Will $25k IRA withdrawal for home purchase affect my Social Security benefits when I reach FRA?

ur fine don't worry. IRA withdrawals dont count against SS benefits when ur at full retirement age. Only thing that counts is actual WORK income. I took out 18k from my 401k last year and my SS benefits werent touched at all

The previous comment is correct, but let me provide a more complete explanation. IRA withdrawals are not considered "earned income" by the Social Security Administration. Only earned income (wages, self-employment) counts toward the earnings test that might reduce benefits. However, there are two things to be aware of: 1. If you're collecting benefits BEFORE your Full Retirement Age, only earned income counts toward the earnings limit ($22,320 in 2025). IRA withdrawals won't affect this. 2. IRA withdrawals ARE considered income by the IRS for tax purposes, which could potentially make more of your Social Security benefits taxable. This doesn't reduce your actual benefit amount, but could increase your tax liability. Since you mentioned you're waiting until your FRA to collect, the earnings test won't apply to you anyway once you start collecting.

@profile7 - Yes, withdrawals from any retirement account (IRA, 401k, 403b, etc.) are treated the same way by Social Security. They don't count as earned income for the earnings test. Only wages from actual work or self-employment income count.

The SSA is TERRIBLE at explaining these distinctions!!! When I called them about a similar situation last year, I got 3 DIFFERENT ANSWERS from 3 different representatives! One told me ANY income would reduce benefits, which is WRONG. So frustrating trying to get accurate information from them.

Congratulations on your new house! We did something similar last year, took out about $30k from my husband's 401k for home repairs. I was also worried about SS implications but there weren't any. The only surprise was the tax bill - don't forget that withdrawal will be taxable income!

One clarification to the already good advice here: The earnings test applies only if you're working AND collecting Social Security before your Full Retirement Age. Since you mentioned you're waiting until FRA to collect, you wouldn't be subject to the earnings test anyway once you start benefits. Also, for anyone else reading this thread: if you're under 59½ years old, remember that early withdrawals from retirement accounts typically incur a 10% penalty in addition to income taxes, though there are exceptions including using up to $10,000 for a first-time home purchase.

my sister in law got told by her financial guy that IRA withdrawls would reduce her ss check and she held off taking money out for YEARS because of it!!! she was so mad when she found out that wasnt true. wished she had asked here first lol

Quick question piggy-backing on this thread - does anyone know if Roth IRA withdrawals are treated the same? We're considering pulling from our Roth for a kitchen renovation next year.

btw when u actually apply for SS make sure to check ur estimated benefit on the mySocialSecurity website bc sometimes they mess up the calculations.