Social Security Disability Insurance (SSDI) is intended to financially help people who are too disabled to return to work. As such, many people with disabilities find that living on SSDI alone can be challenging. But how long can you live on SSDI alone?
You can live on SSDI alone for as long as your benefits last, given that you are able to take into consideration other factors that affect your overall expenses and SSDI payments. For example, moving to another, cheaper state could reduce your overall expenses.
Keep reading below as we discuss in more detail how long you can live on SSDI and tips for doing so.
How Much Does SSDI Pay?
Social Security Disability Insurance payments vary greatly for each person. This is due to the SSA employing a complicated technique when determining your benefits. Each person has a unique monthly payment that is dependent upon the amount of Social Security taxes they have paid:
Your average indexed monthly earnings (AIME) are your total earnings over a period of time. Only Social Security taxed income is counted toward AIME.
The Social Security Administration (SSA) determines your “primary insurance amount” PIA based on your AIME. The PIA serves as a starting point for your calculation. You will receive your benefits based on the information in your PIA.
It’s clear from this explanation that calculating your SSDI payments is not an easy procedure. Your Social Security statement is the best place to go for details about your earnings history. Visit the SSA website to view this online.
How Long Could You Survive on SSDI Alone?
How long you survive on SSDI alone depends on a number of factors that are different for each person. For example, factors such as rent, miscellaneous expenditures, or other upcoming expenditures may be different for each person.
In general, it is challenging to survive on SSDI alone, however, there are a few tips that can help you get through.
Tips to Live on SSDI Alone
Following are some tips you can follow to help you live on SSDI payments alone.
Delay Your Benefits
The Full Retirement Age, according to the SSA, starts at 66 years old (and changes depending on your birth year). SSA provides you the option of taking early retirement by applying for SSDI benefits when you turn 62 years old. But this comes at a cost; your SSDI benefits are reduced.
If you would like to receive your maximum benefits, then you should wait until you reach full retirement age before you apply for Social Security Disability Insurance. But what do you do if you’ve already filed for SSDI at 62 years old?
Well, not to worry, because it’s not too late. After you apply for SSDI, the SSA gives you a 12-month window in which you can reverse your benefits. All you have to do is pay back the benefits you received (without interest). You can reapply once you reach full retirement age.
Relocate
Although where you live does not have an impact on how much SSDI you receive, the state you live in can indirectly impact your SSDI benefits.
As some states are more expensive than others, you may be able to stretch your SSDI benefits a bit more if you move to a cheaper state. Some factors to consider involve the average livability rating, the overall cost of living index, housing options, etc.
Some states such as Texas are considered “tax havens,” which means you won’t have to pay taxes on your SSDI payments. In fact, Abilene, Texas, is considered to be the best place to live if SSDI payments are your only source of income.
Pay Off Debt
Any outstanding debt that you have can be withheld from your SSDI benefits. Therefore, it’s important to pay off your debt before you apply for SSDI benefits.
If you are unable to completely pay off your debt before retirement, even by just lowering the balance as much as possible ahead of time will help you save money in the long run.
You should, ideally, be able to pay off your mortgage in full long before you plan to retire. If that isn’t an option, then you shouldn’t spend all your savings to zero out the debt before you retire.
During the process of budgeting for your retirement, make sure to keep in mind that you must budget for those ongoing mortgage payments.
Apply for Survivor’s Benefits
When a spouse passes away, the household no longer receives two monthly Social Security payments. If a married couple has different Social Security benefits, the surviving spouse will receive the higher of the two benefit payments.
Therefore, a higher-earning spouse who is unwell or isn’t expecting to live for a long time should think about the survivor’s payout he or she will be leaving behind.
Widows and widowers who delay filing for Social Security may be eligible for a larger benefit. If it’s financially impossible for both of you to delay until age 70, the individual whose benefit is higher should delay so that, in the event of one spouse’s death, the survivor’s benefit will be larger.
Consider Shared Housing
An increasing number of people in the United States are retiring alone, which means they bear the burden of paying the rent all by themselves.
This presents a great opportunity to take in other roommates who can contribute to the overall rent and bring down their expenses. Having roommates would also be a great way to ensure you have someone to assist you in an emergency.
Consider Alternative Means of Transportation
It’s no secret that owning a car can be expensive. From maintenance to fuel costs to insurance, it can really put a dent in the wallet. SSDI beneficiaries with limited income should consider alternative means of transportation, such as public transportation or carpooling, to bring down their overall transportation-related costs.
Conclusion
In conclusion, while living alone on SSDI benefits can be a challenge, it is possible to do so for as long as you want if you make sure to budget and keep a close eye on your expenses. Consider working with an SSDI lawyer or advocate to maximize your benefits if you are unsure of how to apply for benefits.
