Social Security income limits at 62 - are stock trading profits and CD interest counted as earned income?

I think investment income doesnt count for SS limits but not 100% sure

Good news! Neither your stock trading profits nor your CD interest count as "earned income" for Social Security purposes. The earnings limit only applies to wages from a job or net earnings from self-employment. Investment income like stock profits, dividends, interest from CDs or savings accounts, pension payments, annuities, and capital gains are all considered "unearned income" and don't count toward the annual earnings limit. It doesn't matter if you leave the money in your investment account or transfer it to your bank - it's still not counted as earned income either way. For 2025, the earnings limit for someone your age will be approximately $21,250/year (it's $21,240 for 2024 with a small COLA increase expected). You can earn up to that amount from an actual job without any reduction in benefits.

I went through this EXACT situation last year!!! I was so worried about my investment income counting against me when I took early retirement at 62. Called SSA like 5 times and kept getting different answers from different agents which drove me CRAZY!!!! Finally got connected to someone who actually knew what they were talking about. Here's the deal: stock profits, dividends, interest payments - NONE of it counts toward the earnings test. Only WORK income counts - like if someone is paying you a salary or you're running a business. Keeping the money in your trading account vs. transferring it makes absolutely no difference. It's about the SOURCE of the money, not where you keep it!!! BTW you should look into whether you might qualify for survivor benefits from your late husband instead of your own retirement - sometimes that pays more!

My brother tried to call SS about a similar question last month and spent 3 days trying to get through to a real person. He eventually gave up and just made a wild guess about his benefits lol. The system is so frustrating.

One thing no one has mentioned yet - while your investment income doesn't count against the earnings limit, it MIGHT affect how much of your Social Security is taxable. Up to 85% of your SS benefits can be taxable depending on your combined income (which does include investment income). The thresholds for taxation are pretty low too - if your combined income is over $25,000 for a single filer, a portion of your benefits becomes taxable. Over $34,000 and up to 85% becomes taxable. "Combined income" = Adjusted Gross Income + Nontaxable Interest + 1/2 of Social Security Benefits So keep that in mind for tax planning purposes. The earnings limit and taxation of benefits are two completely different issues.

My mom got so confused about all this she just stopped working completely at 62. Probably left money on the table tbh

I want to thank everyone for all the helpful responses! I understand now that my stock trading profits and CD interest won't count against the earnings limit (unless I somehow became a professional trader, which I'm definitely not with my tiny account). I'm going to look into the tax implications and also check if survivor benefits might be higher than my own retirement benefits. This community has been so helpful - I would have struggled to get clear answers otherwise!

Just wanted to add another perspective as someone who went through this recently. I'm 63 and took early retirement last year, and I was also confused about what counts as "earned income" for the earnings test. The key thing to remember is that Social Security distinguishes between "earned" and "unearned" income. Your stock trading profits and CD interest are considered unearned income (investment income), so they won't affect your Social Security benefits under the earnings test. The earnings test only applies to wages from employment or net earnings from self-employment. However, I'd echo what others have said about checking into survivor benefits. When I applied, the SSA representative calculated both my own retirement benefit and my potential survivor benefit from my deceased spouse. The survivor benefit ended up being about $200/month higher, which makes a real difference over time. Also, definitely plan ahead for the tax implications that Vanessa mentioned. While your investment income won't reduce your SS benefits, it will count toward determining how much of your Social Security is subject to federal income tax. With your CD interest and potential trading profits, you'll want to keep track of your total income to avoid surprises at tax time. Good luck with your retirement planning!

As someone who works in financial planning, I wanted to add a few clarifications to help ensure you get accurate information: 1. **Investment Income vs Trading as Business**: While most casual stock trading is considered investment income (not subject to earnings test), if you're trading frequently with the intent to profit from short-term market movements rather than long-term investment, the IRS *could* classify this as a trade or business. The key factors are frequency of trades, holding periods, and your intent. With a $4k account making occasional trades, you're almost certainly fine, but it's worth being aware of this distinction. 2. **CD Interest**: This is definitely unearned income and won't count toward the earnings limit. 3. **Documentation**: Keep good records of your investment activities and income sources. If there's ever a question, you'll want to be able to demonstrate that your trading is investment activity, not a business operation. 4. **State Taxes**: Don't forget that while we've been discussing federal rules, some states also tax Social Security benefits, and your investment income could affect that calculation too. The advice about checking survivor benefits is spot on - definitely worth exploring since survivor benefits can be significantly higher in many cases.

