Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
cap51
Level 1

Social Security and 401 retirement

Can I contribute more to my 401 retirement to make up the difference between what I make and what I am allowed to make while working and drawing Social Security?

3 Replies
KrisB-EA
Employee Tax Expert

Social Security and 401 retirement

Hi cap51!

The SSA website states that they make their calculations based on the wages you earn. They make no mention of whether the wages have been invested in a 401 or other tax-deferred account. 

 

Here's a table that shows how they calculate the reduction in benefits for those who are working and younger than the normal retirement age:

SSA benefits calculation 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
KellyCoughlin
Employee Tax & Finance Expert

Social Security and 401 retirement

I thought I would add an additional comment here. As I interpret this, your earnings would be directed to your 401k, thereby deferring your "income" tax. But you are not deferring your social security and medicare taxes. You are still paying into the SS fund with these 401k wages. So, you could potentially be increasing your SS income with these contributions. I know that wasn't your original question, but I think it is good to know this.

Good luck,

 

Kelly C, CPA

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Mohammedhossien23
Returning Member

Social Security and 401 retirement

Let’s talk 

Privacy Settings
v