Many people who receive Social Security Disability Insurance payments find it hard to make ends meet based on SSDI alone. However, circumstances can differ among beneficiaries based on where they live and their state. Due to the cost of living along with some other factors, some states are better to live in than others.
These include Texas, Louisiana, Iowa, Nebraska, North Dakota, Ohio, Oklahoma, and Indiana. So far, Texas, especially with the low cost of living of cities like Abilene, is best known for being a tax haven, which means that SSDI payments won’t get taxed.
Keep reading below as we discuss these places and their characteristics in more detail.
What is SSDI?
People who are disabled and unable to work may qualify for Social Security Disability Insurance or SSDI. The applicants’ medical condition must be terminal or expected to last at least a year for them to be considered disabled. SSDI is not intended for those who are only temporarily disabled.
The tax on earned income is what pays for Social Security Disability Insurance.
All employees in jobs that qualify for Social Security have their Federal Insurance Contributions Act (FICA) contributions deducted from their wages, and self-employed people pay Self-Employed Contributions Act (SECA) contributions based on their net earnings.
As a result, the recipient’s lifetime average earnings from Social Security-eligible employment determine their eligibility for SSDI, and payments are in proportion to that amount.
Applicants must have worked in jobs covered by the program for a minimum number of calendar quarters in order to be eligible for Social Security disability benefits.
Those who receive this aid must either have been born in the United States or be in the country legally.
If you or your spouse receive state disability benefits, certain pensions, or worker’s compensation, your Social Security Disability Insurance payments may be affected (likely reduced).
The Social Security Administration (SSA) provides online benefit calculators that can be used to estimate an individual’s monthly SSDI payment. In addition to receiving SSDI benefits, recipients are also enrolled in Medicare Parts A and B automatically after two years.
Depending on your income, Social Security Disability Insurance payouts may be subject to taxation.
Does Each State Have Its Own Disability Benefits?
Those who become disabled and are thereafter unable to work are eligible to receive disability benefits. Disability benefits are financial assistance that can be requested through the Social Security Administration. These benefits may help cover the costs of both day-to-day living and medical care.
Although SSA is a federal program with few variations between states, moving may affect your disability payments based on the kind of benefit you get and the state where you now reside.
Best States to Live in While on SSDI
Following are some of the best states to live in as an SSDI beneficiary:
1. Louisiana
Shreveport, Louisiana, has one of the lowest costs of living of any city, making it a strong contender for the title. High prices for a one-bedroom and an average livability rating keep it from being ranked higher. Two cities in Louisiana make the cut, with Shreveport being the first.
Lake Charles, Louisiana, also belongs on the list thanks to its exceptionally inexpensive average one-bedroom rent. The overall cost of living index is 83.1, with other costs ranking slightly higher.
2. Texas
Lubbock, Texas, is the first of six towns in Texas that make the cut for the best places to live solely off of a Social Security check. Although Lubbock has a low livability rating, its overall costs are about 20% lower than the national average.
Rents and general costs in Killeen are just a bit lower than in Lubbock, another Texas city with similar rankings. The city’s livability rating is also only slightly lower than Lubbock’s.
When compared to the other cities on this list, Midland has a higher-than-average cost of living. Midland, with expenditures only 8.3% below the national average, is the costliest of the top 15 places where one may get by on a Social Security check alone. However, the cost of a one-bedroom apartment is fairly low, making this a great option for budget-conscious people.
College Station, Texas, is among the best for livability with a score of 79, making it a top choice for retirees looking to make the most of their Social Security benefits. College Station is not the best since the average monthly rent for a one-bedroom apartment is higher than in other cities.
The average one-bedroom rental in San Angelo is $848.60 per month, more than double the national average. The city does well, though, because its overall cost of living is about 20% lower than the national average.
Abilene, Texas, tops the list of the finest places to live on a retirement income alone. Abilene has a low cost of living index, low average rent prices, and a high livability score, making it the best city in America for those trying to stretch a fixed income like Social Security.
3. Iowa
Besides Texas and Louisiana, Iowa is the only state with more than one city that is great to live in on SSDI payments alone, with both Des Moines and Davenport making the cut. Although the cost of living in Davenport is 21.5 percent less than the national average, one-bedroom rentals are very pricey.
Des Moines is probably the best when it comes to living on SSDI alone. The cost of living is low, and the livability score is good because the average one-bedroom rent is only $12.60 more than the best city in terms of rent, Abilene, TX.
4. Nebraska
When compared to the other top cities, Lincoln, Nebraska, has one of the best livability scores; nevertheless, its higher prices prevent it from being placed higher. The city’s cost of living is just 8.5% lower than the national average, and rents are rather costly when compared to other places.
