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Retiring in 2013 How paying off mortgage affects benefits

My 62 birthday is on Jan 2, 2013 and I'm planning of taking early SS and retiring from my job. My last major debt is my mortgage of $117,000 that I want to pay off in 2013 from my 401k. If the money from the 401k is taken out in Jan does this affect my SS benefits? If money from 401k is taken out in 2012 my tax bracket would be much higher. What options are there for me?

Thanks...


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Social Security documents specifically state that withdrawals from your IRA do not count towards the Social Security earnings limit. I could not find reference to 401k withdrawals specifically, but you could roll your 401k funds to an IRA to be extra safe.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/277

Of course withdrawing all $117,000 in 2013 would put you in a moderately high tax bracket. Note that couples with "combined income" above $44,000 will have 85 percent of their Social Security benefits subject to income taxes.

http://www.ssa.gov/planners/taxes.htm


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Not affiliated with the US Social Security Administration