Q:

Does money contributed to a 401(k) plan count toward the Social Security maximum benefit limit?

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Quick Answer

Money contributed to a 401(k) plan is counted toward the Social Security benefits limit, according to the AARP Bulletin. Additionally, 403(b) contributions, payments made into a tax-deferred health plan, and self-employment earnings are counted, as are contributions into any insurance, fund or annuity that make payments on or after retirement.

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Full Answer

The earnings limit only applies to people between the ages of 62 and full retirement age who continue to work while receiving benefits. Types of income that do not count toward the Social Security benefit limit are retirement pay and pensions, interest and dividends from stocks and bond, unemployment benefits, damages won in court, IRA and 401(k) distributions, and rentals from real estate.

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