I'm going to start my SSI when I turn 65 (April 1 2019), and intend to work for an additional 3 months for a total of $8,000 (well below the $17,040 yearly limit), after that I'll have little to no income other than camp hosting somewhere (little to no pay for that, just free campsite & utilities), I will make sure income stays below $17,040 for the months April - Dec. and not utilize the special one time rule, thus not limiting me to the monthly income test. I also have thousands of dollars in credit card debt that I cannot carry once retired, but hopefully enough in 401k to pay it all off. Since my 401k will only have $15,000 or so anyway, I intend on pulling it all at once (I know, minus taxes) as well as selling off my boat and belongings that I'll no longer need or want to pay storage on. My biggest question, is should I pull that money out of 401k before I claim SSI or afterwards. I fear pulling it out afterwards and continue to input funds etc would send me over the $17,040 limit and create loss of SSI income because of that. I'm thinking I should end contributions, and pull all of it before the end of March 2019. Is my strategy sound or am I making a huge mistake somewhere? I'm hoping to sell my house, but if I can't sell it by end of June 2019, I'll probably rent it out, thus creating $300 per month additional income?!?! I don't expect to make any profit on it, will be difficult just to get payoff on it. Not even sure what happens with that strategy...

Hi,

I'm sorry, but I'm not a financial advisor so I can't give you overall financial advice. My only expertise is Social Security. You might want to try using our Maxifi program for financial advice.

I can answer your Social Security questions, though, and it sounds like you have a couple of misconceptions about the earnings test. For one thing, the only types of income that count for purposes of the earnings test are gross wages and net self employment earnings. Therefore, income such as distributions from a 401K or rental income or income from the sale of a home would be irrelevant in determining whether or not you're able to draw Social Security benefits.

Your other misconception is that you apparently think that if you start drawing benefits in April next year your earnings in the first 3 months of the year won't count toward the earnings test. In fact, they would. The annual earnings test exempt amount ($17040 in 2018) counts your earnings for the entire calendar year, regardless of which month you start receiving benefits (https://www.ssa.gov/planners/retire/whileworking.html). There's also a monthly earnings test that could be used as an alternative to the annual earnings test that would permit you to draw benefits just for the months that your earnings do not exceed the monthly limit ($1420 in 2018).

Bottom line, if you want to start drawing benefits effective with April 2019 and you will be under your full retirement age during all of that year you will either need to a) keep your calendar year earnings below the 2019 annual earnings test exempt amount or b) you will need to earn no more than the monthly earnings limit in any month for which you draw benefits. Otherwise, you will lose at least some of your benefits.

Our Social Security maximization software, which is included in the Maxifi program, is programmed to handle all earnings test considerations and it would also allow your to compare your filing options in order to determine your best strategy for claiming benefits.

Best, Jerry