Investments: An Important Revenue Source for Those Who Have Disabilities

If you get Social Security benefits because of disability, there is a strict limit on how much income you can earn every month from working until you risk losing your benefits. Nonetheless, there’s no limit to the quantity of unearned revenue you can have, which means investments can be an important way to build wealth.


  • If you collect Social Security Disability (SSD) benefits, there is a limit to how much income you can earn from working. You may lose your benefits if you make too much.
  • For 2021 the earnings limitation is $1,310 per month; it is $2,190 per month for men and women that are blind.
  • There isn’t any limit to the amount of unearned income you can have, which means that you can earn money from investments such as bonds and stocks.

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What’s Social Security Disability Insurance?

According to the Social Security Administration (SSA),”Social Security pays benefits to individuals who can not operate because they have a health condition that is expected to continue at least one year or result in death.” 1

To qualify for disability benefits, you must meet two earnings evaluations:2

  1. A Recent Work Evaluation –This earnings test demonstrates you worked a certain quantity of time at the three- to 10-year interval (according to age) before you became disabled.
  2. A Duration of Work Evaluation –This test measures the quantity of time you worked over your life. Generally speaking, you can subtract the year you turned 22 in the year you became disabled to ascertain the amount of work quarters you want to meet with the duration requirement.

Along with the two earnings tests, the SSA also considers your medical condition, as it began, how it limits your activities, your medical evaluation results, and the medical treatments you have obtained when making its determination.3

If you qualify for benefits, you may continue to receive them until you go back to work on a regular basis. If you’re receiving disability benefits when you reach full retirement age–67 for people born in 1960 and after –your disability benefits will automatically convert to retirement benefits. The benefit amount will stay the same.45

Income Limits for Social Security Disability Benefits

For 2021 the monthly income limit is $1,310; it is $2,190 per month for men and women that are blind. If you are able to earn more than those amounts, the SSA deems you capable of engaging in”substantial gainful activity,” that keeps you from qualifying for benefits.6

If you work while getting SSD benefits, you need to report the income to the SSA, however little you earn. During a”trial work period” of up to eight months (not necessarily in a row), you can get unlimited earnings and still receive full benefits. When the trial work period is finished, the SSA will ascertain if you’re still eligible for disability benefits.6

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“SSD recipients are permitted to earn some income for a limited time and limited sum, mainly to fully examine their possible ability to go back to work and leave the SSD rolls,” says David Gantt, an Asheville, N.C., attorney who handles a huge volume of SSD cases. “After these very restricted times and amounts are exceeded, the Social Security Administration will review any documented income and also make [an] inquiry or an investigation.”

SSD Benefits and Investment Income

Income can be earned or unearned. Earned income is money you make while actively working, either for an employer or yourself. It includes wages, salaries, tips, bonuses, net earnings from self-employment, contract work, certain royalties, and union strike benefits.7 This sort of income counts from the monthly maximum for SSD eligibility.

Unearned income is money you earn or get through something apart from employment or busy work, and it does not count against the monthly income limits. Examples of unearned income include:8

  • SSD Benefits
  • Pensions
  • Presents
  • Inheritances
  • Dividends
  • Interest

“Some of our customers who get SS disability checks (SSD) have investment income from financial records (inventory, trusts, bonds), rental property, or other passive income resources,” states Gantt.

Bear in mind that if you have investment income, the SSA is very likely to want a good look. “Current technology assists flag questionable investment income information,” states Gantt. “I tell my customers who proceed in [the] investment stadium to anticipate questions and [a] review.”

1 way to get ready for questions would be to use an affidavit. “Financial investments are usually passive by nature. For true passive income earnings, we invite SSD customers to be ready to sign affidavits that they took no action on the investment income subject that could convert the income to the earned legal group,” says Gantt.

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Investments that Do Not Jeopardize SSD Benefits

Somebody who receives SSD benefits can invest in securities such as stocks, bonds, exchange-traded funds (ETFs), and real estate investment trusts (REITs) without jeopardizing their benefits. Dividend income from stocks, in addition to other sources of passive income, is OK up to the SSA is worried because it is unearned income. “The key is if the investment income is earned or not. Passive income isn’t earned in the legal significance of SS law and not counted as evidence of an ability to operate,” states Gantt.

Is Real Estate Income Earned or Unearned?

Income from property investments may count as earned or unearned, depending on the circumstance. If you would like to invest in property, you can purchase property stocks, funds, and REITs without jeopardizing your gains, because these investments offer a passive (aka unearned) income source. But what about purchasing physical property, such as a rental property?

“Actually, possession of rental property with no action has been approved and authorized in certain cases we managed,” says Gantt. “But, most landlord-owners are also taking action (remodeling, plumbing, electric, mowing, etc.) that push consequent income from passive to earned income.”

Because property investments could be a bit of a grey area,”we invite customers to ascertain the passive vs. earned income appearance and proof factors before starting investment earnings,” states Gantt. “[Our customers ] are cautioned that active involvement in rental property may cause a finding that the present handicap has raised, and [they] are no more SSD eligible.”

If you are thinking about investing in physical property –and maintaining your SSD benefits along the way–plan on talking with an experienced disability attorney who can help make sure that any income stays passive. Otherwise, it’s better to stick with the real estate stocks, funds, and REITs.

The Bottom Line

If you collect SSD benefits, you can have up to $1,310 ($2,190 if you’re a blind person) in earned income every month without risking your own benefits. Meanwhile, the estimated average Social Security disability benefit is $1,259 per month, based on the latest statistics available from the Social Security Administration (SSA).9 Combined, that is $2,569 monthly, or nearly $31,000 a year–a sum which may fall short of what is required to live comfortably.

Investment income–provided it is unearned–can provide a valuable chance for those who have disabilities to buffer their budgets and build wealth. For those who have questions regarding SSD eligibility or need help with affidavits to show you took no action on investment earnings, speak to an experienced disability attorney in your town or online.

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