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How will withdrawals impact social security?
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New York -  Withdrawals from 401(k) plans are not considered earned income and do not impact the level of social security payments that you receive.

At age 60 you may withdraw any amount without fear of the 10 percent penalty. You will pay ordinary income tax on the taxable portion of the withdrawal, however. The amount of your Social Security benefits are not related to the amount you withdraw from these accounts in any way. Increasing your withdrawals will not affect your Social Security benefits nor will the amount you receive from Social Security affect the amount you may withdraw from your retirement account.

Although we usually consider the earliest age to receive reduced benefits to be age 62, you could receive benefits at age 60 if you are a widow (er) or as early as age 50 if you are a disabled widow (er).

In addition, if you have other income, there is one connection between your benefits and your retirement plan that you should keep in mind. Increasing your income by withdrawing larger amounts from your retirement account may push you over the "base amount" for determining the taxability of Social Security benefits. For a single person or head of household, the base amount is $25,000 and $32,000 for a married couple filing jointly. If total income plus one-half the Social Security benefits exceed this amount, as much as 50 percent of the benefits could be subject to taxation. If a single individual or head of household goes beyond a base amount of $34,000 or $44,000 for a married couple, up to 85 percent of the benefits could be taxable.

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Withdrawals from 401(k) plans are not considered earned income.

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