Can I withdraw from my 401(k) if I have a disability?

If 401 (k) withdrawals or any other form of unearned income put you above the limit, you’ll need to pay income tax. One note: While there’s usually a 10% penalty for withdrawing from your 401 (k) before the age of 59 ½, you can withdraw early if you have a qualifying disability.

Should I take money out of my 401(k) if I'm disabled?

Taking money out of your 401 (k) may be necessary if you’re injured and can’t work. Before you take a 401 (k) withdrawal, read the rules regarding the exemption from the early withdrawal penalty when you’re permanently disabled, so you’ll know whether you need to budget for taxes and penalties.

Do 401(k) withdrawals affect SSDI?

SSDI is not impacted by unearned income — that is, money that doesn’t come from you working a job — so withdrawals from a 401 (k) plan will not affect your benefits. But there are tax implications that come along with 401 (k) disbursements.