Most people are familiar with Social Security but less familiar with Supplemental Security Income, or SSI. This program is also administered by the Social Security Administration, but these funds go to U.S. citizens who, in addition to having limited income and assets — SSI is generally for individuals who don’t earn more than $1,971 from work each month as of 2024 — also have a qualifying disability, including blindness, and are either children or age 65 and older. As of January 2024, as many as one million children were on SSI.
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While people on SSI might not have a lot of money to put aside in savings, they might have had savings prior to going on SSI, or come into occasional windfalls, such as a tax return or a gift.
How Much Can You Save on SSI?
Because the government is providing assistance, the program limits how much a person receiving SSI can keep in assets, which includes a savings account. As of 2024, SSI beneficiaries are not allowed to have more than $2,000 in assets for individuals and $3,000 for couples. There are some exceptions that don’t count toward your asset value, including:
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Your home and the land it’s on, so long as you reside on or in it
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One vehicle per household
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Most of your personal belongings and your household goods
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Any property that you can’t sell or otherwise use
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State SSI supplement payments
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Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps)
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Section 8 housing vouchers
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Rent rebates or property tax refunds
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Temporary Assistance for Needy Families (TANF)
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Some other expenses associated with disability or blindness.
SSI will be reduced for any beneficiaries who have other sources of income, who live in a Medicaid facility or who reside with a person who provides financial support. So, what can a person who depends upon SSI do to maximize the limited savings they do have?
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Open an ABLE Account
Marty Burbank, owner of OC Elder Law, an attorney who is an expert in estate planning and elder law with a focus on helping seniors and veterans, knows how difficult it is to live on a limited income.
One strategy for managing savings within these limits is to use ABLE (Achieving a Better Life Experience) accounts, which allow individuals with disabilities to save up to $100,000 without affecting their SSI benefits, he explained.
“These accounts can be used to pay for qualified disability expenses, covering costs like housing, education and transportation. This ensures that savings exceed SSI limits without penalty while still providing a safety net for essential living expenses,” he said.
Special Needs Trusts (SNTs)
Special needs trusts are another valuable tool, Burbank explained. “These trusts do not count against the SSI asset limit, enabling recipients to set aside funds for future needs without jeopardizing their benefits.”
An SNT can be used for various expenses, including medical treatments, caregiver expenses and even travel, improving the quality of life while preserving eligibility for SSI.
Effective Budget Management
Of course, effective budget management and prioritizing essential expenses can make a significant difference, as well, Burbank said.
“Encouraging clients to use their savings for needs that directly enhance their quality of life, while keeping their liquid assets below the SSI limit, helps maintain their financial stability,” he said.
He suggested practical steps, such as developing a monthly budget, reducing discretionary spending and seeking out additional benefits programs like SNAP or housing assistance to alleviate some financial burdens.
“Through my years of experience, these strategies have proven effective in ensuring that individuals receiving SSI can maintain their benefits while still enhancing their financial security and quality of life,” he said.
Promote Policies To Raise the SSI Asset Limit
Though individuals can only do so much to affect policies about SSI asset limits, Darcy Milburn, director of Social Security and healthcare policy at The Arc of the United States, an organization that fights for the rights of people with physical and intellectual disabilities, believes in promoting higher limits.
She argued that “SSI’s strict asset limits force people with disabilities to live on a financial knife’s edge. It’s an incredibly difficult administrative burden and a very delicate balancing act that can easily tip to losing benefits altogether, which can be catastrophic.”
She explained that decades of inflation and inaction have turned a crucial safety net program into a tightrope.
“The maximum amount of money an SSI beneficiary can have in a bank account is 80% less than what beneficiaries were allowed to save in 1972,” she said. “Thus, raising the SSI asset limit is one of the most important things we can do right now to improve financial security for millions of older adults and people with disabilities.”
She described the current asset limits as a trap that keeps people in poverty, creates barriers to work and makes financial independence virtually impossible.
“SSI beneficiaries cannot save for necessary expenses like a security deposit or car repairs without the risk of losing their benefits — leaving many just one emergency away from homelessness and hunger,” she pointed out. “The negative impacts of the current SSI asset limits extend beyond individual SSI beneficiaries to their families, communities and our economy as a whole.”
While policy changes won’t happen overnight, anyone can spread greater awareness, whether you’re on SSI yourself or a loved one is.
In the meantime, targeted savings accounts and hyper frugality are the keys to making the most of your limited income.
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This article originally appeared on GOBankingRates.com: Social Security: SSI Has Savings Limits — What They Are and How To Maximize Your Income
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