In general, the Social Security Administration does not impose restrictions or limits on savings accounts or investment income. Passive income such as rental property rental income or investments does not exceed SSA earnings test threshold.
The threshold is determined by what Social Security Administration (SSA) considers “substantial gainful activity (SGA).” Any income exceeding this threshold will prompt an evaluation by SSA.
Stocks
Stocks (also referred to as equities or shares) represent partial ownership in a company and are the basis for investing. Investors purchase stocks for various reasons, such as to build long-term value or take advantage of short-term fluctuations. Many employers provide their employees with stocks as part of their wages while others purchase them philanthropically or meme investing (via subreddits such as r/wallstreetbets).
However, some investment income may be subject to taxes, so those on SSDI must be mindful of how this may impact their benefits. SSDI beneficiaries who receive investment income that puts them over their resource limit could face having any excess amount paid back, potentially leading to the loss of eligibility – it is therefore crucial that you plan ahead and consult with a Social Security disability lawyer when investing. Certain forms of investment income don’t count toward resource limits such as interest income from retirement savings accounts or trust accounts.
Bonds
Investments such as stocks, bonds, mutual funds and exchange-traded funds don’t count as compensation and can generally be held while on SSDI. However, income generated from such investments could compromise one’s eligibility if they show evidence of engaging in substantial gainful activity (SGA), where their income exceeds an established limit – this includes interest payments from savings and checking accounts.
SSDI does not impose as many restrictions on recipients as Supplemental Security Income (SSI), which requires them to engage in substantial gainful activity (SGA) and has strict limits on assets and income. SSI reviews each beneficiary’s financial situation on an ongoing basis and may reduce or terminate benefits if earnings or assets exceed certain thresholds, so keeping accurate records and reporting any changes promptly are vitally important for benefit eligibility.
Real Estate
Real estate can be an ideal investment – provided it does not count as income to the Social Security Administration (SSA). Ultimately, this depends on which disability benefits one is receiving; should the SSA determine that someone selling property for cash constitutes earning income, they could deny future benefits altogether – this is why disabled beneficiaries need to ensure all assets and income are appropriately classified with them; our national disability benefits lawyers can assist here.
An experienced attorney can also help ensure your assets are properly classified, filing the necessary application materials for SSDI and/or SSI benefits, to avoid interruptions or reductions to monthly benefits you currently receive. In order to be approved by Social Security Administration (SSA), proof must be presented that demonstrates a medically severe condition that prevents you from engaging in significant gainful activity, which requires working alongside medical providers.
Passive Income
Passive income does not require daily attention from you, yet still brings in wealth through investments and financial strategies. Passive income can serve as a powerful supplement to active income streams by offering safety nets that bring us closer to achieving financial goals.
SSDI recipients are allowed to invest in financial investments such as brokerage accounts, mutual funds and exchange-traded funds; savings accounts earned before receiving SSDI payments may also qualify.
Rental property and other passive income sources do not count toward Social Security Disability Income benefits. It’s important to keep in mind that rental properties require maintenance, along with some involvement on your part, making passive income an effective way of diversifying income and creating additional wealth; however, working with an experienced disability attorney to make sure your benefits do not get jeopardized is key to making sure these strategies don’t harm you in any way. Learn how best to manage and optimize your investments today – contact Michael Armstrong Law’s legal team now.
