Tip #7: Individual Retirement Accounts (IRAs) and 401(k) Plans
Retirement savings vehicles like traditional IRAs, Roth IRAs, 401(k) accounts, and 403(b) plans require attentive oversight under Social Security regulations. If you possess the legal authority to withdraw cash from a retirement plan—even if doing so triggers early withdrawal tax penalties—SSA treats the net cash value as a countable asset. For a retired individual, the full lump-sum equity value counts toward what assets disqualify SSI. Additionally, if your spouse owns a retirement account, SSA deeming rules may count a portion of their retirement equity against your $3,000 married resource ceiling. If you choose to convert your retirement account into periodic, recurring annuity payments, SSA changes its valuation method; the principal balance may no longer count as a resource, though the monthly distribution checks will count as unearned income.
