Any Social Security benefits you receive before full retirement age can decrease when your income goes up. However, the Social Security Administration (SSA) doesn’t count money in your IRA as part of your income. Instead, income includes only wages from work or self-employment. As long as you meet the other criteria for receiving disability benefits, you won’t see a change in your benefit amount -- even if you’re withdrawing from your IRA regularly.
If you’re collecting Social Security Disability Insurance (SSDI), your IRA withdrawals won’t have any impact on your SSDI payments. Your eligibility for SSDI relies on the severity of your medical condition (it must be expected to last at least a year or result in death) and whether you have worked long enough while paying Social Security taxes. However, if you are able to work while disabled and you are earning more than $1,000 a month, your benefit will be reduced or eliminated.
Supplemental Security Income (SSI), Social Security’s other program for the disabled, works a little differently than SSDI. Because your eligibility for SSI is based on both income and resources, an IRA withdrawal may count as a resource and may subsequently reduce your SSI benefit. To be eligible for SSI, you must meet Social Security’s definition of disabled, your income may be no more than $1,433 a month, and you may have no more than $2,000 worth of resources.
Reporting Your Earnings
Whenever there is a change in your financial situation, you must report this change to the SSA. This rule includes any changes in your spouse’s or other family members’ income and resources, as well. You may call 800-772-1213 to report the change, or visit your local Social Security office to do it in person. If you don’t report a change, you may have to pay back any benefits you collected after the change went into effect.
What Affects Your Benefits
The SSA doesn’t just count your wages as income. It also counts gift money, unemployment benefits, annuities, pensions, settlements, inheritances and rental pay as part of your income when determining your eligibility for disability. Also, it takes into account your resources, which includes cash, bank accounts and U.S. stocks and bonds. Even if you don’t think it will affect your benefits, you must still report all financial changes to the Social Security Administration.
- Social Security Online; Effect of IRA Withdrawals on Social Security Benefits; May 2011
- Social Security Online; Income That Counts Towards the Earnings Limit Test; May 2011
- Social Security Online; How Work Affects Your Benefits; January 2011
- Social Security Online; What You Need to Know When You Get Supplemental Security Income; April 2011
- Social Security Online; How You Qualify For Social Security Disability Benefits
- Social Security Online: Update 2011