Will TSP withdrawals count as income against my SSDI limits in 2025?

Good news - TSP withdrawals won't count against your SSDI earnings limit. The SGA limit only applies to earned income from work activity. Retirement account withdrawals are considered unearned income (like interest or dividends) and don't affect your SSDI eligibility. However, if you were receiving SSI (Supplemental Security Income) instead of SSDI, then it WOULD count as income and resources for that program. But for SSDI, you're fine on this front. Just remember you'll owe income tax on the withdrawal, and possibly an early withdrawal penalty if you're under 59½ (unless you qualify for an exception).

my uncle did TSP withdrawls last yr when he was on SSDI and SSA didnt care at all. they only look at actual work $ from what he said. but watch out for the tax hit, he was surprised how much they took out!!

I went through exactly this situation in 2023. You're absolutely correct that TSP withdrawals don't count against SSDI limits. The Social Security Administration only counts earned income from work when calculating SGA limits for SSDI recipients. However, there are a few important things to consider: 1. You will pay ordinary income tax on traditional TSP withdrawals 2. If you're under 59½, there's a 10% early withdrawal penalty (with some exceptions) 3. If you withdraw too much at once, it could push you into a higher tax bracket Have you considered taking a TSP loan instead of a withdrawal? That would avoid the taxes and penalties, though you'd need to repay it.

Just adding my personal experience - I've been on SSDI for 5+ years and have taken withdrawals from my 401k twice during that time. The SSA never counted it as income for SSDI purposes. The SGA limit ONLY applies to earned income from work activity. However, trying to reach someone at SSA to confirm this was IMPOSSIBLE. Was on hold for 3+ hours multiple times and kept getting disconnected. I finally used a service called Claimyr (claimyr.com) that held my place in line and got me connected to an agent in about 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed that retirement account withdrawals don't count against SSDI, so I had peace of mind before making my withdrawal.

I'm in the EXACT SAME SITUATION!!! On SSDI and need to tap my retirement $$$. But my question is - what about if I'm close to Medicare age? Will taking money out of TSP affect my Medicare premiums later??? I heard something about IRMAA and higher premiums if your income is higher. Anyone know about this????

In my experience with the SSA (former claims specialist for 15 years), TSP withdrawals are definitely NOT counted as earned income for SSDI. They have no impact on the SGA limit. However, I've seen people get confused because: 1. They confuse SSDI with SSI (which DOES count all income including TSP withdrawals) 2. They don't realize TSP withdrawals are still reported to IRS and show up on tax returns 3. They don't understand that Medicare IRMAA surcharges are affected by all income, including TSP withdrawals So while your SSDI benefits are safe, just be aware of these other potential impacts.

The SSDI limits are RIDICULOUS anyway. How is anyone supposed to live on that??? The government expects disabled people to survive on poverty wages while politicians make six figures. The whole system is BROKEN. I can barely pay rent with my SSDI check and now we have to worry about touching our own retirement money??

Thanks everyone for the helpful replies. Just to summarize what I've learned for anyone else in my situation: 1. TSP withdrawals will NOT count against SSDI's SGA limit (currently ~$1,550/month for 2025) 2. This is because TSP withdrawals are considered unearned/passive income 3. If I were on SSI instead of SSDI, it WOULD count (thankfully I'm not) 4. I'll still pay income tax + 10% early withdrawal penalty 5. A TSP loan might be better than a withdrawal in my situation 6. The withdrawal might affect Medicare premiums later via IRMAA This community is amazing - you've saved me so much stress!

Hey Camila - just wanted to add one more thing about TSP loans that might help with your decision. Since you're no longer a federal employee, you CAN still take a TSP loan if you haven't already taken one out. The loan limit is typically 50% of your vested balance or $50,000, whichever is less. The big advantage is you're essentially paying interest back to yourself (currently around 4.125% I think), and there's no tax hit or early withdrawal penalty. You just need to make sure you can handle the monthly payments - they're usually spread over 1-5 years. However, if you default on the loan, it becomes a taxable distribution with penalties. Given that you're on SSDI with limited income, make sure the payment amount works with your budget before going this route. But it could save you thousands compared to a straight withdrawal!