Will cashing out a pension affect my husband's SSDI benefits? Reporting requirements?

Pensions don't effect SSDI at all. Only work income counts against SSDI. My brother cashed out his 401k last yr and it didnt change his disability check one bit. You should be fine

The previous response isn't entirely accurate for all situations. While it's true that SSDI itself isn't means-tested (unlike SSI), there are some important considerations here: 1) The pension cash-out won't affect SSDI directly, but you should still report it to SSA as a significant financial change 2) If your husband is also receiving SSI (Supplemental Security Income) in addition to SSDI, then the pension withdrawal WOULD affect those benefits as SSI has resource limits 3) Be aware that a large lump sum could potentially affect other benefits you might be receiving like Medicaid or Medicare premium assistance if you're in the Medicare Savings Program 4) There may be significant tax implications to consider with a lump sum pension distribution I'd recommend calling SSA directly to verify your specific situation before making any decisions.

SSDI and SSI are COMPLETELY different programs!!!! People always confuse them. SSDI is based on work credits and is NOT affected by assets or unearned income. SSI is for people with limited resources who didnt work enough and IS affected by assets/income. The person above is right about reporting it though. Always report EVERYTHING to avoid headaches later!!! I learned this the hard way when I had to fight an overpayment for 6 months.

Hey there, I went through something similar with my wife's pension last year. You're asking the right questions! While the previous responses are correct that the pension cash-out won't affect SSDI benefits (since SSDI isn't means-tested), I absolutely recommend reporting it anyway. When I had to reach SSA to discuss our situation, I was getting nowhere with regular phone calls - constant busy signals and disconnections. I finally discovered a service called Claimyr (claimyr.com) that got me through to an actual SSA agent in about 20 minutes instead of spending days trying. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed that unearned income doesn't affect SSDI but still documented the pension withdrawal in our file to avoid any future issues. Better safe than sorry when dealing with benefits!

everyone here is right about SSDI not counting the pension BUT make sure your husband isnt getting any means-tested benefits in addition to SSDI. check for MSP, medicaid, snap, housing assistance etc. those WILL be affected by a lump sum. i work in benefits counseling.

Update: I finally got through to SSA yesterday! The representative confirmed that cashing out the pension won't affect my husband's SSDI, but I should still report it for their records. She also warned me that since we get Extra Help with Medicare premiums through the Medicare Savings Program, we need to report the withdrawal to our state Medicaid office too since that program IS means-tested. The pension cash-out might temporarily affect our eligibility for premium assistance. The agent suggested we might want to consider whether we need all of the pension at once or if we could take a partial distribution to stay under the resource limits for MSP. Thank you all for your help!

Good to hear! Dealing with SSA is always soooo confusing. My mom was in a similar spot and the agent she talked to didn't even mention the Medicare Extra Help program being affected! She found out the hard way when her premiums suddenly went up.

Glad you got the information you needed! This is exactly why I always recommend speaking directly with SSA about your specific situation. The rules around these benefits can be quite complex with different programs interacting in ways that aren't always obvious. One additional suggestion - make sure to keep documentation of your reporting (date, time, name of representative if possible). If there's ever a question in the future about whether you reported the change, having that documentation can be invaluable. SSA's internal notes systems aren't always perfect.

Great advice from everyone here! Just wanted to add one more thing that might be helpful - if you do decide to cash out the pension, consider consulting with a tax professional beforehand. Lump sum pension distributions can have significant tax implications, especially if it pushes you into a higher tax bracket for that year. You might end up owing more in taxes than expected, which could eat into the funds you need for the medical equipment. Some people find it beneficial to roll part of the pension into an IRA to spread out the tax burden. Just another consideration for your financial planning!