I want to try to retire in about 6 years at age 64. I am married and my wife will continue to work (for a number of years) as a school teacher after I retire. I will have access to a company pension from a work location where I paid social security taxes on my income. I will also have 401k assets and a small amount of money in a ROTH IRA. My question is, "if my wife's earned income is less than 32,000 annually (she will continue to fund a 403b) and I only take money from the sources listed previously (i.e. I will not work), will my social security benefits, if I take them simultaneously, be reduced? And if so taking which of the sources will reduce my social security benefits?

Although the amount of income on your tax return may cause your social security to be taxable, only earned income will reduce your benefits. Your social security will be reduced if you have earned income in excess of the limits in place at that time. Earned income is income from wages, self-employment income, and partnership income (but not in all cases). The reduction of your benefits would only relate to the earned income you make. Interest, dividends, and pensions are not earned income.

By referring to the $32,000, I think you may be referring to the limit when social security becomes taxable, but this is not the same as the reduction of benefits for earned income.

If I have you confused, let me know.

MLSNC, I don't think that you have me confused. I'm plenty confused already, but I think I'm getting the picture. Withdrawals from my 401k, pensions paid to me, and withdrawals from a ROTH IRA would not result in a reduction in my Social Security benefits if taken simultaneously. Is that correct? Also, a related question is, "would my wife's earned income in a school district that is not part of the Social Security System have the potential to reduce my social security benefit or make it taxable?

Withdrawals from the 401k, pensions paid to you and Roth withdrawals would not result in a reduction in your Social Security Benefits.

To determine if your benefits are going to be taxed you do have to include your wife's income to determine if you are over the $32,000 income limit (where you start including a portion of the benefits in you income).

Filing separate returns won't help here because if you are married filing separately, the limit is -0-. (This assumes you and the wife lived together.)

So, if my wife earned $32,000 (or whatever she earned), I would show that earned income on my tax return and also list my social security as "earned income"? I guess I'm trying to figure out how to maximize my social security benefit (no reduction in benefits and no taxes). It seems that I would not have a reduction in benefits as long as I didn't have a lot of earned income. But I might have to pay taxes depending on whether her income was above $32K?

Wife shows the $32,000 as income, that is correct. Social Security is not generally earned income. There is a line on the return to show the gross SS received and the taxable amount. You have to complete a worksheet to determine how much of your SS is subject to tax. The most that can be subject to tax is 85% and it could be substantially less. It is going to be hard not to pay taxes on part of you SS under the current rules if your wife works and especially if you draw on your retirement accounts.

Your SS benefit will not be reduced by the SS Administration as long as your earned income does not exceed the limits in effect for the applicable year. The wife's income has no effect on this.

Okay, thanks... got it now!