Passive Investments-Extra Income for Disabled People

Whether it is physically, mentally, or socially disabled people, a large part of their income goes for medical treatment. Even though there are social security benefits for people with disabilities, these services have strict limits. There are limits on how much active, earned income you can earn each month. It is better to consider these numbers in advance before you risk losing the benefits. However, there is no limit to the amount of passive income you can have. It means that investment can be a valuable way to gain wealth.

People with disabilities can obtain social security disability insurance. However, there are some required conditions to qualify for the insurance. You need to provide the most recent work evidence. It will prove that you have worked for a certain amount of time in 3-10 years before your disability. Also, you need to provide information on what amount of time you have worked in your lifetime.

Besides, Social Security Administration (SSA) also considers your medical condition. When it started, how it restricts your abilities, your medical examination results, and the medical treatment you have received.

If you are eligible for benefits, you will continue to receive them until you return to work regularly. If you receive disability benefits when you reach the full retirement age, benefits will automatically convert to retirement benefits. The benefit amount will remain unchanged.

Income Limits for SSD Benefits

The monthly income limit for 2021 is $1,310, $2,190 for the blind person. If your income exceeds these amounts, the SSA considers you capable of “substantial paid activities,” making you ineligible for benefits.

If you are working while receiving SSD benefits, you must report your income to SSA regardless of your income. SSA will give you a nine-month trial period. During the trial, you can get unlimited income and still get SSA benefits. After the trial expires and your payment is over a limited amount, SSA will reconsider your SSD benefits.

The investment that will not harm SSD income

Nowadays, we consider investments an intelligent way for extra income. Are disabled people eligible to make investments? Is it going to harm their SSD benefits?

There are two types of income sources: earned and unearned. Earned income is the money you make for your employer or yourself while you are actively working. Unearned income is a passive income, which you do not obtain from actively working.

The importance is whether the investment income is an earned income or not. Passive income is not the earned income in SS law’s legal meaning, so it doesn’t count as evidence of workability.

People who can get the benefits of SSDs can invest in stocks, bonds, exchange-traded funds (ETF). Also, in real estate investment trusts (REIT), without compromising their earnings. Dividend income from stocks and other passive income sources is okay because it is unearned income.

Real estate investment income may be the earned or unearned income, depending on the situation. If you want to invest in real estate, you can buy real estate stocks, funds, and real estate investment trusts. It won’t harm your interests because these investments provide a passive source of income.

Active participation in rental properties may make people with disabilities lose their benefits and no longer qualify for SSD.

If you desire to invest in real estate and to maintain SSD benefits, plan to talk to an experienced disability lawyer. They can help ensure that any income remains passive. Otherwise, it is best to stick to real estate stocks, funds, and real estate investment trusts.

If the investment income unearned, it can provide the disabled with valuable opportunities to buffer budgets and accumulate wealth.