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CGCPA
CGCPA, CPA
Category: Social Security
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Experience:  My experience over the years has involved Social Security,
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In SSA Publication No. 05-10069, ICN 467005, January 2012 it

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In SSA Publication No. 05-10069, ICN 467005, January 2012 it states that an employee’s contribution to a pension or retirement plan if the contribution amount is included in the employee’s gross wages is not counted for figuring the income limit of $14,640. They also do not count income such as other government benefits, investment earnings, interest, pensions, annuities, and capital gains. So if what I read and what I was told by the office I could put in my max in 401 K plan and that would not count as income. And since I'm over 59.5 I can withdrawl from my plan without penality. Am I correct?
You are somewhat correct. However, the inclusion in gross earnings is to be watched carefully. Social Security uses the line marked Social Security wages. This is box 3 on the W-2 form. If you place the maximum in your 401(k) it will be included there and, if these are pretax contributions, they will not be included in box 1. If they are after tax contributions they will be included in boxes 1 and 3 and your theoretical plan will not work to your advantage. You will need to ask at your place of employment how they will be reporting this.
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