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How Will My Settlement Affect Social Security Benefits?
I am 64 and May receive a lawsuit settlement of $39,000 this year. I have been receiving SS since March of this year.
Due to income restrictions, how will my SS benefit be impacted if this award is received?
Hi,
Unless the settlement involves an award of wages or self-employment earnings, or if it is a worker's compensation settlement and you are receiving disability benefits, it will have no direct affect on your Social Security benefits. The only types of income that count toward Social Security's earnings test (see: https://www.ssa.gov/planners/retire/whileworking2.html) are gross wages and net self-employment earnings.
The settlement may, however, have tax implications. Depending on a person's total income, a certain percentage of their Social Security benefits may be taxable. For more information, refer to this link: https://www.ssa.gov/planners/taxes.html.
Best, Jerry
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Posted:
July 24, 2016