Do Pensions count as income when you are on Social Security at age 62. What counts as income?

Answer 1

I do not agree with the previous answerer.
Pensions do not necessarily count as income.
The following is copied from the FAQ of the SSA.gov site.
"Q. Will my retirement pension from my job reduce the amount of my Social Security benefit?
A. If your pension is from work where you also paid Social Security taxes, it will not affect your Social Security benefit. However, pensions based on work that is not covered by Social Security (for example, the federal civil service and some state, local, or foreign government systems) probably will reduce the amount of your Social Security benefit. For more information, see the following fact sheets which you may review and download by clicking on the title: "Windfall Elimination Provision" and "Government Pension Offset".

http://www.ssa.gov/planners/faqs.htm

The following url (also from www.ssa.gov) answers the question as what counts as income. It also has a lot of other good info.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_alp.php?p_li=&p_page=1&p_cv=2.43&p_pv=&p_prods=&p_cats=9%2C43&p_hidden_prods=&cat_lvl1=9&cat_lvl2=43&p_search_text=&p_new_search=1&p_search_type=answers.search_nl

Answer 2

This Site Might Help You.

RE:
Do Pensions count as income when you are on Social Security at age 62. What counts as income?

Answer 3

Yes, pensions count as income, also IRA or 401K withdrawals and any investment income that you have - capital gains, interest, dividends. Basically, anything that counted as income before you retired that you are still getting, counts as income after you retire. Depending on your total income, your social security might be partially taxable or not.

Followup additional info: Since this question is under the "tax" topic, I assume you're asking if it's income for tax purposes. If you're asking does it reduce your social security payment amount, then the answer is not necessarily.

Answer 4

The 1st answer is true. Anything that counted as taxable income before you retired is still counted as taxable income after you retire. Examples include interest, dividends, and pensions. Pensions include traditional pensions from your employer, self-funded pensions from your employer (401k), and self-funded pensions not connected to your employer (IRA). Roth IRA withdrawals are not considered taxable income.

One caveat...some pension payments are not considered taxable income. If any of your pension was funded by you with after-tax dollars, then a portion of your pension withdrawal is not taxed. Usually the pension provider will let you know how much is taxable and how much isn't. If they don't, you have some homework. However, assuming your pension was funded by your employer's dollars and/or your pre-tax dollars, all of your pension payments are taxable income in the year they are paid to you.

Normally, Social Security is not considered taxable income. However, if you have other taxable income besides Social Security, then a portion (I believe as high as 80% ) of your Social Security will be considered as taxable income. Sucks, doesn't it?

What answerer number 2 was referring to is how some pensions reduce your social security payment. Normal pensions from non-government jobs don't, but like he said, some government pensions lower your social security.

Hope this helps :)

Answer 5

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For 2008 that limit is $13,560 and for 2007, that limit is $12,960. Then $1 in benefits will be deducted for each $2 you earn above the annual limit Nonwork sources of income, such as: * inheritance payments, * pensions, * income from investments, * IRA distributions, * interest, * 401(k) distrubutions, or * other sources; do not count as wages for the earnings test. The Social Security retirement program insures against loss of earnings from work and not against the failure to have investment income.

Answer 6

what about the 66 y/o who receives social security check and a couple of pension checks from military and former employer? The ssi check is not reduced , but is any amount of ssi check taxable?
Also, does earned income increase the taxable amount on ssi check for the 66 y/o ?
Seems like since I retired , my taxes have increased. Most tax deductions disappear, because kids are grown, no mortgage, and no job related write-offs. But now I live on a fixed income .
Does tax on ssi ever stop????

Answer 7

Taxman is right. It depends.......some pensions are not taxable but most are. When you receive your 1099-R for 2006 it should have the taxable portion of your pension. Some of your social security could be taxable but it depends upon how much you get in other retirement benefits and income. The formula is complicated.

Answer 8

Social Security Disability Guide : http://DisabilityHelp.siopu.com/?vNa

Answer 9

I'm not sure what your question is. The rules--which you did quote correctly--are clear that OID isn't included.