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Can rental income reduce Social Security benefits?


No. Social Security only counts income from employment towards the retirement earnings test. Other kinds of income — including income from rental properties, lawsuit payments, inheritances, pensions, investment dividends, IRA distributions and interest — will not cause benefits to be reduced.

In 2025, Social Security withholds $1 in benefits for every $2 earned above the annual limit of $23,400 for people who claimed benefits before reaching full retirement age, which is 66 and 8 months for people born in 1958, 66 and 10 months for those born in 1959, and settles at 67 for people born in 1960 and later. Earnings made as an employee, net earnings from self-employment, and work-related bonuses and awards count toward the limit. 

Keep in mind

  • different formula applies for the year in which a beneficiary will reach full retirement age — the earnings limit is $62,160 in 2025, and $1 in benefits is withheld for every $3 in income exceeding the cap. 
  • The earnings test goes away once a beneficiary reaches full retirement age. From then on, income level has no effect on Social Security benefits.

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