I'm glad you found this thread so helpful! As someone who just went through the early retirement process myself at 62, I wanted to share one more tip that might be useful. When you do apply for Social Security, consider timing your application strategically. You can apply up to 4 months before you want your benefits to start, which can help avoid any delays in processing. Since you mentioned retiring in June 2025, you could potentially apply as early as February 2025. Also, if you do end up with any work income after you start collecting (even part-time work), remember that the earnings limit is tested on an annual basis, not monthly. So if you worked part of the year before starting benefits, only the earnings after your benefits begin count toward the limit. One last thing - you mentioned being a widow, so make sure to bring documentation of your late husband's Social Security number and any marriage/death certificates when you apply. This will help them calculate both benefit options for you right away. Best of luck with your retirement! It sounds like you're doing great research and planning ahead.

I'm new to this community but wanted to share something that might help. My sister went through a very similar situation last year when she retired at 62. She was also worried about her small investment account and CD interest affecting her Social Security benefits. What really helped her was creating a simple spreadsheet to track all her different income sources and categorize them as "earned" vs "unearned" for Social Security purposes. This made it much easier when she met with the SSA representative and also helped her prepare for tax season. One thing she discovered that might be relevant to you - she was eligible for a small pension from a part-time job she had years ago that she'd completely forgotten about. It might be worth checking if you have any old 401k accounts or small pensions from previous employers that you could roll over or claim. Also, regarding the phone wait times others mentioned - she found that calling SSA first thing in the morning (right when they open) or late in the afternoon had much shorter hold times than calling mid-day. Just a tip that might save you some frustration! Sounds like you're getting great advice here. Best wishes for your retirement!

I just wanted to say thank you to everyone who contributed to this discussion! As someone who's also approaching retirement age, I've been quietly following this thread and learning so much from all your experiences and advice. The clarification about "earned" vs "unearned" income has been incredibly helpful - I had the same confusion about investment income and wasn't sure if my small stock portfolio would affect my Social Security benefits. It's such a relief to know that investment income doesn't count toward the earnings limit. I'm also taking notes on all the practical tips that have been shared - the timing advice for applications, the phone call strategies, the documentation to bring, and especially the reminder to check both retirement and survivor benefits. This is exactly why I love this community - real people sharing real experiences and helping each other navigate these complex government programs. You've all saved me (and I'm sure many other readers) hours of research and worry!

I'm really grateful to have found this thread! Like many others, I was completely confused about what counts as "earned income" for Social Security purposes. I have a mix of investment income from some mutual funds and occasional freelance work, and I was worried that ALL of it might count against the earnings limit when I retire next year at 62. Reading through everyone's experiences has made it so much clearer - it's really just about wages and self-employment income, not investment returns. The distinction between "earned" and "unearned" income makes perfect sense once someone explains it properly! I'm also taking notes on all the practical advice shared here - especially about applying 4 months early, checking both retirement and survivor benefits, and keeping good documentation. The tip about calling SSA early in the morning is gold too. One question I still have - if anyone knows - does rental income from a small property count as "earned" income for Social Security purposes, or is that also considered unearned? I have a small rental that brings in about $800/month and wasn't sure how that factors in. Thanks again to everyone who shared their knowledge and experiences. This community is such a valuable resource!

I just want to add my perspective as someone who recently went through this exact situation. I retired at 62 last year and was also very concerned about how my investment income would affect my Social Security benefits. Like you, I have a small trading account (mine's around $6k) and some CDs. I spent weeks worrying about whether I'd have to give up my modest investment activities. After multiple conversations with SSA and doing extensive research, I can confirm what others have said - your stock trading profits and CD interest are definitely considered "unearned income" and won't count against the earnings limit. What really put my mind at ease was getting this information directly from SSA in writing. When I applied, I specifically asked them to document in my file that my investment income wouldn't affect my benefits eligibility. Having that written confirmation gave me peace of mind. One additional tip that hasn't been mentioned - if you're using any online brokers for your trading, make sure you understand their tax reporting. Some platforms make it easier to track your investment income for tax purposes, which becomes important when you're managing multiple income sources in retirement. You're asking all the right questions and clearly planning well ahead. That preparation will serve you well in retirement!