Do IRA contributions count toward Social Security earnings limit when working part-time at 63?
I started collecting my Social Security retirement benefits early at age 63 due to some ongoing health issues (nothing major, but enough that full-time work wasn't sustainable anymore). My old company was great about keeping me on part-time (about 20 hours/week). I'm trying to be smart about my finances and was considering putting some money into an IRA since I still have earned income. My question is - does money I contribute to an IRA still count toward the Social Security earnings limit ($22,320 for 2025)? Or are IRA contributions excluded when the SSA calculates my earnings? I don't want to accidentally go over the limit and have benefits withheld. My financial advisor wasn't 100% sure about this specific question and I can't get through to SSA on the phone. Thanks for any help!
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CosmicCrusader
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.
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Aisha Rahman
•Thank you! That makes sense but is disappointing. I was hoping the IRA contributions might help me stay under the limit. Guess I'll need to watch my hours more carefully.
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Ethan Brown
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!!
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Yuki Yamamoto
•This is EXACTLY WHY so many people get caught in the earnings trap! SSA looks at your gross earnings for EVERYTHING. The threshold is way too low for people who still need to work part-time. Just another way the system is designed to take money back from hardworking people. I got hit with a $4,800 overpayment last year because I worked just a few extra hours covering for a sick coworker. Be EXTREMELY careful about tracking your hours!
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Carmen Ortiz
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.
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Aisha Rahman
•This is very helpful, thank you for the detailed explanation. I'll need to be more careful about my hours. My health has actually been improving, so I've been taking on a few more shifts lately. Might need to scale back to ensure I stay under that $22,320 limit.
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Andre Rousseau
Have u tried calling the ssa??? They should be able to answer this! They're the experts!!
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Aisha Rahman
•I've tried calling multiple times but can't get through. I've spent hours on hold only to get disconnected, and my local office has a 3-month wait for appointments. That's why I came here hoping for some advice from others who might have experience with this.
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Zoe Papadakis
•After going through this exact same situation last year (trying to get through to SSA about retirement earnings), I discovered a service called Claimyr that got me connected to a live SSA agent in about 15 minutes instead of waiting on hold all day. Their website is claimyr.com and they have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Saved me so much frustration! I was able to get a definitive answer about my earnings situation directly from SSA.
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Jamal Carter
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!
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Andre Rousseau
•I agree!!! The rules make no sense. My sister got caught by this too and had to pay back like $2000 last year. So frustrating!!
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CosmicCrusader
•Just to clarify - it's not that IRA contributions are specially excluded. It's that the earnings test is based on your gross earnings (your paycheck amount before ANY deductions). Whether it's health insurance, taxes, or retirement savings, the SSA looks at what you earned, not what you kept after deductions.
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Carmen Ortiz
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.
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Aisha Rahman
•That's interesting about the recalculation after FRA - I didn't realize that. So technically if I earn too much and have benefits withheld, I'll eventually get that money back in the form of higher payments later? That's good to know. Still, I'd rather not deal with the hassle of having benefits withheld in the first place. I'll talk to my manager about keeping my hours just under the threshold.
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Ethan Brown
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!
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Carmen Ortiz
•You're mixing up two different concepts: 1. Tax deductions: Yes, traditional IRA contributions may be tax-deductible on your income tax return (depending on your income and whether you have a workplace retirement plan). 2. Social Security earnings test: This is completely separate from taxes. The earnings test looks at your gross earnings before any deductions or contributions. So while IRA contributions might lower your taxable income for IRS purposes, they don't reduce your countable income for the Social Security earnings test.
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Yuki Yamamoto
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!
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CosmicCrusader
•While I understand the frustration, the earnings test exists because Social Security retirement benefits were designed as replacement income when you retire. If you're still working and earning substantial income, the program is designed to reduce benefits accordingly. The good news is that once you reach your Full Retirement Age, the earnings test goes away completely and you can earn any amount without affecting your benefits.
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Aisha Rahman
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!
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Carmen Ortiz
•Good plan. And remember - this is only temporary until you reach your Full Retirement Age. After that, the earnings test disappears completely and you can earn any amount without it affecting your benefits. Best of luck!
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