Keep excellent records of all your earnings throughout the year - it will save you headaches later!

As someone who just went through this process at age 62, I can confirm what everyone else is saying - IRA contributions definitely count toward your earnings limit. I learned this the hard way when I was trying to maximize my retirement savings while working part-time. What I found helpful was setting up a simple spreadsheet to track my year-to-date earnings every month. I included columns for gross pay, cumulative total, and how much "room" I had left before hitting the $22,320 limit. This helped me make informed decisions about picking up extra hours or saying no to overtime. One thing I wish someone had told me earlier: if you're close to the limit near the end of the year, you might want to consider taking unpaid time off rather than risk going over. The penalties for exceeding the limit can really hurt your monthly benefit payments. Also, don't forget that investment income (like dividends or interest from your IRA) doesn't count toward the earnings test - only wages and self-employment income do. That might give you some additional flexibility for your financial planning. Good luck navigating this - it's definitely one of the more confusing aspects of early retirement benefits!