Relying Heavily on This Popular Retirement Account Could Cost You Future Social Security Benefits -- What to Do Instead

1 hour ago 2

Kailey Hagen, CFP, The Motley Fool

Fri, April 24, 2026 astatine 10:20 AM CDT 4 min read

Your status savings and your aboriginal Social Security benefits tin some assistance screen your surviving costs successful retirement. But what galore don't recognize is that wherever you prevention for status tin impact however overmuch of your Social Security checks you're allowed to keep.

There's 1 fashionable relationship successful peculiar that could outgo you down the road. If you're stashing a batch of wealth here, it's not excessively precocious to alteration your strategy truthful you tin clasp connected to much of your Social Security benefits successful retirement.

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Traditional 401(k)s are among the astir fashionable status accounts for respective reasons: precocious publication limits, an up-front taxation interruption erstwhile you marque contributions, and the anticipation of an leader match. Together, they tin alteration you to marque speedy advancement toward your savings goals, particularly if you're making regular contributions. But there's a catch.

When you instrumentality wealth retired of your accepted 401(k), you'll beryllium mean income taxation connected it. This raises your provisional income, which the authorities defines arsenic your adjusted gross income (AGI), positive immoderate nontaxable involvement from municipal bonds, and fractional your yearly Social Security benefit.

The authorities uses your provisional income and your marital presumption to find however overmuch of your Social Security benefits are taxable each year. The pursuing array breaks down what percent of your benefits you could beryllium income taxation on:

Marital Status

0% of Benefits Taxable If Provisional Income Is Below:

Up to 50% of Benefits Taxable If Provisional Income Is Between:

Up to 85% of Benefits Taxable If Provisional Income Exceeds:

Single	$25,000	$25,000 and $34,000	$34,000
Married	$32,000	$32,000 and $44,000	$44,000

Source: Social Security Administration.

So, counterintuitively, the 401(k) funds you retreat to assistance supplement your Social Security checks could really outgo you immoderate of those aforesaid benefits by raising your taxation bill. But determination is simply a mode to mitigate this.

If you're disquieted astir moving into this problem, stash immoderate of your savings successful a Roth 401(k) if you person one, oregon a Roth IRA. You volition wage taxation connected these contributions successful the twelvemonth that you marque them, but past that wealth grows tax-free afterward.

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