A Guide To Investing With Disability Income

Plenty of websites and TV shows have great advice for how to invest, what stocks are booming, and how to play the market. Unfortunately, investment advice is often aimed at people with steady and disposable income. Investing is important for your future. It can help provide for you and your family. This can be difficult for people living on a fixed income, such as those with Social Security Disability Insurance (SSDI).

Disability shouldn’t prevent you from being able to invest in your future. Contact a Social Security disability lawyer to learn about investing and keeping your benefits.

Can You Invest in Retirement Planning on Social Security Benefits?`

One challenge for people with disabilities is the limit on how much income you can earn before losing your disability benefits. Fortunately, this doesn’t apply to investments. The income limit applies to earned income. Dividends and capital gains from stocks are unearned income. So, they don’t count toward the income cap.

What Is the Difference Between Earned Income and Unearned Income?

You might be turned down for Social Security disability benefits if you make too much-earned income while disabled. People on Social Security disability are unable to work because their disability prevents them from substantial gainful activity. If you’re on disability benefits and get a job and make an income, you’re no longer eligible for disability benefits.

However, passive income isn’t subject to these limits. According to the Social Security Administration (SSA), unearned income covers payments like:

• Social Security benefits
• Pensions
• State disability payments
• Unemployment benefits
• Interest income
• Dividends
• Cash from friends and relatives

Any money you earn from stocks, bonds, funds, and other investments doesn’t count as compensation for SSDI. You can keep your SSDI benefits while making money in bank account interest or a brokerage account.

Surviving just on SSDI benefits can be difficult. Personal finance investments can make a big difference in helping provide for your basic needs. When you reach retirement age, your SSDI benefits will automatically change to retirement benefits. However, your monthly payment amount won’t change unless you save money for retirement.

Can You Get Supplemental Security Income With Investment Accounts?

Supplemental Security Income (SSI) benefits are for people with a low income. SSI isn’t based on your work record. You have to earn under a certain income limit and have limited assets to qualify.

Types of income for SSI include earned income and unearned income. This includes income from your disability payments. SSI also counts income from investments, real estate, and savings accounts.

Can You Qualify for Medicare and Medicaid With Investment Accounts?

You can get healthcare coverage through Medicare if you’re eligible for disability benefits for 24 months. States administer Medicaid healthcare, which is generally need-based.

You may not qualify for Medicaid if your source of income is over a certain amount. Medicaid eligibility rules depend on the state where you live. Some states exempt certain retirement accounts from countable assets.

What Are ABLE Accounts?

ABLE stands for Achieving a Better Life Experience (ABLE). ABLE programs are savings programs for people with disabilities. ABLE funds are generally exempt from SSI and Medicaid asset limits. Earnings from ABLE accounts can also be exempt from IRS federal income tax.

An ABLE account is a tax-advantaged plan, similar to college savings 529 plans. A disabled person can open an ABLE account before a certain age. The account is funded by after-tax contributions up to an annual limit. The account owner can take money from the account to pay for living needs and earnings, which are federally tax-exempt.

For more information about ABLE accounts and other investment options, talk to your financial advisor.

How Can a Social Security Disability Lawyer Help?

Many people face difficulties just getting approved for Social Security disability benefits. Once you start getting benefits, you don’t want to do anything to lose them. If you aren’t sure if you will lose eligibility for Roth IRA or brokerage account interest, talk to a Social Security disability lawyer.

Your attorney can give you legal advice about qualifying for disability benefits. Your lawyer can also appeal any SSA decisions that threaten your benefits. Contact a Social Security disability attorney for more information.