Will The Deferred Income Distribution My Husband Receives In 2019 Count For Social Security Purposes?

Category: 
Dec 7 2018 - 7:42am

My husband fully retired in April 2018. He will turn 66 in April 2019. He will be receiving a bulk sum distribution of his 457b account in Feb 2019. The monies in the account were deferred income from his years working for a nonprofit hospital. Will that distribution be considered 2019 income for Social Security purposes? (does the fact that is reported on a W2 form have any bearing on the matter?).
I have run various scenarios on your software and several situations recommend that he start SS benefits before his 66 birthday is order to increase that time that I can take spousal benefits.

Thank you.

Hi,

It sounds like the distribution you're referring to would be excludable from counting toward the 2019 Social Security earnings test, but if the payment is reported on a W-2 form and it amounts to more than $46,920 your husband would need to submit details about the payment to Social Security in order to have them exclude it from counting. Social Security would otherwise assume that any Social Security covered wage amounts reported on a 2019 W-2 form were earned in 2019. The preferred form used by Social Security to document such payments is an SSA-131 (https://www.ssa.gov/forms/ssa-131.pdf).

Best, Jerry