Does 401(k) Withdrawal Affect Social Security?

By Last Updated: September 17, 2025
Does 401(k) Withdrawal Affect Social Security?

When it’s time to begin withdrawing your Social Security benefits, the process can feel overwhelming. With so much conflicting information and a flood of mailers, calls, and emails offering advice, it’s hard to know who or what to trust. Once you’ve made your claiming decision, the next challenge is understanding how other income sources may impact your benefits.

Do 401(k) or IRA Withdrawals Affect My Social Security Benefits?

The short answer is no, 401(k) or rollover IRA withdrawals do not reduce the amount of your Social Security benefit. However, they can affect whether your Social Security benefits are taxable. Because these withdrawals are considered ordinary income, they increase your adjusted gross income (AGI). AGI is used to determine whether and how much of your Social Security is taxable.

Understanding Taxation on Social Security Benefits

If your combined income (including 401(k) or IRA withdrawals) exceeds certain thresholds, a portion of your Social Security benefits may be taxed:

Single Filers:

  • Income over $25,000: up to 50% of benefits may be taxed
  • Income over $34,000: up to 85% of benefits may be taxed

Married Filing Jointly:

  • Income over $32,000: up to 50% of benefits may be taxed
  • Income over $44,000: up to 85% of benefits may be taxed

It’s important to note that no more than 85% of your Social Security benefits can be taxed, regardless of your income.

Timing Matters: When Should You Claim Social Security?

This is why your Social Security claiming strategy matters. If you or your spouse are still working, it may be wise to delay taking Social Security, otherwise, the additional income could cause up to 85% of your benefits to be taxed.

Delaying Social Security past your Full Retirement Age (FRA) can result in an 8% annual increase in your benefit, plus inflation adjustments, until age 70. For many, waiting to claim can significantly boost lifetime benefits and reduce unnecessary tax exposure.

Work With a Fiduciary Financial Planner

If you’re navigating Social Security claiming decisions or trying to plan tax-efficient retirement withdrawals, this is a great time to bring a financial advisor into the conversation. A comprehensive financial plan can help you feel more confident and in control of your retirement years. At Wiser Wealth Management, our fiduciary, fee-only advisors are here to help you make informed, personalized decisions. Schedule a consultation to start planning your next chapter.

Michaela Dowdy
Financial Advisor, Wiser Wealth Management

learn-more-2024-new

Categories

You May Also Like

Share This Story, Choose Your Platform!

Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.

Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.

To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.

Sign up for our newsletter!

Our latest blogs, podcasts, and educational videos delivered to your inbox weekly.