Does Social Security count retirement account withdrawals toward $1860 earnings limit?
I started collecting SS retirement benefits last year at 64, so I know I'm under the full retirement age and subject to the earnings limit (I think it's $1860/month for 2025?). I'm thinking about taking some money from my 401k to cover some home repairs. My neighbor told me that counts as 'earnings' and could reduce my SS check, but that doesn't sound right to me. Does anyone know if retirement account withdrawals count toward the monthly earnings limit for Social Security?
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Anderson Prospero
Good news - retirement account withdrawals (401k, IRA, etc.) do NOT count toward the earnings limit. The earnings limit only applies to wages from employment or net earnings from self-employment. Investment income, pensions, annuities, interest, and retirement account distributions are all exempt from the earnings test calculation.
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Ahooker-Equator
•Thank you! That's what I thought but wasn't 100% sure. My neighbor had me worried!
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Tyrone Hill
your neighbor is wrong... i went thru this last yr. took out 15k from my ira and it didnt affect my ss at all. only work income counts
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Toot-n-Mighty
•I get SS and I took $$ from my 403b last year because I had a leaky roof too! Small world! Anyway my son thought the same thing that it would count but it doesn't count at all. But remember you still pay TAXES on it and that might push your income up so you might have to pay taxes on your SS benefits if your total income is high enough!!
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Lena Kowalski
To clarify what others have said, the Social Security earnings limit only counts earned income - meaning income from actual work. For 2025, that limit is indeed $1,860/month ($22,320/year) if you're under full retirement age for the entire year. Here's what doesn't count toward the earnings limit: - Pension payments - Annuities - Investment income - Interest - 401(k)/IRA withdrawals or distributions - Capital gains - Rental income (as long as you're not actively managing properties as a business) You can take as much from your retirement accounts as you need without affecting your Social Security benefits. However, as someone mentioned, there could be tax implications depending on your overall income.
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DeShawn Washington
•what about if you sell a house? does that count as earnings?
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Lena Kowalski
•No, selling a house would generally fall under capital gains, which doesn't count as earnings for the Social Security earnings test. Only wages from a job or net profit from self-employment business activities count toward the earnings limit.
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Mei-Ling Chen
I spent HOURS on the phone with Social Security last year trying to get a straight answer about this exact question. Their hold times are ridiculous - I got disconnected twice after waiting over an hour! Finally I found this service called Claimyr (claimyr.com) that got me connected to an agent in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed what others are saying - retirement account withdrawals don't count toward the earnings limit. Only work income counts. Such a relief since I needed to take out money for a new car!
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Ahooker-Equator
•I've had the same experience with the SSA phone lines - thanks for the tip about Claimyr! I'll check it out if I need to talk to someone. It's such a relief knowing I can take money from my 401k without affecting my benefits.
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Sofía Rodríguez
The SSA doesnt care about retirement withdrawals but the IRS sure does!!!! Remember that your going to pay taxes on whatever you take out of that 401k and if its a big amount it might push you into a higher tax bracket AND make more of your social security taxable too!!!!!! My brother in law took out $50k for a new roof and ended up owing the IRS a fortune because of it!!!!
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Lena Kowalski
•This is an important point about taxes, but to clarify: withdrawals from traditional retirement accounts are taxed as ordinary income, and depending on your total income, up to 85% of your Social Security benefits may become taxable. However, this is separate from the earnings test that can reduce your Social Security benefits if you're working. The tax implications are real, but they don't affect your monthly Social Security payment amount - just how much of that payment might be subject to income tax.
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Toot-n-Mighty
I was soooo confused about this when I first started collecting SS too! I thought ANY money coming in counted against that limit, but nope, it's only money you EARN from working. I've taken money from my IRA every year and it's never affected my SS check at all. Your neighbor is mixing up the rules. But do watch out for the tax stuff others mentioned.
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Tyrone Hill
btw that earnings limit goes up when u hit your full retirement age... then it's higher (like $4000/month i think?) and then after your birthday month in your full retirement age year the limit goes away completely and u can earn whatever u want
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Anderson Prospero
•That's correct. For 2025, if you reach full retirement age during the year, the earnings limit increases to $4,960/month ($59,520/year) until the month you reach full retirement age. Then once you hit your full retirement age month, there's no more earnings limit at all - you can earn any amount without affecting your Social Security benefits.
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Ahooker-Equator
Thanks everyone for the helpful answers! Just to make sure I've got this straight: I can take money from my 401k for my home repairs without any impact on my Social Security benefits, even though I'm under full retirement age. The earnings limit only applies to actual work income. I'll still need to pay income tax on the withdrawal, and that might affect how much of my Social Security gets taxed, but it won't reduce my monthly SS payment. Does that sound right?
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Lena Kowalski
•You've got it exactly right. Your 401k withdrawal won't count toward the earnings limit and won't reduce your Social Security payment. The only consideration is the potential tax impact.
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