What you need to know about having a savings account while on SSDI or SSI

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• There aren't any savings account limits if you're applying for Social Security Disability Insurance.
• To receive Supplemental Security Income, you can only have up to $2,000 in your name.
• You may keep up to $100,000 in an ABLE account and it won't impact SSI eligibility.

If you're applying for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you'll need to meet specific requirements to be eligible for benefits. 

One of those requirements may be how much money you keep in a savings account. Here's what you need to know about your savings options if you'd like to receive disability benefits.

Eligibility requirements for Social Security disability benefits

The Social Security Administration has two programs that provide benefits to people with disabilities: 

• SSDI offers benefits to people with disabilities who have worked long enough to qualify for disability benefits. Qualifying for benefits will depend on when you developed a disability and how long you've worked.
• SSI offers benefits to people who are over the age of 65, blind, or have a disability. You will also need to meet the requirements for citizenship status and display limited income and limited resources.

Can you have a savings account if you receive Social Security disability benefits?

Yes, you can have a savings account if you receive disability benefits. However, your account balance may impact your eligibility depending on which benefits you're applying for.

SSDI does not have any savings account limits. This means any money you have saved in a bank account won't impact your eligibility for benefits. To qualify for SSI, individuals must have $2,000 or less in limited resources ($3,000 or less for couples).

According to the Social Security Administration, any of the following resources may be counted in your $2,000 limit:

• cash 
• bank accounts
• stocks, mutual funds, savings bonds
• cars (if you or a household member have one vehicle, it isn't included in the limit)
• personal property or land (the home where you live and that land it is on does not count, nor is property used for a business)
• life insurance (if your life insurance policy has a face value of $1,500 or less, it isn't factored in the limit)
• items that can be turned into cash and used for shelter or food

The Social Security Administration has a few exceptions that aren't counted as resources. For example, personal belongings aren't counted as resources.

If you have set aside money under the Plan to Achieve Self-Support (PASS) or in an Achieving a Better Life Experience (ABLE) account, those funds will not impact your eligibility for SSI. Burial funds of up to $1,500 for individuals will also not be taken into consideration.

Savings account options if you receive Social Security disability benefits

Savings account

You can open regular savings account at a brick-and-mortar or online bank. Be mindful of the savings limit if you're applying for SSI, though. 

PASS program

People who receive SSI and want to return to work might consider becoming part of the PASS program. PASS allows people with disabilities to put aside money for materials that can be used for work.

For example, if an individual wants to attend training to reach a work goal, they can research costs, and PASS can help them save money to reach their goal. 

To set up PASS, you can visit a local Social Security office and create a plan with a vocational rehabilitation (VR) counselor. Your plan will be reviewed by a PASS expert for approval. If it isn't approved, you may appeal the decision.

Trust

Alexandria Dunn, CFP® professional, CTFA, wealth advisor, and partner of Affinia Financial Group, says that if a parent is helping a child with a disability, they might set up a special type of trust that would allow their children to save for the future.

Special needs trusts and pooled trusts are considered exceptions and aren't factored in when determining SSI eligibility. Trusts also won't be taken into account if you meet the requirements for undue hardship.

If you have a trust that is not considered a resource, bear in mind your SSI benefits may still be reduced, though.

If money from the trust is used to pay someone to provide food or shelter, up to $300.33 can be taken out of your SSI benefits each month. If money is used for other expenses — such as medical care or telephone bills — your SSI benefits will not be reduced.

ABLE account

An ABLE account is a savings option for people who had a disability before the age of 26. An ABLE account won't affect your eligibility for government assistance like Social Security income or Medicaid.

You may keep up to $100,000 in an ABLE account, and that won't impact your eligibility to get SSI. However, you'll only be able to deposit a certain amount annually.

In 2022, you may deposit up to $16,000 in an ABLE account annually. If you're working, you can save additional money in an ABLE Account. For 2022, you may save an extra $12,880 per year if you live in the continental US, $16,090 if you live in Alaska, and $14,820 if you live in Hawaii. 

Before the passing of the ABLE account, Dunn says there weren't savings options for individuals with special needs.

"They were forced to be in poverty. If you were on SSI, you would be disqualified if you had more than $2,000 in your name. If you think about it, all of us may have some type of emergency expense that would come up that our monthly expenses would not cover," explains Dunn.

With an ABLE account, Dunn says people with disabilities can save for the future instead of focusing on trying to qualify for benefits.

To get an ABLE Account, you'll need to apply through an ABLE state program. There are programs in every state except Idaho, North Dakota, South Dakota, and Wisconsin. You also don't have to be a resident to apply to some of the ABLE state programs. 

Similar to 529 plans, there are also several different investment options with an ABLE Account.

"We suggest —  as with any investment — investing for the time horizon that the funds plan on being used. If the person plans on using these five or more years later, they may choose to invest in a combination of stocks and bonds. If they plan on using it as an emergency reserve savings account, they may want to keep it in cash," advises Dunn.