Q. Will the FERs supplement be reduced for earned income over $15,000 if the income is deposited in a deductible IRA or an employer 401(k)?
A. Earnings, for purposes of calculating the earnings reduction, consist of the sum of wages for services performed in the year, plus all net earnings from self-employment for the year, minus any net loss from self-employment for the year. (See 42 U.S.C. 403.) You may not “shelter” these earnings from the test by contributing them to an IRA or 401(k).