How Do People on Disability Survive Financially?

If you are applying for disability, you might wonder what you can do with the money you get from SSDI payments or other benefits. People often want to know how to use their benefits to save for the future and financially thrive.

While the government does not totally control what people do with the money they receive from SSDI or other disability benefits, there are sometimes restrictions. Generally, people on disability may put their money into savings and investment accounts. However, there are some distinctions between SSDI and SSI. The type of benefits you receive might influence how you plan financially. While SSDI recipients face few restrictions, SSI recipients are more limited in what they can do with the money. Another issue is what to do while you wait for your benefits to kick in. There is often a waiting period of several months where people go without income. A disability lawyer can help you make plans to survive while waiting.

Speak to our disability attorneys at Young, Marr, Mallis & Associates by calling (215) 515-2954 and get a free evaluation of your case.

Can You Have a Savings Account While on Disability?

It is possible to have a savings account while you receive disability benefits. Suppose your weekly disability benefits leave you with a little extra. In that case, you can put it into a savings account and build a financial safety net for yourself in case you encounter unexpected expenses in the future. However, the nature of your disability benefits might play a role in what kind of savings you can have.

Generally, SSDI benefits are based solely on your work history and disability status. As such, you can save the money you receive through SSDI as you see fit. If you receive SSI benefits, however, the situation is different. SSI benefits are often based on your current financial resources. If you build up a large savings, your SSI benefits might be in jeopardy because you have sufficient financial resources to care for yourself.

If you already have a savings account or want to start one with the money you get from your disability benefits, talk to a lawyer. Our disability lawyers can determine how much you can save based on the nature of your disability and what type of benefits you receive. Often, recipients of disability benefits are encouraged to save so they do not have to live from check to check.

Financial Planning for Long-Term Disability

Many disability recipients are allowed to save their money. The next logical question is, how do I save? Budgeting and saving are tricky situations in general, including for people who work and do not receive any form of disability benefits.

Generally, once a person receives their disability payment, it is their money to do with as they wish. Ideally, recipients should be using the money to cover things like medical bills and pay for daily living costs. However, if you want to blow all the money on things you do not need, that is your choice. Many people invest some of the money they get from disability benefits. Again, how you may invest depends on what kind of benefits you receive and the type of investment account you want to open.

You are also allowed to plan for fun things like vacations. The fact that you support yourself with SSDI benefits does not mean you are not allowed to enjoy your life.

If your income from disability benefits is not enough to support yourself, talk to a lawyer. There might be ways you can increase the amount of money you get each week. Alternatively, there might be other forms of assistance that are better than your current benefits or may be combined with your current benefits. An experienced lawyer can help you.

Can You Invest While on Disability or Long-Term Disability?

Generally, yes. You are allowed to invest the money you get from disability benefits. However, not all investment accounts allow you to do so.

SSDI benefits are not based on your current financial resources. Whether you are already wealthy or struggling financially, you may receive SSDI benefits based on your average weekly income. There is no set rule that prohibits people who receive SSDI benefits from investing that money and preparing for retirement.

There might be restrictions on whether you can invest in certain investment accounts, like a Roth IRA. According to the IRS, money must be considered income to be invested in a Roth IRA account. The IRS does not consider money derived from disability to be income. As such, you might not be able to invest it in a Roth IRA or other types of investment accounts. Talk to your lawyer about financial planning to determine the best way to invest your money.

What to Do for Income While Waiting for Disability?

A major concern among people waiting for their first disability check is what to do for money in the meantime. There may be a 5-month waiting period before you get your first check. People waiting for disability might not have the financial resources to survive for that long without any income.

Do you have current savings? If your savings can last until your disability benefits begin coming in, you might be fine. Once you begin receiving disability benefits, you can replenish your savings account over time.

Do you have family or friends who can help? Many people rely on friends or family for assistance while waiting for their first disability check. This might involve a small loan from a family member or moving in with a friend until you are more financially stable.

Are there other forms of public assistance you qualify for that you can use while waiting for disability benefits? Many people make ends meet by using food stamps to help pay for groceries. Your state might also offer various short-term benefits.

Talk to Our Disability Attorneys for Support and Assistance

Speak to our Pennsylvania disability attorneys at Young, Marr, Mallis & Associates by calling (215) 515-2954 and get a free evaluation of your case.

Related Articles

How Bankruptcy Can Protect You

Filing for bankruptcy is often thought of as a sign of failure. At best, it is seen as a last resort when faced with too many bills, collection letters, or […]

Read More »

Means Testing in Chapter 7 or Chapter 13 Bankruptcy

Bankruptcy has many layers. Before filing, a potential debtor will have to gather their bills, bank statements, tax returns, and proof of all household income for the previous six months. […]

Read More »

How Many Types of Social Security Benefits Are Available?

While it is necessary to be disabled to receive disability benefits, the non-medical requirements are different for each category. You may be entitled to one or more types of benefits. […]

Read More »

Have an Attorney Review Your Case for Free

Get a Free Case Evaluation

Contact Our Attorneys To Learn How We Can Help Your Case


12 Convenient Locations Across Pennsylvania and New Jersey

Philadelphia, PA

7909 Bustletown Ave, 1st Floor Philadelphia, PA 19152 (215) 607-7478 Get Directions

Quakertown, PA

328 Broad St. Quakertown, PA 18951 (215) 515-6876 Get Directions

Allentown, PA

137 N 5th St. Suite A Allentown, PA 18102 (215) 240-4082 Get Directions

Jenkintown, PA

135 Old York Road Jenkintown, PA 19046 (215) 544-3347 Get Directions

Easton, PA

101 Larry Holmes Dr. #212 Easton, PA 18042 (215) 515-7077 Get Directions

Bala Cynwyd, PA

2 Bala Plaza, Suite 300 Bala Cynwyd, PA 19004 (610) 557-3209 Get Directions

Bensalem, PA

3554 Hulmeville Rd, #102 Bensalem, PA 19020 (215) 515-6389 Get Directions

Plymouth Meeting, PA

600 W. Germantown Pike #400 Plymouth Meeting, PA 19462 (215) 515-6876 Get Directions

Harrisburg, PA

2225 Sycamore St Harrisburg, PA 17111 (717) 864-8887 Get Directions

Cinnaminson, NJ

909 Route 130 South #202 Cinnaminson, NJ 08077 (609) 796-4344 Get Directions

Hamilton Twp., NJ

100 Horizon Center Blvd., 1st and 2nd Floors Hamilton Township, NJ 08691 (609) 236-8649 Get Directions

Marlton, NJ

10000 Lincoln Drive E One Greentree Centre, Suite 201 Marlton, NJ 08053 (856) 213-2805 Get Directions

Piscataway, NJ

200 Centennial Ave. Suite 200 Piscataway, NJ 08854 (908) 367-7256 Get Directions