Dealing with income limits on Social Security
If someone has gone over the income limits for drawing Social Security pre IRA, would an IRA contribution lower their AGI so they would not be penalized as much?
If someone has gone over the income limits for drawing Social Security pre IRA, would an IRA contribution lower their AGI so they would not be penalized as much?
Permalink Submitted by Alan - IRA critic on Wed, 2020-10-28 23:36
There are no income limits to draw SS benefits, but taxable IRA distributions may result in more of your SS being taxable, up to 85% of the SS income. If you make a deductible TIRA contribution it will reduce the income used to determine the taxable amount of your SS benefits.
Permalink Submitted by Patrick Min on Thu, 2020-10-29 13:35
Thanks for your response Alan. My question was really around how to reduce Other Earned Income that is resulting in a “repayment” of social security benefits received and how my client can offset some of that earned income. Would an IRA or 401k contribution lower their AGI so that they would not be penalized (i.e. have to “repay” as much). I appreciate any thoughts you may have.