Can you collect Social Security and 401k at the same time?

Yes, you can absolutely collect Social Security and withdraw from your 401(k) at the same time, as they are separate retirement income streams, but your combined income affects your tax bracket, potentially making some of your Social Security benefits taxable and increasing Medicare premiums. Your 401(k) withdrawals (or earnings) don't directly reduce your Social Security benefit amount, but it's wise to coordinate withdrawals strategically to minimize overall taxes, potentially by drawing down 401(k)s before Required Minimum Distributions (RMDs) start at later ages.

How much can I take out of my 401k before it affects my Social Security?

The short answer is no, taking a distribution from your 401(k) does not impact your eligibility for (or the amount of) your Social Security benefits.

What is one of the biggest mistakes people make regarding Social Security?

Claiming Benefits Too Early

One of the biggest mistakes people make is claiming Social Security benefits as soon as they're eligible, which is at age 62. While getting money sooner can be tempting, claiming early has a significant downside: your monthly benefit will be reduced.

Can I contribute to a 401k if I am collecting Social Security?

Yes, you can absolutely contribute to your 401(k) while collecting Social Security if you're still working, and it's generally a smart move for extra savings and tax benefits, as 401(k) contributions don't directly lower your Social Security benefit amount but can affect the taxability of those benefits later. This strategy allows for continued tax-deferred growth and helps supplement your base Social Security income, with the added benefit of potentially higher Social Security payments if you delay claiming them. 

Can I retire at 62 with $400,000 in 401k?

You can retire at 62 with $400k if you can live off $30,200 annually, not including Social Security Benefits, which you are eligible for now or later.

Should You Draw Your 401(k) to Delay Social Security?

What is the average 401k balance for a 65 year old?

For a 65-year-old, the average 401(k) balance is around $299,000, but the more representative median balance is significantly lower, at about $95,000, indicating many high savers pull the average up, with balances varying greatly by individual savings habits, income, and other retirement accounts. 

How long will $750,000 last in retirement at 62?

With careful planning, $750,000 can last 25 to 30 years or more in retirement. Your actual results will depend on how much you spend, how your investments perform, and whether you have other income.

How much do you have to make to get $3,000 a month in Social Security?

To get around $3,000/month in Social Security, you generally need a high earning history, around $100,000-$108,000+ annually over your top 35 years, but waiting to claim until age 70 maximizes this amount, potentially reaching it with lower yearly earnings, say under $70k if you wait long enough, as benefits are based on your highest indexed earnings over 35 years. The exact amount depends heavily on your specific earnings history and the age you start collecting benefits. 

What are the biggest mistakes people make in retirement?

The top ten financial mistakes most people make after retirement are:

• 1) Not Changing Lifestyle After Retirement. ...
• 2) Failing to Move to More Conservative Investments. ...
• 3) Applying for Social Security Too Early. ...
• 4) Spending Too Much Money Too Soon. ...
• 5) Failure To Be Aware Of Frauds and Scams. ...
• 6) Cashing Out Pension Too Soon.

How do I avoid paying taxes on my 401k when I retire?

Can you avoid taxes on 401(k) withdrawals?

1. Contribute to a Roth 401(k). If your employer offers a Roth 401(k) option, you can contribute after-tax money to it. ...
2. Convert to a Roth IRA. ...
3. Delay withdrawals. ...
4. Use tax credits and deductions. ...
5. Manage withdrawals strategically.

What does Dave Ramsey say about Social Security?

Dave Ramsey views Social Security as a supplement, not a primary retirement income, emphasizing that relying on it is a "dumb" idea; he advocates for claiming benefits as early as 62 if you're debt-free to invest the money for potentially higher returns, while also warning about potential future cuts due to trust fund depletion and urging strong reliance on 401(k)s and IRAs. 

What is the number one regret of retirees?

Here are the four most common regrets I've encountered over the years.

