Yesterday's blog showed the impact of income levels on receiving Social Security Benefits starting at age 62. This begs the question of what is and is not considered income. Obviously, wages and tips are considered income. What is excluded from income?
Income items that are not counted as earnings include:
· Payments from tax exempt accounts including: annuities, 401(k), IRA’s, trust funds, and Keogh Plans
· Pension and retirement pay
· Interest, dividends, and capital gains on stocks, bonds, and capital assets
This means that distributions and withdrawals from tax exempt and taxable account will not count toward reducing Social Security benefits. If you have been disciplined in saving for retirement, you have lots of options that does not impact Social Security benefits.
Bottom Line: Another reason to start saving now.
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