IRAs and Social Security Disability

Now that tax season is in full swing everyone is looking for ways to shuffle money around to get the biggest tax breaks. One trick people often use is contributing to an IRA or Roth IRA. For most people, IRAs are a simple way to save money for the future and get a tax break, but for some who receive benefits for Social Security disability IRAs aren’t so simple.IRAs and Social Security Disability

Let’s take a look at how IRAs can affect Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).


If you’re receiving benefit payments for SSDI, you’re IRA will not affect your benefits. SSDI recipients can put money and take money out from an IRA, and the SSA won’t say a word. This is because there’s no financial limits for SSDI.

Because there’s no limit the SSA will not take your financial situation into account when you apply. This means you’re allowed to have assets like investments and savings.

While there’s no financial limits, there are limits to the income you can have from working. This limit exists because the SSA assumes that if you’re working and earning a certain amount of income from wages then you are not disabled.


On the other hand, SSI recipients are limited on IRAs. SSI is designed for individuals with low income and the SSA sees an IRA as a financial resource. So if you have an IRA in your name the SSA might require you to deplete that account before they approve you for benefits.

Let’s say there’s an IRA that’s in someone else’s name that you get money from. This can also be considered a financial resource and the SSA can reduce your benefit payments based on the amount of the IRA payment.

To sum it all up:

  • If you’re on SSDI, an IRA will not affect your benefits.
  • If you’re on SSI, an IRA can affect your benefits.
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Jan Dils, Attorneys at Law

Jan Dils, Attorneys at Law