1. Waiting too long to retire. This regret comes up over and over. ...
2. Not spending more earlier in life. ...
3. Not tracking their progress earlier. ...
4. Lack of tax diversification.

What is the $1000 a month rule for retirement?

The $1,000 a month retirement rule is a simple guideline stating you need about $240,000 saved for every $1,000 of monthly income you want from your investments in retirement, based on a 5% annual withdrawal rate ($240k x 0.05 / 12 = $1k/month). It's a motivational tool to estimate savings goals (e.g., $3,000/month needs $720k), but it's one-dimensional, doesn't account for inflation, taxes, or other income like Social Security, and assumes steady 5% returns, making a personalized plan essential. 

What income does not count against Social Security?

Social Security generally doesn't count passive income or certain benefits, including pensions, annuities, interest, dividends, capital gains, gifts, inheritances, most government benefits (like Veterans' benefits), and rental income, when determining if you've exceeded earnings limits or to reduce your benefits (though some exceptions apply for SSI). What is counted are your actual wages or net self-employment earnings, including bonuses, commissions, and tips above a certain amount. 

How much do I have to withdraw from my 401k at age 73?

At age 73, you must withdraw a Required Minimum Distribution (RMD) from your 401(k) by dividing your previous year's December 31st account balance by a factor from the IRS Uniform Lifetime Table (e.g., 26.5 for age 73), with the result being your minimum yearly withdrawal, which is taxed as ordinary income. The exact amount varies by your specific account balance, but the calculation is simple: (Prior Year-End Balance) / (IRS Distribution Period Factor). 

Is it better to take Social Security or use a 401k?

In general, the more money coming from your traditional pre-tax IRA, 401(k), or 403(b) to fund spending in retirement, the more tax you'll likely pay. Conversely, in general, the greater the overall percentage of your retirement income coming from your Social Security income, the less tax you'll likely pay over time.

What age is best to retire?

To maximize savings and investments, you might have to work until you're 67 or longer. Or maybe you should quit when you're 62 and still healthy and active. If getting Medicare means everything to you, 65 is a good age to consider.

What does Suze Orman say about retirement?

Orman recommended making the most of retirement accounts like 401(k)s and IRAs. She suggested contributing enough to get any employer match, as this is essentially free money. For those closer to retirement, taking advantage of catch-up contributions allowed for individuals over 50 can be a smart move.

What is the biggest financial regret of retirees over 80?

Some say they regret not spending enough on themselves. Some wish they had planned for a business closure, how to spend newfound free time or how to handle a late-in-life divorce. They all agree there is no way to anticipate what life throws your way.

What is a good monthly income for retirees?

A good monthly retirement income is often considered 70-80% of your pre-retirement income, but it truly depends on your lifestyle, location, and expenses, with benchmarks ranging from $4,000-$8,000+ monthly for a comfortable life, factoring in needs like housing, healthcare, and travel. Financial planners suggest calculating your specific "income gap" by subtracting guaranteed income (like Social Security) from your estimated needs to see what you need from savings. 

What are the changes coming to Social Security in 2026?

After several years of above-average cost-of-living adjustments for Social Security, beneficiaries will receive a slight increase in the cost-of-living allowance (COLA) in 2026 based on the current inflation environment. Recipients will get a 2.8% raise, which is higher than the 2.5% increase last year.

How many Americans have $1,000,000 in retirement savings?

Only a small fraction of Americans, roughly 2.5% to 4.7%, have $1 million or more in retirement savings, with the percentage rising slightly to around 3.2% among actual retirees, according to recent Federal Reserve data analyses. A higher percentage, about 9.2%, of those nearing retirement (ages 55-64) have reached this milestone, though the majority of households have significantly less saved. 

What does Suze Orman say about taking Social Security at 62?

Orman explained that you can start Social Security as soon as 62, but that you shouldn't. She said: "Don't settle for a reduced Social Security benefit. If you are in good health, the best financial move you can make is to not claim Social Security before you reach your full retirement age."