5. North Dakota
Rents for a studio or one-bedroom in Fargo are above average, while the city’s overall cost of living is only 10.5% lower than the U.S. average. However, the city’s strong livability rating propels it onto our list.
6. Ohio
Cleveland, Ohio’s rentals are so low that the city is among the most affordable places to live for seniors. Cleveland has the lowest cost of living of any major American city, 27.7 percentage points lower than the national average. However, the city does have a poor livability score.
7. Oklahoma
Many Americans love living in Norman, Oklahoma because it is the home of the Oklahoma Sooners. Those who aren’t into football will still find the city’s high livability score and 13% lower-than-average cost of living attractive.
8. Indiana
Due to its low cost of living (which is 15% lower than the U.S. average), Jeffersonville, Indiana, has a high livability ranking. The city’s rather high cost for a studio apartment is a drawback, though.
Can One Get By on Disability Payments Alone?
The disability benefits provided by Social Security are an essential source of income for people who receive them. The money they get every month could be all they have to live on. However, receiving disability benefits alone can be challenging, if not impossible, in many parts of the United States.
The annual SSDI payment for someone receiving the average Social Security disability benefit ($1,358.30) would be $16,299.60. In all 50 states, that wouldn’t even come close to covering the cost of basic necessities, and it’s only slightly higher than the federal minimum wage (about $15,080 annually).
Where Can You Live on SSDI Alone?
It may be difficult to find an affordable place to live if you’re disabled and rely on Social Security Disability Insurance benefits. Although the federal government issues Social Security Disability Insurance payments, each state sets its own rules for them.
In spite of the challenges, it is possible to get by on Social Security Disability Insurance alone. There are very few options to live on a budget in large cities, but the cost of living is reasonable in a good number of the nation’s mid-sized towns and cities.
You may be able to maximize your benefits without compromising your quality of life if you are willing to relocate. Particular attention should be paid to the accessibility of buildings, the variety of attractions available, and the accessibility of public transit for people who use wheelchairs or other mobility aids.
The states of Texas and Florida are well-known for being tax havens since they have no state income tax. This also means that your SSDI payments will be unaffected by taxes in these states. While SSDI benefits are subject to taxation in some jurisdictions, this is not the case in others, such as Mississippi, Alabama, Ohio, and North Carolina.
What Happens to Disability Benefits If I Move in With Somebody?
Moving from one state to another should not affect your Social Security Disability Insurance benefits. This is because they are calculated using your previous employment and income.
Your Supplemental Security Income (SSI) payments may be reduced if you move in with a friend, significant other, or family member who resides in another state.
SSI is need-based rather than entitlement-based, like SSDI. Your eligibility for or amount of SSI benefits may change if you move in with someone who will be financially supporting you or who already receives SSI. So, if you find yourself in a similar situation, don’t delay in notifying the SSA.
Do I Need to Reapply for SSDI or SSI When Moving?
SSDI and SSI are both federal disability benefit programs. That means you can take your Social Security or Supplemental Security Income benefits with you to a new state without having to reapply for them.
On the other hand, if you are thinking about moving, you should contact your neighborhood Social Security Administration office as soon as possible and let them know your new address. You can also do this via the Internet.
To update your address, you can also log in to your My Social Security account. Or you can also reach the Social Security office by dialing 1-800-772-1213.
You may wonder, “Why should I update my address if I don’t have to reapply?” It is important to take precautions to ensure you continue receiving your Social Security disability benefits without interruption after moving to a new state.
By keeping your address up to date, you can help ensure that your checks for disability benefits are issued to your current location rather than the previous one you provided.
In addition, maintaining up-to-date records with the Social Security Administration makes it simpler for the agency to communicate with you regarding your eligibility for Social Security Disability Insurance and Supplemental Security Income (SSI), as well as to provide you with any relevant information.
What Happens If I Don’t Disclose My Relocation to the SSA?
You are required to immediately notify the Social Security Administration of any changes in your address, regardless of whether you are receiving SSI or SSDI benefits.
In addition, if you are receiving SSI, you are required to notify them of any changes to your living situation within the first ten days of the month following the one in which the change takes place.
If you fail to disclose the change in a timely manner, you run the risk of not receiving the full benefit amount, or alternatively, you run the risk of receiving more than you are entitled to (this is known as an overpayment) and having to pay some of it back.
You may be subject to a penalty from the Social Security Administration if you fail to disclose a change in your situation within the required time frame, and this penalty will be deducted from your regular benefits.
You must also inform the state agency in charge of your state supplement if you are relocating from a state where the Social Security Administration does not administer your state supplement.
If you fail to notify the state agency promptly of certain changes, they may impose penalties comparable to the Social Security Administration’s.
Conclusion
Now you know that there are certainly some states that are better than others when it comes to living on your SSDI payments. However, it’s important to make sure you report any changes concerning your living situation to your local Social Security Administration office.
