How Do SSDI and IRAs Work?

SSDI is an insurance program set up to help people whose injuries or disabilities prevent them from working. We all pay into it every year, and if something ever happens to us, we can request disability payments. As an SSDI attorney in Memphis, I help people get these benefits every single day.

An IRA is a retirement savings account that you can pay into as an investment. Your payments have to come from something called “earned income,” which just means money you get from paid work.

Disability payments aren’t considered “earned income.” But you can receive SSDI payments and still make a small income. In 2022, the maximum you can earn while on SSDI is $1,350/month (and $2,260 if you are blind).

Because you are allowed to earn a small amount of side income and still receive SSDI, you can pay into an IRA even while receiving SSDI benefits. However, there are some important rules to follow.

How To Pay Into an IRA While On SSDI

If you want to invest in a retirement fund while receiving SSDI payments, you’ll have to do so out of your extra earned income.

For example, say you receive a disability check every month, but you also make $400 extra driving for a carshare app like Uber or Lyft. That extra money is earned income, and you’re allowed to spend it or invest it however you’d like. If you were able to cover all of your expenses using your disability payment, you could put all of your earned income (in this case, $400/month) into an IRA and no one would stop you.

Just remember of two big rules:

  1. Firstly, there’s a maximum you can contribute to an IRA. In 2022, that’s $6,000 total. If you go over, you’ll be charged a penalty.
  2. As I mentioned before, there’s a maximum you can earn while on disability. In 2022, that number is $1,350/month (or $2,260 if you are blind). If you go over that, you’ll lose your benefits.

An SSDI Attorney in Memphis with Financial Expertise

If you’ve applied for SSDI and been denied, you need an attorney for your appeal. Fortunately, our attorneys help people in your situation every day, and we can help you.

Because we also handle bankruptcy for people looking to retire, we have a certain expertise about saving up your money and living on a budget. We know how complicated the rules around SSDI can feel, and we’re committed to helping you make it out more financially secure.

For a lot of our clients, the best way to prepare for retirement is to get out of debt and free up money to save for the future. And if that’s your situation, we can always talk with you about your options.

Imagine having an attorney who can win your SSDI appeal AND set you up for long-term financial success. That’s what we do here, and we’re really good at it.

If you need to appeal your SSDI application, there’s no time to waste. Call me today at 901-327-2100 or contact me using the form below. I look forward to talking with you.