Social Security: Does Rental Income Reduce Your Benefits?

While the majority of Americans elect to receive Social Security benefits prior to reaching full retirement at age 66, there's one thing that may dissuade you from doing so. Namely, your annual benefits will be reduced if you continue working and earn above $15,480 a year.

The good news is that this only impacts so-called "earned income," which by definition excludes earnings from passive investments such as stocks and bonds, retirement plans, and real estate.

With respect to real estate specifically, this means that unless you're a real estate broker or professional (in which case, proceeds therefrom would be considered earned income), then you have no reason to fear that rental income will weigh on your Social Security benefits.

To learn more about this, check out the video below in which Motley Fool contributor John Maxfield answers a reader's question on the issue by delving deeper into the earned-income rule and its exceptions.

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John Maxfield

John is The Motley Fool's senior banking specialist. If you're interested in banking and/or finance, you should follow him on Twitter.

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