Will 401k/403b withdrawals or home sale affect my Social Security widow benefits?

Retirement account withdrawals (401k/403b) DO count as income for Social Security purposes if you're under Full Retirement Age. If you're between 60-FRA, you can only earn up to $22,320 in 2025 before they start reducing your widow benefits ($1 reduction for every $2 earned over limit). The good news is that capital gains from selling your primary residence usually don't count toward this earnings test - only wages and self-employment income do. However, if you invest the profits and earn interest/dividends, THAT would count as income for tax purposes.

I think the previous answer is wrong!!! I just went through this last year and had my benefits CUT because I took money from my 401k!!! The SSA counted it as income and I lost 3 months of checks!!! Be VERY careful and talk to SSA directly before you do ANYTHING!!!! The rules are CRAZY complicated!!!!!

my dad had similar issue when he sold his farm. profit didnt affect his actual ss payment but he did have to pay more taxes on his benefits that year. something about combined income calculation. maybe thats what happened to the person above?

There's some confusion here that needs clarification. For Social Security's earnings test (which determines if benefits are reduced), only wages from employment or net earnings from self-employment count. 401k/403b withdrawals do NOT count toward the earnings test limit ($22,320 in 2025 if you're under FRA). Home sale profits also do NOT count toward the earnings test. HOWEVER, both retirement withdrawals and potentially some home sale profits (if above exclusion limits) DO count toward your "combined income" which determines if your Social Security benefits are TAXABLE. These are two completely different calculations: 1. Earnings test = benefit amount reduction 2. Combined income = taxation of benefits Many people confuse these two concepts. If your benefits were reduced after a 401k withdrawal, it was likely due to other factors or a misunderstanding.

I had the exact same concerns last year! I was also worried about losing my widow benefits when I needed to take money from my retirement accounts. I struggled for weeks trying to get through to someone at Social Security to explain the rules clearly - kept getting disconnected or waiting for hours. Finally, I found this service called Claimyr (claimyr.com) that got me connected to an actual SSA representative in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. The rep confirmed exactly what the helpful person above said - retirement withdrawals don't affect the earnings test, only earned income does. Saved me from making financial decisions based on incorrect information!

just wanted to add that if youre selling your house be sure you qualify for the capital gains exclusion which is $250,000 for single filers and $500,000 for married filing jointly. you need to have lived in the house as your primary residence for at least 2 out of the past 5 years. sounds like youre well under that amount anyway but something to keep in mind if your profit was bigger.

When my husband died I got so confused about all these rules. Ended up just putting everything off for a year because I was afraid of losing benefits. Wish I'd asked sooner like you did!

Thanks everyone for the helpful responses! So to summarize what I've learned: 1. 401k/403b withdrawals DON'T count for the earnings test that would reduce my widow benefits 2. Selling my home also WON'T reduce my benefits 3. BUT both might increase how much of my benefits are taxable This is such a relief. I was holding off on accessing my retirement funds because I thought I'd lose benefits. Going to schedule both transactions next month!

Great summary Jasmine! Just want to emphasize one more important point for anyone else reading this thread - make sure to keep good records of all your transactions. Even though these withdrawals won't affect your widow benefits directly, you'll want documentation for tax purposes since they could impact how much of your Social Security is taxable. Also, if you're planning major financial moves like this, it might be worth consulting with a tax professional to make sure you understand the full picture, especially since tax rules can be just as complex as Social Security rules!

I'm so glad to see this discussion because I've been in a similar situation since becoming widowed two years ago. The confusion between earnings test rules and taxation rules is something that trips up so many of us! One thing I learned the hard way is that even though retirement withdrawals don't affect the earnings test, timing can still matter for tax planning. I ended up taking a large 401k distribution in December and it pushed me into a higher tax bracket AND made more of my Social Security benefits taxable that year. If I had spread it across two tax years, I could have saved quite a bit. Also wanted to mention that some states have their own rules about taxing retirement income and Social Security benefits, so it's worth checking your state's tax situation too. The peace of mind from understanding these rules correctly is worth so much - I was losing sleep worrying I'd lose my benefits!

I've been following this thread as someone who's also navigating widow benefits, and I wanted to add my perspective since I went through a similar situation last year. Like many of you, I was terrified of making any financial moves that might jeopardize my benefits. The distinction between the earnings test and taxation that @729892634026 explained is crucial - I wish someone had explained it to me that clearly when I first started receiving benefits! One thing I learned that might help others: when I called SSA to confirm these rules, the representative suggested I request a written statement of how different types of income affect my specific situation. It took a few weeks to get, but having it in writing gave me the confidence to proceed with my retirement account withdrawals. Also, for anyone considering home sales, remember that if you're selling because you can no longer afford the upkeep or need to downsize, there might be additional resources available through local senior services that can help with the transition. The financial stress of widowhood is real, but understanding these rules correctly can open up options we might not have realized we had.

As someone who's been helping community members navigate Social Security issues for years, I want to reinforce the excellent clarification that's been provided here. The confusion between the earnings test and benefit taxation is probably the #1 misconception I see among widow/widower benefit recipients. Just to add one more practical tip: if you're planning both a 401k withdrawal AND a home sale in the same year, consider doing a rough calculation of your "combined income" first (adjusted gross income + non-taxable interest + half of Social Security benefits). If this pushes you significantly over the thresholds ($25,000 for single filers, $32,000 for married filing jointly), you might want to stagger the transactions across tax years as others have mentioned. Also, don't forget that you can always do a "trial run" calculation using tax software or consult with a tax professional before making any major moves. The peace of mind is worth the small investment, especially when you're dealing with amounts like $165,000 in home sale profits. Knowledge is power when it comes to protecting your financial security!