Will my ESOP dividends count as earned income for Social Security survivor benefits earnings limit?

Good news - ESOP dividends are NOT considered earned income for Social Security purposes. The earnings limit only applies to wages from employment or net earnings from self-employment. Dividend income, interest, capital gains, pension payments, and other investment income don't count toward the earnings limit. So you should be able to collect your full survivor benefit at age 60 without any reduction based on those ESOP dividends.

my mom had something similar with my dads pension and dividents after he passed. SS didnt count any of that towards her income limit. only matters if your actually working and making money from a job or self employed.

I have to disagree with the first response. It actually depends on HOW the ESOP is structured and how the dividends are paid. Some ESOPs are considered deferred compensation and CAN count toward the earnings limit. You really need to talk directly to SSA about your specific situation.

Just wanted to add that while your ESOP dividends won't count toward the earnings test, you should still be aware of two important things: 1. When you take survivor benefits at 60, they'll be permanently reduced by about 28.5% compared to waiting until your full retirement age (FRA). That's why your estimate is showing $2,275 instead of the full amount. 2. If you plan to claim your own retirement benefits later, you can switch from survivors to your own benefit at any point if your own benefit would be higher. Since you're turning 60 soon, have you set up your my Social Security account online? That's the easiest way to apply when you're ready.

When i started collecting surviver benefits last year i had the SAME EXACT QUESTION!!! i even went to the SS office and the lady told me different things each time i asked!!! So frustrating!!! But turns out dividends and interest and all that investment stuff DOES NOT count for the earnigns test. Only if you actually work a job or have a buisness. Thank god because my late husbands 401k is what im living on

If you're having trouble getting through to SSA on the phone, I'd recommend using Claimyr. I was in a similar situation trying to get clarity on my survivor benefits and spent days trying to reach someone. Used this service at claimyr.com and they got me connected to a real SSA agent in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - totally worth it for peace of mind on something this important.

To clarify some confusion in this thread: 1. ESOP dividends are definitively NOT counted as earnings for the Social Security earnings test. They're treated as investment income. 2. For 2025, the earnings limit for someone under Full Retirement Age is $22,560 (a 3% increase from 2024's $21,240). 3. Only wages from employment and net earnings from self-employment count toward this limit. 4. The reduction is $1 for every $2 earned above the limit. For the original poster, when you apply for survivor benefits, make sure to specify that your only income is from ESOP dividends to avoid any confusion. These rules are clearly outlined in SSA's POMS section RS 02501.021.

Just want to mention - make sure you're calculating the survivor benefit correctly. My mom thought she'd get one amount, but it ended up being lower because of some obscure rule about my dad's benefit calculation. The estimate you see might not be accurate.

Thanks everyone for the helpful responses! I feel much better knowing that my ESOP dividends won't count toward the earnings limit. I'm going to try to reach SSA before I turn 60 next month to confirm everything and get my application started. Might try that Claimyr service if I can't get through on my own - spending days on hold is just impossible right now. Will update how it goes after I apply!

Good luck with your application! Just wanted to add that you might also want to ask SSA about the "restart" option when you call or apply. Since you're claiming survivor benefits at 60, you'll get a reduced amount, but if your financial situation improves later and you want to delay benefits to get a higher monthly payment, there's a one-time option to withdraw your application within 12 months (you'd have to pay back what you received, but then you could restart at a later age for a higher benefit). It's something to keep in mind since you mentioned needing the income now but your own retirement benefit being small. Not saying you should use it, just good to know all your options!