7 Tips for Living Comfortably on SSD and SSI

Social Security disability (SSD) and supplemental security income (SSI) are federal benefit programs that provide financial resources to individuals who qualify. While SSD benefits are available to individuals with disabilities who have paid into the program through their employment, SSI is a “needs-based” program. This means that individuals can only qualify if their resources fall below the SSI threshold.

Many people who are on SSD and SSI face financial challenges. While these programs are intended to help people get by, they generally are not intended as full substitutes for full-time employment. Especially in cities like Baltimore with a high cost of living, living on SSD and SSI alone can be tough.

But, there are options available, and it is possible to live comfortably on Social Security disability and supplemental security income in many cases. If you have been wondering what you can do to live your best life on SSD and SSI, here are seven tips to consider:

Tip #1: Open an ABLE Savings Account

Under a federal law passed in 2014, qualifying individuals with disabilities can open an ABLE savings account to accumulate funds in excess of the SSI “resources” threshold and still remain eligible for SSI. In order to remain eligible for SSI, an individual cannot have more than $2,000 in a traditional bank account. The limit for couples is $3,000.

However, by opening an ABLE account, an individual who is on SSI can save up to $100,000—with contributions of up to $16,000 per year (as of 2022) from parents, other relatives and friends. If the individual is able to work, he or she can also deposit money into the account, and these deposits do not count toward the annual $16,000 limit.  

To qualify for an ABLE account, you must have a disability that began before your 26th birthday (you can still apply after turning 26). Your disability must cause a severe limitation of functioning, and your doctor must expect it to either last a year or longer or result in death. Saving money each month and accumulating a nest egg can remove a significant amount of stress from your life, so it can be well worth applying for an ABLE savings account if you qualify.

Tip #2: Open an Individual Development Account (IDA)

An individual development account (IDA) is another type of savings account that does not impact SSI eligibility. These savings accounts are used for specific purposes such as getting an education, buying a home or starting a business, and account owners can have their personal contributions matched by the government. In some cases, this matching is two-to-one, meaning that each time the account owner deposits $20, the government will deposit an additional $40 in the account.

While not all states offer IDA programs, many do—including Maryland. In order to qualify, you must either be working or receiving benefits through the Temporary Assistance for Needy Families (TANF) program.

Tip #3: Plan to Achieve Self-Support (PASS)

Plan to Achieve Self-Support (PASS) is a federal program that allows SSI recipients to save toward a specific purpose with the ultimate goal of returning to work. This can include getting an education or starting a business similar to an IDA, but it can also include things like buying a computer, buying tools, buying uniforms or saving up for transportation.

Setting up a PASS involves directly dealing with the U.S. Social Security Administration (SSA). First, you must submit your plan to the SSA for approval, and then the SSA will assign a PASS expert to evaluate your plan and assess whether your goals are feasible. If the SSA approves your plan, you can then start saving toward your goals without jeopardizing your SSI eligibility.

Tip #4: Establish a Special Needs Trust

A special needs trust is another option that is available to individuals who want to improve their quality of life and establish financial stability while receiving supplemental security income from the SSA. An option for individuals with disabilities, establishing a special needs trust allows an SSI recipient to avoid disposing of his or her assets to remain eligible, and it will enable friends and family members to provide financial support as well.

Tip #5: Sell Assets You No Longer Need

Selling things you no longer need is an excellent way to get some cash for things you need now. It can also be a good way to establish (or maintain) your eligibility for SSI. As the SSA explains, you can start receiving SSI benefits while you are in the process of selling your property—for up to nine months or longer in some cases.

Once you sell your property, you may have more than $2,000 in cash. This would also make you ineligible for SSI. However, you can use this cash to buy things that do not count as “resources” under SSI. Or, if you qualify, you can use it to establish an ABLE account, IDA account or special needs trust.

Tip #6: Create a Budget

Many people needlessly spend money each month that they could either be saving or using in other more-productive or more-fulfilling ways. If you do not keep track of your spending, or if you find yourself wondering where your Social Security benefits have gone at the end of each month, creating a budget is a good first step toward managing your finances more effectively.

Tip #7: Rely on the Advice of Professionals

Finally, from financial planners who can help with your budget to attorneys who can help make sure you are receiving maximum SSD and SSI benefits, there are professionals who can help you in a variety of different ways. For example, an attorney can also assist with determining your eligibility for an ABLE account or PASS and explain whether a special needs trust is a good option for your individual circumstances. If you have questions about living on SSD or SSI, you should not hesitate to seek help from an experienced professional near you.