Will IRA withdrawals affect my Social Security benefits before full retirement age?
I'm 62 and just started receiving my Social Security retirement benefits last month. My husband reached his full retirement age (67) earlier this year and is also receiving his benefits. We both claimed based on our own work records. We have a financial situation where we need to withdraw about $8,500 from our IRAs in January to cover some unexpected home repairs. We have separate IRA CDs - one in my name and one in his. Since we file taxes jointly, I'm thinking the tax impact would be the same regardless of which account we withdraw from, but I'm worried about the earnings test. Will withdrawing from my IRA count as "income" that could reduce my monthly Social Security payment since I'm still under FRA? Or should we just take it from his account to be safe?
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Zara Mirza
IRA withdrawals don't count toward the Social Security earnings test! Only wages from employment or net earnings from self-employment count. You can withdraw from either IRA without affecting your SS benefits. The earnings test only looks at work income, not investment income or distributions.
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Sean Kelly
AuthorOh thank you so much! That's a huge relief. I was worried I'd have to calculate some complicated reduction in my benefits if we used my IRA.
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Luca Russo
The previous commenter is absolutely correct. IRA distributions are NOT counted as earnings for the Social Security annual earnings limit test. However, there's another consideration - Required Minimum Distributions (RMDs). Is your husband already taking RMDs? If he's over 73, he needs to take those anyway, so it might make sense to take additional funds from his IRA first. Just something to consider for your overall retirement planning.
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Sean Kelly
AuthorHe just turned 67 so we don't have to worry about RMDs yet, but that's good to think about for the future! We're still learning all these retirement rules.
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Nia Harris
my sister said ANY income affects ur benefits if ur under FRA. she had to pay back like $2000 to SS last year when she took money from her 401k. are u SURE ira doesnt count??
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Luca Russo
Your sister might be confusing two different issues. The earnings test only counts work income (employment wages or self-employment earnings). However, IRA/401k withdrawals can potentially make more of your Social Security benefits taxable on your income tax return. That's separate from the earnings test and doesn't actually reduce your monthly benefit amount - it's just about how much of your benefit is taxable.
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GalaxyGazer
I ran into this exact situation last year! Needed to withdraw from either my IRA or my husband's. Called SSA directly to confirm and they verified that IRA withdrawals DO NOT count against the earnings test. Only work income matters for that. But fair warning - trying to get through to SSA on the phone was a nightmare. I spent over 2 hours on hold and got disconnected twice. I ended up using this service called Claimyr (claimyr.com) that got me connected to an agent in under 10 minutes. They have a video showing how it works here: https://youtu.be/Z-BRbJw3puU. Saved me so much frustration!
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Sean Kelly
AuthorThat's really helpful to know! I tried calling SSA last week and gave up after being on hold for 45 minutes. I might try that service if I need to confirm anything else. Did you end up withdrawing from your IRA or your husband's?
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GalaxyGazer
We ended up using mine because it had slightly better terms for early withdrawal. But the SSA agent confirmed it wouldn't affect my benefits at all, which was such a relief!
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Mateo Sanchez
THESE SSA RULES ARE SO CONFUSING!!! My neighbor lost $340 a month because she was "over the limit" but she swears it was from selling stocks not from working!! The whole system is designed to trick seniors!!! They don't want us to understand our own benefits!!
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Luca Russo
There must be more to your neighbor's story. Stock sales and IRA distributions definitely don't count for the earnings test. Either she also had work income she's not mentioning, or there was some other adjustment to her benefits for a different reason. The earnings test rules are actually quite straightforward - only work income counts.
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Aisha Mahmood
When i was deciding which account to withdraw from, i also looked at the tax brackets. If one of you has other income that might push you into a higher bracket, it might be better to take from the other person's IRA. just something else to think about.
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Sean Kelly
AuthorThat's a good point, but since we file jointly I think our tax brackets are combined anyway. We're both pretty much just living on our Social Security now since we retired.
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Ethan Moore
i had this same question last month! i thought for sure ira withdrawals would count against the earnings test but they definitely don't. one less thing to worry about lol
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Sean Kelly
AuthorIt's such a relief! I've been stressing about this decision for weeks!
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Zara Mirza
Although IRA withdrawals don't affect the earnings test, just remember they DO count as income for determining if your Social Security benefits are taxable. If your combined income (adjusted gross income + nontaxable interest + half of your Social Security benefits) exceeds $32,000 for joint filers, up to 50% of your benefits may be taxable. Above $44,000, up to 85% may be taxable. So plan accordingly!
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Sean Kelly
AuthorThank you for that reminder. We're aware of the taxation thresholds and have been planning our withdrawals to try to minimize the tax impact. It's like a complicated puzzle trying to balance everything!
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Emily Jackson
Just wanted to add another perspective - since you mentioned you have IRA CDs, make sure to check if there are any early withdrawal penalties from the CD itself (separate from IRA penalties). Some CDs have penalties for early withdrawal even within an IRA. Also, if you're withdrawing before age 59½, don't forget about the 10% early withdrawal penalty on the IRA distribution for tax purposes. But as everyone else confirmed, none of this affects your Social Security earnings test - only actual work income counts for that!
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