Retirement income affects SSI because it counts as unearned income. Understanding how different retirement sources impact your SSI helps you plan accordingly.
In this article, we'll cover:
- Social Security retirement and SSI
- Pensions and SSI
- Retirement accounts
- Planning for transitions
1. Social Security Retirement and SSI
How it works:
- You can receive both SSI and Social Security retirement
- Social Security counts as unearned income
- Reduces your SSI payment
- Combined amount is what you receive
The calculation:
- Your Social Security amount
- Minus $20 general income exclusion
- Remainder reduces SSI dollar-for-dollar
Example:
- Social Security retirement: $600/month
- Minus $20 exclusion = $580
- SSI maximum: $967
- SSI payment: $967 - $580 = $387
- Total income: $600 + $387 = $987
Why this happens:
- SSI supplements income to FBR
- Social Security is income
- SSI fills the gap
- Total roughly equals FBR
2. Pensions and SSI
Pension income:
- Counts as unearned income
- Reduces SSI dollar-for-dollar (after $20)
- Any pension type
- Private or government
Same calculation:
- Pension amount
- Minus $20 (if available)
- Reduces SSI
Multiple income sources:
- Only one $20 exclusion total
- Not $20 per source
- Combined income affects SSI
- Calculate total impact
Example with pension and Social Security:
- Social Security: $400
- Pension: $300
- Total: $700
- Minus $20 = $680 counted
- SSI reduced by $680
Important: The $20 exclusion only applies once, not separately to each income source.
3. Retirement Accounts
Retirement account balances:
- IRAs, 401(k)s may count as resources
- Depends on accessibility
- If you can withdraw: Counts
- SSI rules apply
Distributions:
- When you take money out
- Counts as unearned income
- Affects SSI that month
- Then balance is resource
Inaccessible funds:
- Can't withdraw without penalty?
- May not count as resource
- Complex rules
- Verify with SSA
RMDs (Required Minimum Distributions):
- Must take at certain ages
- Counts as income
- Reduces SSI
- Plan accordingly
4. Planning for Transitions
From SSDI to retirement:
- SSDI converts to retirement at FRA
- Same amount usually
- SSI interaction stays same
- No change in SSI calculation
Reaching retirement age:
- May want to start Social Security
- How much will it be?
- How will it affect SSI?
- Calculate before deciding
Delaying retirement benefits:
- Waiting increases Social Security
- But SSI continues without it
- Higher eventual Social Security
- Less SSI supplement needed later
Making decisions:
- Calculate SSI impact
- Consider healthcare (Medicare vs. Medicaid)
- Think long-term
- Get benefits counseling
Age 65 and SSI
At age 65:
- Can receive SSI "aged" (not just disabled)
- Same rules apply
- Retirement income still counts
- Resources still limited
Medicare and Medicaid:
- Medicare starts at 65
- SSI may provide Medicaid too
- Coverage considerations
- Understand both programs
Maximizing Combined Benefits
Strategies:
- Understand all income sources
- Know how each affects SSI
- Time retirement decisions
- Use ABLE accounts if possible
What helps:
- Lower countable income = more SSI
- Excluded resources don't count
- ABLE accounts excluded (first $100,000)
- Home and car excluded
How Purple Helps
- Track all benefit deposits
- See retirement and SSI together
- Monitor total income
- Manage resource limits
- Clear financial picture