IRA Withdrawals and Social Security

From the Consumer Mailbag: Dear Cynthia: After I retire and start collecting social security, will money I take out of my IRA’s count as income and lower my social security benefits?

Answer: According to Margaret Ringer, a reporter for Kiplinger’s Managing Money Q & A’s, only earned income effects your social security benefits and IRA withdrawals aren’t considered earned income. Under current rules, if money comes from a job instead of from an IRA, and you’re age 65 through 69, you can earn up to $15,500 this year without affecting your benefits. Beyond that you’ll loose $1 in benefits for every $3 in earned income above the cutout. After you turn 70, you can earn as much as you want without affecting social security benefits.

Source: Ringer, M. (1999, March). IRA’s and social security. Kiplingers, 76.