Social Security is a key part of your financial security in retirement, but many people are also fortunate enough to have retirement accounts like IRAs that they can draw from. However, many people fear that taking money out of an IRA jeopardizes your Social Security benefits.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the things retirees have to watch out for when considering withdrawing money from their IRAs. On one hand, Dan notes that there's no provision that forces you to forfeit Social Security benefits based on IRA withdrawals, even if you take Social Security early. The only forfeiture provision applies to wage and salary income, not IRA income. Yet Dan also points out that under some circumstances, Social Security benefits can be subject to taxation, and withdrawals from a traditional IRA can boost the income the IRS takes into account in calculating taxes on your benefits. As a result, Dan concludes that it's smart to coordinate your retirement account withdrawals to make sure that you minimize your taxes.
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The article Social Security: Will IRA Withdrawals Threaten Your Benefits? originally appeared on Fool.com.Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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