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401(k) Withdrawals Do Not Affect a Disability Annuity
(Posted June 15, 2004)
Question 464: My husband is receiving a disability annuity. He wants to take his 401(k) and use that money to pay some bills, instead of rolling it over. Does this lump sum payment decrease his disability annunity payment?
Answer: Withdrawing 401(k) funds do not count as income for a disabled worker under the Railroad Retirement rules.
The 401(k) withdrawal might be taxable income for federal and state income tax purposes. You should consult with a tax accountant for authoritative information on income taxes.
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