I'm about 2 years away from opting to receive SSI at 62 1/2. I just recieved the annual benefit report and the enclosed letter "Thinking of Retiring? Consider your options" in which it states my benefits will be reduced 1.00 for each 2.00 I "earn" (above 13,560 in 2008). My question is what does "earnings" mean? Does this include interest and dividends reported on 1099-INT and 1099-DIV, wages reported on a W-2, IRA withdrawals, or all or part of the above. I'm wondering if I should not plan on withdrawing from my IRA until I reach full retirement age when the annual limit would be 36,120.
For SSI purposes what are "earnings"
Sep 23, 2008
3 Replies
SSI is the abbreviation for Supplemental Security Income. SSI is public assistance payments to disabled persons who don't have the requisite quarters to qualify for social security payments on account of old age or disability.
You're asking about normal "old age" social security. Among the types of income you list above, only wages count as earned income for offset purposes. For more information, see "What is earned income?" in the SSA Handbook.
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The earned income offset currently is $36,120 up until the date during the year a social security beneficiary attains full retirement age (FRA). Starting with the month you reach FRA, you can get your benefits with no limit on your earnings. See "You can work and get Social Security at the same time."
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Condor
"Steve M" wrote
That means you physically do something for pay. Generally it's wages or self-employment income.
Receiving rents, interest, dividends, etc do not apply.
Nope.
Plan to draw your IRA based on may other factors. It doesn't, currently, impact SSA benefits.
Your SS income will be considerably higher if you can delay until full retirement age.
You might also want to delay IRA withdrawals since they are taxed as ordinary income.
At full retirement age you can make as much as you want (not $36,120) without having to pay a penalty.
-- Ron
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