From 24/7 Wall St. · Gerelyn Terzo · · 50s
Social Security Windfall Risks
Williams-Sonoma's $10m 401(k) bonus could cut Social Security checks for early retirees.
In brief
Williams-Sonoma's $10m 401(k) bonus could cut Social Security checks for early retirees. Employees collecting Social Security before full retirement age face reduced checks if employers give cash bonuses instead of 401(k) contributions. Originally reported by 24/7 Wall St..
Williams-Sonoma Windfall
Williams-Sonoma split $200 million tariff refunds with workers.
Employee Reward Plan
The company puts $10 million toward one-time 401(k) contributions for some employees.
Social Security Rules
Social Security treats cash bonuses and 401(k) contributions differently for early retirees.
Linda's Situation
Linda collects $2,000 monthly Social Security while earning $22,000 annually.
Cash Bonus Impact
A $5,000 cash bonus raises Linda's earnings to $27,000, risking $1,260 in Social Security withholdings.
401(k) Contribution Safety
401(k) contributions keep Social Security checks on time for early retirees.
What it means
Employees collecting Social Security before full retirement age face reduced checks if employers give cash bonuses instead of 401(k) contributions.
