Social Security earnings limit confusion - can I withdraw from annuity without reducing SS benefits?

Good news! Withdrawals from your annuity are NOT counted as earnings for Social Security purposes. The earnings limit only applies to wages from employment or net earnings from self-employment. The earnings limit for 2025 for someone your age (under Full Retirement Age for the entire year) is approximately $23,000. You can withdraw any amount from your annuity without it affecting your Social Security benefits. I think the formula you're referring to is how Social Security reduces benefits if you exceed the earnings limit. They reduce benefits by $1 for every $2 you earn above the limit. But again, this only applies to work income, not annuity withdrawals.

no no no the other guy is wrong!! my brother in law's retirement check got cut when he took money from his 401k last yr. they count ALL income against u. social security is TRICKY that way!!! better check with an agent directly!!!

I went through this exact thing last year! I was so worried about taking money from my annuity and IRA. Spent WEEKS trying to get answers from SS. Finally got through to someone who explained that annuity withdrawals DON'T count toward the earnings limit. Only actual work counts - like if you have a job or self-employment income. The formula you mentioned sounds like you're mixing up two different things. The $1 reduction for every $2 over the limit is how they reduce benefits if you work too much. The half of SS amount thing might be about taxation of benefits, which is a completely different issue. I ended up using a service called Claimyr (claimyr.com) to finally reach someone at Social Security after trying for days on my own. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Saved me hours of frustration and I got the answers I needed right away.

My mom is in exactly your situation and she takes money from her annuity all the time and still gets her full SS check. No problems. The people at the SS office told her investment income doesn't count towards the limit. Just FYI.

I think you're conflating the earnings limit with TAXATION of Social Security benefits. They're two separate issues! 1. EARNINGS LIMIT: Only applies to wages/self-employment. Annuity withdrawals DON'T count. For 2025, for someone your age, it's about $23,000 in EARNINGS. Exceed that, and benefits reduce $1 for every $2 over. 2. TAXATION OF BENEFITS: This is where your "half of SS plus base amount" might be coming from. For single filers, if your combined income (AGI + nontaxable interest + 1/2 of SS benefits) exceeds $25,000, up to 50% of your benefits may be taxable. Above $34,000, up to 85% may be taxable. IMPORTANT: Your annuity withdrawals DO count when calculating whether your benefits are TAXABLE, but they DO NOT count for the EARNINGS LIMIT that would reduce your benefits. So yes, withdraw from your annuity all you want - it won't reduce your SS check. But it might affect how much of your SS is taxable come tax time.

just wanna add my two cents. i take money from my ira every year and my social security checks stay the same. but my taxes did go up once i started taking more than like 30k total income. not fun but at least the monthly checks dont change!!

wait im confused now cause my cousin said when she took a big withdrawal from her retirement it put her over the tax thing and her benefits went down the next year??

Thank you everyone for the helpful responses! Just to make sure I'm 100% clear now: 1. My annuity withdrawals WON'T count toward the $23,000 earnings limit, so they won't reduce my monthly SS check 2. BUT those withdrawals WILL count for determining how much of my SS benefits are taxable 3. The formula I was confused about relates to taxation, not to the earnings test This is such a relief! I was so worried about losing part of my SS check if I took money from my annuity. Taxes are a separate issue, but at least my monthly income will stay consistent.

Great to see this got resolved! Just want to emphasize one more important point for anyone else reading this thread: if you're planning large withdrawals from retirement accounts or annuities, consider spreading them across multiple years if possible. While they won't affect your Social Security benefit amount, bunching large withdrawals into one year can push you into higher tax brackets and increase the taxation of your SS benefits significantly. A tax professional can help you strategize the timing to minimize the overall tax impact.

As someone who works in retirement planning, I want to add one more clarification that might help others: the Social Security Administration has a very specific definition of "earnings" that only includes wages from employment (W-2 income) and net earnings from self-employment. This is clearly outlined in their Publication 05-10069 "How Work Affects Your Benefits." What does NOT count as earnings for the Social Security earnings test: - Annuity payments - Pension benefits - IRA/401(k) withdrawals - Investment income (interest, dividends, capital gains) - Rental income - Social Security benefits themselves The confusion often comes from the fact that these same income sources DO count for determining if your Social Security benefits are taxable - but that's handled by the IRS, not SSA, and it's a completely separate calculation. Owen, you're absolutely safe withdrawing from your annuity without affecting your monthly benefit amount. Just keep good records for tax purposes!