You may be very close to reaching retirement age and have your eye keenly on the 401(k) account. But in a sudden turn of events, you may enter a catastrophic accident or otherwise get the news that you have a serious physical, mental, or emotional disability. Now with having to pivot your focus on Social Security Disability Insurance (SSDI) benefits, you may wonder whether your retirement funds are out of touch once more. Or, if you should abandon your efforts toward collecting disability benefits and solely depend on your retirement funds for coverage and support. Well, before you make any rash decisions, please read on to discover whether you can collect SSDI benefits and withdraw from your 401(k) account at the same time and how a seasoned attorney in SSDI eligibility in New Jersey, from The Law Offices of Sheryl Gandel Mazur, can help you figure out an effective plan.
Can I collect SSDI benefits and withdraw from my 401(k) account at the same time?
Generally speaking, withdrawing from your 401(k) account may not affect your SSDI benefits eligibility. This is because your eligibility is based on having worked long enough and recently enough all while contributing to Social Security taxes. So, it is not determined by the income sources you currently stream from.
How much can I receive per month?
As of 2025, an SSDI benefits recipient may receive a maximum of $4,018 per month. However, you may receive much less than this, based on your average earnings before incurring a physical, mental, or emotional disability. Of note, you must have an earned income below the substantial gainful activity (SGA) limit. As of 2024, this limit is $1,620 per month for individuals with disabilities other than blindness and $2,700 per month for individuals with blindness.
However, say that your employer did not sponsor a retirement plan and you have contributed independently toward an individual retirement account (IRA) instead. Well, in the same tune, the Social Security Administration (SSA) may not consider your receiving these funds as a source of earnings. Therefore, it may not minimize your SSDI benefits payout or eliminate your eligibility. The same may apply to pensions, annuities, or the interest or dividends from your savings and investment accounts.
Then, as for your 401(k) account, the amount you may receive may depend on whether you make a penalty or penalty-free withdrawal. For example, if you withdraw from your account before you reach the age of 59.5, you may be hit with a 10 percent penalty from the Internal Revenue Service (IRS). All the while, you may have to pay taxes on the money you take from your 401(k) account.
If you have gotten this far, we now ask you to reach out to a skilled attorney in SSDI eligibility in New Jersey to schedule an initial consultation. Overall, we strongly encourage you to retain legal representation from The Law Offices of Sheryl Gandel Mazur for all your legal needs.
