Does a 401(k) Count as an Asset for Section 8?

Section 8 is a housing assistance program managed by the U.S. Department of Housing and Urban Development (HUD). HUD assistance gives you vouchers you may use for paying rent. This program ensures that families with very low income still have a place to live. When you receive a 401(k) as either an inheritance or you lose your job and you have a 401(k) from your former employer, you must disclose this fact when applying for assistance.

A 401(k) plan is a retirement plan. Money is held in a trust account for you until you retire. This money is withdrawn and used to supplement a pension, Social Security or both. The money is considered an asset for Section 8 housing. You must disclose this information when applying for benefits.

You may be denied Section 8 due to a 401(k) plan. Inherited 401(k) plans of a sizable amount signal an ability to pay for rent on your own without any help from the government. A 401(k) plan you have from a previous employer also signifies an ability to pay for housing on your own. This is essentially savings you have not used, even though it is ordinarily considered retirement savings.

You are not necessarily denied benefits under Section 8 just because you have a 401(k) plan. You must speak with a caseworker and determine your eligibility based on the amount of money you have and your overall financial situation. You may still qualify for benefits.

You should not immediately spend any 401(k) plan money you have before applying for Section 8. You should first apply for benefits and speak with someone to determine whether your 401(k) will affect your eligibility for Section 8. Even if you're denied, you may reapply later, so there is no disadvantage to applying for benefits when you have a retirement account.