Will selling my home affect my Social Security benefits with the earnings limit?
I'm on early retirement benefits (62) and I'm planning to sell my current house to buy a smaller place closer to my daughter. I've heard about the earnings limit where they take $1 for every $2 you earn above the limit, but I'm confused about whether proceeds from selling my home would count toward this limit. I'd make about $85,000 profit from the sale after paying off my mortgage, but I'd be using that money to buy the new place. Does anyone know if Social Security considers home sale profits as "earnings" that would reduce my monthly benefits? I'm trying to avoid any surprises from SSA!
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Beth Ford
Good news - the sale of your home is NOT considered earnings for the Social Security earnings test! The earnings test only applies to wages from work or net earnings from self-employment. Capital gains from selling a personal residence are not counted as earnings for this purpose. You can sell your home and purchase a new one without worrying about your SS benefits being reduced.
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Atticus Domingo
AuthorThank you so much! That's such a relief. I was worried I might lose several months of benefits because of the sale amount.
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Morita Montoya
my cousin sold her house last yr when she was 63 and it didnt affect her ss checks at all. your fine
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Atticus Domingo
AuthorThat's good to hear from someone with experience. Thanks!
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Kingston Bellamy
Are you SURE about this??? I sold my rental property last year and my accountant said ANY income can affect your benefits if you're under FRA! I'm so confused because SSA took money from my checks for three months after I reported the sale on my taxes. Now I'm worried about selling my main house too!
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Beth Ford
Rental property is different from your primary residence. Income from rental properties (rent payments) is considered earnings, and capital gains from investment properties may have different tax implications. But selling your personal home that you live in is not counted as earnings for the Social Security earnings test.
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Joy Olmedo
Just to clarify what others have said, the earnings test specifically looks at wages and self-employment income. The proceeds from selling your primary residence are considered capital gains, not earnings. Additionally, you may qualify for the capital gains exclusion on your taxes (up to $250,000 for single filers or $500,000 for married filing jointly) if you've lived in the home as your primary residence for at least 2 of the last 5 years. This is separate from the SS earnings test, but good to know. The only way the home sale could affect your benefits is if you invested the proceeds and earned interest/dividend income, but even then, that type of passive income doesn't count toward the earnings test - just your actual wages or self-employment income.
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Atticus Domingo
AuthorThis is really helpful information! Yes, I've lived in my home for 15 years so I should qualify for the capital gains exclusion too. And I'll be using all the proceeds for the new home purchase, so no investment income to worry about either.
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Isaiah Cross
I went through something similar but with stocks not a house. The SSA agent I talked to said only WORK income counts for the earnings test. But it took me FOREVER to get someone on the phone who could answer my question!!
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Kiara Greene
If you need to speak with SSA again, I'd recommend trying Claimyr (claimyr.com). I was in the same boat trying to get clarification about my benefits calculation after working part-time. Used their service and got through to an agent in about 20 minutes instead of waiting on hold for hours. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - basically they wait on hold for you then call you when an agent is on the line. Saved me a lot of frustration.
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Evelyn Kelly
My sister works for SSA and I asked her about this for you. She confirmed what others said - selling your personal residence does NOT count toward the earnings test. Only wages from a job or self-employment income count. You're good to go with selling your house!
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Atticus Domingo
AuthorThat's fantastic to have confirmation from someone who works there. Thank you for checking with your sister! This whole thread has been so helpful.
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Morita Montoya
when i got my benefits they gave me a pamphlet that explained all this stuff but i lost it lol
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Joy Olmedo
One additional thing to be aware of: if you're receiving SSI (Supplemental Security Income) rather than regular Social Security retirement benefits, different rules apply. For SSI, selling your home could potentially affect your benefits because SSI has asset limits. But since you mentioned early retirement benefits at 62, I'm assuming you're on regular Social Security retirement, not SSI, so the earnings test is what applies to you - and home sale proceeds don't count toward that.
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Atticus Domingo
AuthorYes, I'm on regular Social Security retirement, not SSI. Thanks for pointing out that important distinction!
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Savannah Glover
Just wanted to add one more reassuring point - I work in real estate and see this question come up a lot with clients who are on Social Security. The distinction everyone's making here is absolutely correct: the SSA earnings test is very specific about what counts as "earnings." It's really just wages from employment and net earnings from self-employment (like if you run a business). Capital gains from selling your primary residence, investment income, pensions, annuities, and other types of income don't count toward the earnings limit. So you can proceed with your home sale and move closer to your daughter without any worries about your Social Security benefits being affected! The fact that you're using the proceeds to buy another home makes it even clearer that this is just a housing transition, not an income-generating activity. Best of luck with your move!
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