WHAT IF I RECEIVE DISABILITY AND WANT TO CASH OUT AN IRA?



Can I cash out an IRA if I am receiving Social Security Disability?



 
I am on disability and Medicare. I have an IRA that I would like to take $50,000 out of to put down on a home (not sure what kind yet). Am I allowed to do this, and if so, can I do it tax free? I would appreciate your answer greatly. Thanks!



If you are receiving Social Security Disability based upon your work activity (meaning that you were approved for SSDI on the basis of the work credits you accumulated versus being approved for SSI which is not based on work history), you can cash out an IRA if you wish to do so with no problems.

Social Security Disability and Medicare are not need based disability programs, therefore they are not subject to income and resource limits as is the case with the SSI disability program.

As to your question about the taxability of your IRA withdrawal, that really is a question for the IRS or your tax person.

I hope this answers your question and that your home purchase goes well.


About the Author: Tim Moore is a former Social Security Disability Examiner in North Carolina, has been interviewed by the NY Times and the LA Times on the disability system, and is an Accredited Disability Representative (ADR) in North Carolina. For assistance on a disability application or Appeal in NC, click here.







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