Will inheritance money from parents' home sale affect my Social Security retirement benefits?
I'm in a situation where my siblings and I recently inherited our parents' house after both passed within the last year. We're planning to sell the property soon and split the proceeds equally among the three of us. My portion will probably be around $137,000 after all expenses. I started collecting my Social Security retirement benefits early at 62, and I'm now 63. I'm worried this inheritance might reduce my monthly benefit amount or cause other problems with Social Security. Does anyone know if this kind of inheritance counts as income for Social Security purposes? Will I need to report it somehow? Really appreciate any advice from folks who've been through something similar!
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Diego Rojas
Good news! The inheritance from selling your parents' home will NOT affect your Social Security retirement benefits at all. Social Security retirement benefits are only affected by earned income (like wages from a job or self-employment). Unearned income like inheritances, interest, dividends, pension payments, and capital gains don't count against the earnings limit. So you can receive that money without any impact on your monthly Social Security checks.
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Chloe Martin
•That's a huge relief! Thank you for explaining. I was really worried because I know there's that earnings limit when you claim before your full retirement age.
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Anastasia Sokolov
i went thru this exact thing when my mom passed. got around 95k from house sale and SS never even asked about it. your fine dont worry about it at all
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Chloe Martin
•Thanks for sharing your experience. It helps to hear from someone who's already been through this process!
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Sean O'Donnell
Are you sure about this?? I thought ANY money you get counts as income!!! My cousin had to pay back $2000 to Social Security last year because she didn't report some money she got. Now I'm worried because I'm about to get an inheritance too and nobody told me this!!!!
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Diego Rojas
•Your cousin's situation was likely different. There's a distinction between earned and unearned income. For Social Security retirement benefits, only earned income (wages or self-employment) counts against the earnings limit. Inheritances definitely don't count. However, if your cousin was receiving SSI (Supplemental Security Income), that's different - SSI is needs-based and almost any money received, including inheritances, can affect those benefits.
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Zara Ahmed
From my experience dealing with SSA, they only care about EARNED income affecting your benefits before FRA. However, be careful about how the property sale is structured on your taxes. Make sure it's clearly documented as an inheritance rather than showing up as business income or something that could be misinterpreted as earned income. I'd recommend consulting with a tax professional just to be safe. The inheritance itself won't affect your SS retirement benefits, but proper documentation is always important when dealing with the government.
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Chloe Martin
•That's a great point about documentation. We're working with a real estate attorney for the sale, so I'll make sure to mention this concern specifically. Thank you!
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StarStrider
No effect on your Social Security retirement benefits, but don't forget this may have tax implications elsewhere. While the inheritance itself isn't typically taxable at the federal level, depending on your state there could be inheritance taxes. Also, if you invest that money and earn interest or dividends, those earnings would be taxable income (though still not counting against SS earnings limit). Just something to consider for your overall financial planning.
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Anastasia Sokolov
•yep thats right! put mine in a CD and the interest i get is taxable but doesnt mess with my SS check at all
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Luca Esposito
My brother got an inheritance last year and it was FINE with his SS checks but then he tried calling them about something else completely different and was on hold for THREE HOURS before giving up!! The whole system is broken if you ask me.
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Nia Thompson
•I had the same nightmare trying to reach someone at SSA about my benefits calculation. After getting disconnected twice and spending hours on hold, I found this service called Claimyr that got me through to a real person in about 20 minutes. You might want to check out their video demo at https://youtu.be/Z-BRbJw3puU to see how it works. Saved me a ton of frustration when I needed to verify that my inheritance wouldn't affect my benefits. Their website is claimyr.com if you need it in the future.
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Sean O'Donnell
What about Medicare premiums??? I heard that if your income goes up your Medicare costs go up too!! Will this inheritance money make your Medicare more expensive???
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Diego Rojas
•Great question about Medicare premiums. Medicare Part B and Part D premiums can be affected by what's called IRMAA (Income-Related Monthly Adjustment Amount) if your income is above certain thresholds. However, a one-time inheritance typically doesn't count toward MAGI (Modified Adjusted Gross Income) that Medicare uses for premium calculations. If you invest the money and receive ongoing investment income, that could potentially affect your Medicare premiums two years later if it pushes your income above the threshold. But the inheritance itself is generally not counted as income for IRMAA purposes.
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Zara Ahmed
Just to add a bit more clarity: when I went through something similar, I confirmed that inheritance money doesn't count against the Social Security earnings test. In 2025, if you're under FRA, the earnings limit is around $22,320 (they adjust it annually for inflation). But again, this only applies to earned income from work, not money from inheritance, investments, or other unearned sources. You should be completely fine receiving your full inheritance without any impact on your Social Security retirement benefits.
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Chloe Martin
•Thanks for including those specific numbers. It's really helpful to understand exactly how the earnings limit works!
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