Almost anyone who works a job and has earned income can open and contribute to a Roth IRA. This includes those drawing Social Security Disability Insurance (SSDI) benefits.
If you continue to work part time while getting benefits, you are eligible to invest Social Security Disability in a Roth IRA as long as you meet the other qualifications. Disability benefits do not count as earned income, so you will need to work a job in addition to drawing monthly disability to contribute to this type of retirement account.
At Berger and Green, our disability lawyers can help you understand how your benefits will impact your retirement savings. Call 412-661-1400 today for a free consultation.
How Much Can I Put Into My Roth IRA Each Year?
The U.S. Internal Revenue Service (IRS) sets maximum limits for contributions to Roth IRAs. While you must have earned income to invest, unearned income does not prevent you from making contributions. However, you will only be able to invest the amount you made from working. As long as you stay below the maximum the IRS set, you can put the equivalent of all your earned wages from the year into your Roth IRA.
For example, imagine you draw SSDI for a back problem, but you can work a few hours per month filing and taking care of office duties at a family business. You earn only about $1,200 a year. You can invest the full amount of your annual income in a Roth IRA.
Could My Roth IRA Affect My SSDI?
The only way your Roth IRA can affect SSDI is if you work too much. The Social Security Administration (SSA) allows you to work part time and receive a limited amount of income while you draw benefits, as long as you remain below the current substantial gainful activity (SGA) limit. Earning more than this limit could convince the SSA you are not disabled anymore and disqualify you from receiving monthly benefits.
It is also important to notify the SSA you are going to return to work before you begin engaging in job-related activities. If you do not notify the organization, you could jeopardize your benefits.
Can I Invest Other Disability Benefits in a Roth IRA?
To this point, we have only mentioned SSDI. That is because it is difficult to draw Supplemental Security Income (SSI) benefits and maintain a Roth IRA. While you can work part time and contribute up to the legal maximum, it will count against you when the SSA reevaluates your financial situation. As a part of getting SSI, you have to meet strict limits on your available assets. This would include your Roth IRA, and your retirement savings could prevent you from continuing to receive SSI.
How Can I Contact a Disability Attorney About My Benefits?
If you have questions or concerns about your how disability impacts your retirement investments, or if you believe the SSA is unfairly withholding your benefits, we can help. The disability team at Berger and Green offers free case reviews and can help you fight for the benefits you deserve. Call us today at 412-661-1400.