Does retirement income count toward Social Security earnings limit or just W-2 wages?

The earnings limit only applies to wages or self-employment income. Your pension and 401k withdrawals don't count toward the annual earnings test limit. Only your $15,000 part-time income would count, which is below the 2025 limit for early retirees, so you won't face any benefit reductions from the earnings test. When you reach your Full Retirement Age (FRA), there's no earnings limit at all, so you can earn any amount without reduction. Just remember though - while your pension and 401k withdrawals don't count for the earnings test, they might still make your Social Security benefits taxable depending on your combined income.

ur brother in law is wrong!!! only WORK income counts - not retirement $$$. i got a pension from state govt + SS and they dont care about pension money at all for the limit thing. just what u EARN at a job

To add some additional clarity, the Social Security Administration only looks at "earned income" for the Annual Earnings Test (AET) that applies before Full Retirement Age. Here's what counts and what doesn't: Counts toward earnings limit: - Wages from employment (W-2 income) - Net earnings from self-employment - Bonuses, commissions, vacation pay - Certain deferred compensation Doesn't count toward earnings limit: - Pension payments - Annuities - Investment income - 401(k) or IRA distributions - Capital gains - Interest and dividends - Lottery/gambling winnings So your $15,000 part-time job is the only income that would count, and that's well below the 2025 limit of $22,320. You're in good shape!

When I retired 2 years ago I had similar confusion!!! The SSA website is SO confusing on this point. I ended up calling them directly and waiting HOURS to speak with someone (literally 3+ hours on hold). They confirmed pensions don't count toward earnings test. Only my part-time consulting work counted.

I'm actually dealing with EXACTLY this situation right now. I'm 63, took early SS last year, and I have pension, 401k AND part-time income. What everyone is saying is correct - only your W-2 income counts toward the earnings limit. But here's what nobody mentioned: if you go over the limit, they don't just reduce your benefits a little bit... they withhold ENTIRE MONTHS of benefits. When I accidentally went over by about $3,000 last year, they withheld 2 full months of my SS checks!!! So keep careful track of your part-time income and stay under that limit!

My uncle told me the earnings limit is different if u turn 62 in the middle of the year??? something about them only counting earnings for part of the year in the first year???

One more thing that tripped me up when I was in your situation - the earnings limit goes up significantly in the year you reach your Full Retirement Age (FRA). For 2025, that higher limit is $59,520 for the months before you reach FRA. And once you hit your FRA month, there's no limit at all. Based on your age (turning 62 next month), your FRA is probably 67, so that higher limit won't apply to you for a few years, but still good to know as you plan ahead!

I want to circle back to something important - even though your pension and 401k don't count for the earnings test, they WILL affect how much of your Social Security is taxable. Up to 85% of your benefits can be subject to federal income tax if your "combined income" (AGI + non-taxable interest + half of SS benefits) exceeds certain thresholds. For 2025, those thresholds are: - $25,000-$34,000 for individuals (50% of benefits may be taxable) - Above $34,000 for individuals (85% of benefits may be taxable) - $32,000-$44,000 for joint filers (50% of benefits may be taxable) - Above $44,000 for joint filers (85% of benefits may be taxable) So make sure you're accounting for potential tax implications in your overall retirement income planning.

Just wanted to add one practical tip from my experience - keep detailed records of your part-time earnings throughout the year! I use a simple spreadsheet to track my monthly income from work vs. my pension/401k withdrawals. This makes it much easier when you have to report your earnings to SSA at the end of the year. Also, if you're working for an employer (vs. self-employment), they'll automatically report your W-2 wages to SSA, so there's no hiding it even if you wanted to. The system is pretty much automated these days. But having your own records helps you stay on top of where you stand relative to that $22,320 limit throughout the year. Sounds like you're in great shape with only $15K in work income - that gives you a nice cushion under the limit!

I just want to say thank you to everyone who responded - this has been incredibly helpful! I was honestly losing sleep over this because my brother-in-law had me convinced that ALL my retirement income would count toward the limit, which would have put me way over. Now I understand it's only my $15,000 part-time income that matters for the earnings test, so I'm well under the $22,320 limit. The tax implications are something I definitely need to discuss with my accountant though - sounds like I'll owe taxes on a good portion of my SS benefits once you add in my pension and 401k withdrawals. One follow-up question: if I decide I want to work a few extra hours during busy season at my part-time job, how close to that $22,320 limit is it safe to get? Should I stay well under it just to be safe, or is it okay to get close as long as I don't go over?

Just want to add a personal perspective as someone who's been navigating this exact situation for the past year! I'm 63 and collecting early SS while working part-time, and I can confirm what everyone is saying - only your W-2 wages count toward the earnings limit. One thing that really helped me was setting up quarterly check-ins with myself to review my year-to-date earnings. Since part-time work can be unpredictable (some months you might work more hours, get called in for extra shifts, etc.), I found it useful to project out my total annual earnings every few months rather than just assuming I'd stay on track. Also, if you're planning to withdraw from your 401k anyway, consider the timing strategically. Since those withdrawals don't count for the earnings test but DO count toward the income thresholds that determine Social Security taxability, you might want to spread them out over multiple years if possible to minimize the tax hit on your SS benefits. Sounds like you're being really smart about planning this out ahead of time rather than figuring it out after the fact like I did!

As someone who just went through this process last year at age 62, I can definitely confirm what everyone is saying - only your earned income (wages/self-employment) counts toward the earnings limit, NOT your pension or 401k withdrawals. I was in a very similar situation with a state pension, some 401k distributions, and part-time consulting work. I was terrified I'd be way over the limit until I called SSA directly and they explained it clearly. Your $15,000 from part-time work is the ONLY thing that matters for the $22,320 limit. One tip I wish someone had told me earlier - if you're unsure about anything, create a "my Social Security" account online. You can actually report your estimated earnings for the year proactively, which helps avoid any surprises. The website also has a really helpful earnings test calculator where you can plug in different scenarios. Also, keep every paystub and track your earnings monthly. Part-time work can be unpredictable, and you don't want to accidentally go over because you picked up extra shifts during the holidays or something. Good luck with your retirement planning!

I'm going through a similar situation right now - turning 62 in a few months and trying to figure out all these earnings limits! This thread has been incredibly helpful. What I'm curious about is the timing aspect. Since you're turning 62 next month, are you planning to file for benefits immediately, or waiting until later in the year? I've read that the timing of when you first claim can affect how they calculate the earnings test in that first year. Also, has anyone dealt with the situation where your part-time employer offers you overtime or bonus pay? I'm wondering if there's a way to decline extra compensation if it would push you over the limit, or if you're just stuck once they pay it to you. Thanks to everyone who's shared their experiences - this is exactly the kind of real-world advice you can't find in the official SSA publications!