Question for the Money Doctors
Question submitted on Apr 6, 2012.
QuestionRe:Tax Deferred Income reduced Social Security payments.
I have applied for my benefit to start at age 62 and I want to be sure my tax deferred income invested into my pension account is not added as part of income earned for the year that will affect my Social Security payments.
Yes, there is a limit on what you can earn between age 62 and full retirement age. If you have earned income during this period,
you will be subject to an earnings test that may cause your Social Security benefit to be reduced. If this happens,
when you reach Full Retirement Age your Social Security benefit will be recalculated upward to account for those months in which benefits are withheld. For this purpose, earned income includes any wages from your employer and net earnings from self-employment. Other earnings such as pensions, annuities or investment income do not affect your Social Security benefits.
I hope that this gives you some guidance.
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