Social Security benefits and inherited IRA RMDs - will my required distributions reduce my SS payment?

The RMDs from your inherited IRA only affect your Social Security benefits in two potential ways: 1. If you're below your Full Retirement Age (FRA) and still working, only your work earnings count toward the earnings limit (which is $22,320 in 2025 if you're under FRA). IRA distributions don't count as "earnings" for this purpose. 2. However, those RMDs can potentially make your Social Security benefits taxable. If your combined income (adjusted gross income + nontaxable interest + 1/2 of Social Security benefits) exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85% of your benefits may be subject to federal income tax. Since you're 68, you're already past FRA, so the earnings limit doesn't apply to you anyway. You can earn any amount from working without reducing your benefits. The RMDs will only potentially affect how much of your Social Security is subject to income tax.

This happened to my dad last yr. The SS check stays the same but yeah more tax at end of year maybe. Not same as the thing where they reduce ur check if ur working to much.

Watch out! I made this mistake and it ended up costing me. The RMDs pushed my income high enough that 85% of my Social Security became taxable. I wasn't prepared for the big tax bill in April! You might want to have extra withholding from the IRA distributions to cover the increased tax on your Social Security benefits. Talk to a tax professional before you start taking distributions!!

This whole system is ridiculous!!! Why should we be PUNISHED for being responsible and having retirement savings? My husband and I are in the same boat - his parents left him an IRA and now we have to take money out we don't even need yet, AND it makes our SS get taxed more. Meanwhile people who never saved a penny get their SS tax-free. MAKES NO SENSE!!!!

My brother had same question last year. inheritance IRA doesnt count for earnings test only job income counts

I've been dealing with this exact scenario for about 3 years now. Here's what I learned: 1. As others said, RMDs don't count toward the earnings limit test because they're not earned income 2. But they absolutely do count when calculating how much of your SS is taxable 3. One strategy I use is to manage when I take my RMDs to minimize the tax impact. I often take my distribution in December, so I have better visibility into my total annual income and can adjust if needed 4. Also, consider qualified charitable distributions (QCDs) from the inherited IRA if you're charitably inclined. Those distributions don't count as income for determining SS taxation Hope that helps!

I had SUCH a hard time reaching anyone at Social Security to discuss this exact situation when my wife inherited her sister's IRA last year. After days of trying, I finally used a service called Claimyr (claimyr.com) to get through to an agent. They have a video demo at https://youtu.be/Z-BRbJw3puU that shows how it works. Was able to confirm directly with SSA that inherited IRAs don't affect the earnings test but can affect taxation of benefits. Being able to actually talk to a real person instead of just reading online was super helpful for our peace of mind.

Something else to consider - your RMDs will also factor into your Medicare IRMAA (Income-Related Monthly Adjustment Amount) calculation. If your income goes above certain thresholds, your Medicare Part B and D premiums can increase. For 2025, the first threshold is $103,000 for individuals. Just something else to be aware of when planning.

my uncle says he takes his rmds and puts them in a roth ira which helps with taxes or something. maybe something to look into?

I went through something similar when I inherited my mother's IRA two years ago. One thing that really helped me was working with a fee-only financial planner who specialized in retirement tax strategies. They helped me model out different scenarios for managing the RMDs over the 10-year period (since you're not a spouse, you'll need to drain the account within 10 years under current rules). We ended up spreading the distributions more evenly across years when my other income was lower, rather than just taking the minimum each year. This helped keep me out of higher tax brackets and reduced the impact on my Social Security taxation. It's worth running some projections to see if bunching distributions in certain years or smoothing them out works better for your specific situation. Also, don't forget to update your estimated tax payments if you're not having taxes withheld from the IRA distributions. The quarterly payment deadlines can sneak up on you!