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Learn More About the Laws Protecting Retirement Income.
Social Security Retirement Benefits
Section 207 of the Social Security Act, enacted August 10, 1939, protects benefits, with some exceptions, from assignment, levy, or garnishment.Five exceptions to Section 207 include garnishment to enforce a child support or alimony order, garnishment for past due federal taxes, an agreement between the IRS and recipient to withhold a portion of benefits to pay current federal income tax, garnishment to pay a past-due debt to any federal agency and permission for the IRS to garnish up to 15 percent of monthly benefits to satisfy a past-due federal tax debt.
Social Security Disability Benefits
Social Security Disability Benefits come in two forms - SSDI and SSI. The SSDI program pays benefits to you and certain family members if you are “insured.” This means that you worked long enough – and recently enough - and paid Social Security taxes on your earnings. The Supplemental Security Income (SSI) program pays benefits to adults and children with disabilities who have limited income and resources. Social Security Disability Benefits are protected by Section 207 of the Social Security Act, enacted August 10, 1939
Veterans Benefits
Veterans' benefits are protected from creditors with judgments and many other legal processes. This means any lawsuit for consumer debt like credit cards and other debts not owed to the federal government cannot result in a garnishment of your federal benefits. The federal laws protecting Veterans' Benefits from judgments are located at 38 U.S. Code § 5301(a),42 U.S.C. § 659(h)(1)(B)(iii) and 38 U.S.C. §1970(g).
ERISA Protected Pensions
Employer retirement accounts created under the Employee Retirement Income Security Act (ERISA) of 1974 are generally protected from garnishment or seizure by debt collectors and/or credtiors creditors. ERISA covers most retirement plans created by employers, including 401(k) plans, pension plans and some 403(b) plans. Regardless of the amount in an ERISA-qualified retirement account, the funds are protected from creditors.