Tax guru question

[Afrikeber]

So if at age 62 one begins collecting SSI but goes back to work and contributes the max of 30k (2023) into a 401k, does that 30k count as earnings to the SSA?

Max earnings prior to FRA of age 67 is $19,500k for anything after that is a payback to SSI at 1$ for every 2$ earned. Wondering if contributions to 401k avoids this?

 

[wpage]

So if at age 62 one begins collecting SSI but goes back to work and contributes the max of 30k (2023) into a 401k, does that 30k count as earnings to the SSA?

Max earnings prior to FRA of age 67 is $19,500k for anything after that is a payback to SSI at 1$ for every 2$ earned. Wondering if contributions to 401k avoids this?

Good question... Since the rules are ever changing go here and chat with the source...
ssi.gov

 

[hdatontodo]

Are you talking collecting Social Security Benefits at 62 or collecting Supplemental Security Income, SSI, which pays benefits to people with limited income and resources.

If you are collecting Social Security Benefits and work, they will collect FICA taxes from you:

Do I Have To Pay FICA If I Am Working And Collecting Benefits?

There is no “senior citizen exemption” to paying FICA taxes. As long as you work in a job that is covered by Social Security, payroll taxes will be collected.

www.aarp.org

 

[daggo66]

401k would be through an employer and is usually deposited pre-tax. Therefore you pay the taxes when you withdraw. If it’s an IRA (you make deposits) it can be a traditional IRA where taxes are paid upon withdrawal or a Roth IRA where taxes are paid prior to deposit.

If you are working and collecting SS, the amount you pay tax on depends on your age and the amount you make.

 

[Afrikeber]

I meant collecting social security benefits at 62 (after working 45 years).

You can return to work collecting ss benefits but cannot make more than I believe $19,500 and after that they reduce your benefit $1 for every $2 dollars you make working after that. At age 67+ you can make as much as you can no penalty.

I was wondering if I contribute the max for 2023 of $30,00.00 to a 401k does that 30K count as income that they otherwise penalize since I never touch it and it goes directly into the 401k.

 

[John from MD]

Calling Fabs, need tax info. (asking for a friend)

 

[bcr229]

So if at age 62 one begins collecting SSI but goes back to work and contributes the max of 30k (2023) into a 401k, does that 30k count as earnings to the SSA?

Max earnings prior to FRA of age 67 is $19,500k for anything after that is a payback to SSI at 1$ for every 2$ earned. Wondering if contributions to 401k avoids this?

Doesn't look like it.

Does a 401(k) and IRA Count Toward the Earnings Limit?

Social Security's earnings limit only takes into account money you earn from work. Distributions from retirement accounts do not count.

www.aarp.org

"By the same token, contributions to your IRA or 401(k) cannot be deducted from income for purposes of the earnings test. Social Security uses your gross income before tax-deferred allotments to determine your earnings."

 

[Afrikeber]

Doesn't look like it.

Does a 401(k) and IRA Count Toward the Earnings Limit?

Social Security's earnings limit only takes into account money you earn from work. Distributions from retirement accounts do not count.

www.aarp.org

"By the same token, contributions to your IRA or 401(k) cannot be deducted from income for purposes of the earnings test. Social Security uses your gross income before tax-deferred allotments to determine your earnings."

Thanks, that about sums it up.