Will pension and 401k/IRA withdrawals reduce my Social Security if I claim at 65 before FRA?

You're absolutely correct! The earnings test only applies to earned income (wages or self-employment income), not unearned income like pensions, 401(k) withdrawals, IRA distributions, investment income, interest, or dividends. So during those two years from 65 to your FRA at 67, you can: - Take your full pension with no impact on SS benefits - Withdraw from your 401k/IRA as needed with no reduction - Collect interest, dividends, capital gains, etc. with no problem The only thing you need to watch is actual employment income. For 2025, the limit will likely be around $22,000 per year before they start deducting $1 for every $2 you earn above that threshold. Just be aware that while pension and 401k/IRA withdrawals don't affect the earnings test, they might affect the taxation of your Social Security benefits. Up to 85% of your benefits can become taxable depending on your combined income.

yep thts right pension + 401k dont count as earned income. im taking my pension + SS right now (started at 64) and theres no reduction. but watch out for taxes they get ya there lol

While the previous responses are correct about pensions and 401k/IRA withdrawals not counting toward the earnings test, I want to add an important clarification: be careful if you have a government pension from work where you didn't pay Social Security taxes! If that's the case, you might be subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO), which can reduce your Social Security benefits regardless of when you claim them. This is separate from the earnings test and applies even after FRA. From your post, it sounds like you have a regular private-sector pension, but I just wanted to mention this in case it applies to your situation.

My sister told me ALL retirement income counts against SS benefits and I believed her for YEARS!!! I could have retired 2 years ago if I had known this!!! SO FRUSTRATING!!!! Why doesn't Social Security make this clearer??? Their website is so confusing!!

I'm a financial planner who works specifically with pre-retirees, and I can confirm what others have said: only earned income (W-2 wages or self-employment income) counts toward the earnings test before FRA. However, I'd recommend you consider whether claiming at 65 is actually your best strategy. By claiming at 65 instead of waiting until 67, you're permanently reducing your monthly benefit by about 13.3%. If you live into your mid-80s or beyond, waiting until your FRA of 67 could provide more lifetime benefits. If you have $475,000 in retirement accounts, you might consider drawing more heavily from those for two years and delaying Social Security until 67 to get your full benefit amount. This is especially beneficial if you're in good health and have family longevity.

I think I have a simillar situation. I claimed SS at 64 (im 66 now) and my FRA is 66 and 8 months. I have a work pension and a 403b account, neither affects my SS payment. But my question is - when I reach my FRA next year, can I go back to work full time with NO limits on my earnings while still collecting SS? Will my benefit amount increase if I keep working?

I just remembered something else! Make sure u check if your state taxes Social Security! Some states do and some don't. That made a BIG difference in my retirement budget!!

Great question and I'm glad you're planning ahead! As others have confirmed, your pension and 401k/IRA withdrawals won't count toward the earnings test during those two years before your FRA. One additional thing to consider: if you do decide to claim at 65, make sure you understand how the monthly earnings test works. The annual limit everyone mentions gets divided by 12, so if you have any part-time work, you need to stay under about $1,833 per month (based on the ~$22,000 annual limit). They look at it month-by-month in your first year of claiming, not just the annual total. Also, don't forget that once you hit your FRA at 67, any benefits that were withheld due to the earnings test will be gradually added back to increase your monthly payment for life. So even if you did go over the limit occasionally, it's not permanently lost money. With your pension and retirement savings, you seem well-positioned for retirement at 65 if that's what you decide!

As someone who just went through this exact decision process last year, I wanted to share my experience. I was in a very similar situation - eligible for pension at 65, substantial 401k balance, and FRA of 67. After reading through all the great advice here, I ultimately decided to wait until my FRA to claim Social Security. Instead, I'm living off my pension ($1,800/month) plus strategic withdrawals from my 401k. Yes, it means dipping into my retirement accounts earlier, but the permanent 13.3% reduction in SS benefits for claiming at 65 just didn't make financial sense given my family's longevity. One thing that helped me make the decision: I calculated my "break-even" point. For me, if I live past age 78, waiting until FRA will have provided more total lifetime benefits despite getting payments for 2 fewer years. Given that both my parents lived well into their 80s, the math favored waiting. The peace of mind knowing I'll get my full Social Security benefit for life was worth the temporary inconvenience of managing retirement account withdrawals for those two years. Just another perspective to consider as you make this important decision!