Does a 401(k) and IRA Count Toward the Earnings Limit? (2024)

No. Social Security defines “earned income” as wages from a job or net earnings from self-employment, and it only counts earned income in its calculation of whether and by how much to withhold from your benefits. It does not take into account pensions, retirement-account distributions, annuities, or the interest and dividends from your savings and investments.

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.

See Also

Schedule D: How To Report Your Capital Gains (Or Losses) To The IRS | Bankrate

AARP Membership— $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

See Also

Understanding Supplemental Security Income (SSI)-- SSI IncomeTax-Efficient Investing: 7 Ways To Minimize Taxes And Keep More Of Your Profits | BankrateWhat Is Investment Income? | BankrateWhat is the Earned Income Credit? Find Out If You Qualify

Keep in mind

Income from all sources does go into determining whether and what portion of your Social Security benefits are taxable.