Will trust fund income of $39,000 affect my Social Security benefits at full retirement age?

Good news for you - at full retirement age, the earnings test no longer applies. So even if trust income did count as earnings (which it typically doesn't), it wouldn't matter once you've reached your FRA. The Social Security earnings limit only affects people who collect benefits before their full retirement age. As for the trust specifically - distributions from a trust are generally NOT considered earnings for Social Security purposes. The SSA primarily looks at wages from employment and net earnings from self-employment when applying the earnings test. Investment income, including trust distributions, typically doesn't count. Your brother might have been confused or had a different situation. Was he perhaps under his FRA when receiving his trust income?

my cousins trust caused all kind of problems with his ss. they made him pay back like 12,000. but i think he was only 64 when he got it

There's an important distinction here. The earnings test (which limits how much you can earn while receiving benefits before FRA) only counts wages and self-employment income. Trust distributions are generally considered unearned income and don't count toward the earnings test. However, trust income DOES count toward your combined income for determining whether your Social Security benefits are taxable. Combined income is: - Your adjusted gross income - Plus nontaxable interest - Plus 1/2 of your Social Security benefits If that total exceeds $25,000 (single) or $32,000 (married filing jointly), a portion of your benefits becomes taxable. With $39,000 from the trust plus your SS benefits, you'll likely have some portion of your benefits subject to taxation.

I went through EXACT same thing last year! Trust income doesn't count for earnings test (thats only for earned income like a job) BUT it does count for the taxation threshold. So your benefits won't be reduced but you'll probably pay taxes on 85% of your SS benefits because your combined income will be over the limits. I tried calling SSA like 20 times to confirm this and kept getting disconnected or waiting for hours!!! So frustrating!!! Finally used a service called Claimyr (claimyr.com) that got me through to an agent in like 20 minutes. They have a video showing how it works here: https://youtu.be/Z-BRbJw3puU. The agent confirmed trust distributions don't affect the earnings test but will affect taxation.

EVERYONE HERE IS MIXING UP DIFFERENT THINGS!!!! The trust could ABSOLUTELY affect your benefits depending on what KIND of trust it is and HOW it pays you!!! My sister lost $400/month because her trust was set up wrong. You need to talk to an elder law attorney ASAP before you file for benefits. This is NOT a simple yes/no question!!!!!

It matters what TYPE of trust too!! If its a grantor trust vs non-grantor trust the tax implications are different. And if your getting principal vs just interest payments that matters too. And sometimes trusts can generate self-employment income which DOES count for earnings test! The details really matter here...

I think your financial advisor is right and your brother is wrong. I receive about $25k annually from a family trust and it has zero impact on my SS retirement benefits. I've been receiving both for 3 years now with no issues. The only impact is that more of my SS is taxable because my overall income is higher, but the benefit amount itself isn't reduced.

Just want to add that if you were on SSI (Supplemental Security Income) instead of retirement benefits, the trust would ABSOLUTELY count and probably make you ineligible! But that's completely different from retirement benefits. Some people get them confused. SSI has strict income and asset limits, retirement benefits don't once you reach FRA.

Based on everything discussed here, you're in a great position! At full retirement age (67), the earnings test completely disappears, so your $39,000 trust income won't reduce your Social Security benefits at all. This is true regardless of whether the income is considered "earned" or "unearned" - once you hit FRA, there are no income limits for retirement benefits. The only impact will be on taxation. Your trust income will be added to your "combined income" calculation, which will likely mean 85% of your Social Security benefits become taxable. But that's very different from having your benefits reduced - you'll still receive your full benefit amount, just pay taxes on most of it. Your financial advisor was correct, and your brother's situation was probably different (either he was under FRA or maybe receiving SSI instead of retirement benefits). You can file with confidence knowing your benefits won't be reduced!

As a newcomer here, I want to thank everyone for this incredibly informative discussion! I'm in a similar situation - approaching my FRA and inheriting a trust that will provide regular distributions. Reading through all these responses has really helped clarify the key points: 1. At FRA, the earnings test disappears completely - no benefit reductions regardless of income 2. Trust distributions are typically unearned income anyway, so wouldn't count toward earnings limits even before FRA 3. The main impact is taxation - trust income counts toward "combined income" for determining how much of SS benefits are taxable 4. It's important not to confuse retirement benefits with SSI, which has completely different rules This community is so helpful for sorting through all the complex SS rules! One follow-up question - for those who mentioned talking to SSA directly, is there a specific department or type of representative who's best equipped to handle questions about trust income and benefit interactions?

As someone who just went through this exact situation last year, I can confirm what others have said - your trust income will NOT affect your Social Security benefits once you reach FRA! I was 67 when I started receiving distributions from my late father's trust (about $45,000 annually), and my SS benefits remained exactly the same. The key thing to understand is that at full retirement age, Social Security completely stops caring about your income level. Whether it's $10,000 or $100,000 from any source - wages, self-employment, investments, trusts, whatever - it won't reduce your monthly benefit by even a penny. However, be prepared for the tax impact. My CPA warned me that with the trust income, about 85% of my Social Security benefits would become taxable, and that's exactly what happened. It's not fun come tax time, but it's much better than having your benefits reduced! I'd suggest getting everything in writing from the trust administrator about the nature of the distributions (principal vs. income, etc.) to give to your tax preparer. This will help ensure everything is reported correctly. Congratulations on reaching FRA - it really does simplify things!