Can You Have a Savings Account on Social Security?

Social Security offers various benefit programs, including support for retirement, disability, and the loss of a family member. This article clarifies how savings accounts interact with these benefits.

Savings Accounts and Earned Social Security Benefits

Retirement, Social Security Disability Insurance (SSDI), and survivor benefits are considered “earned” Social Security benefits. Eligibility for these programs is based on an individual’s work history and the Social Security taxes paid. These benefits are funded through payroll taxes, reflecting a system where contributions during working years establish eligibility for future benefits.

These earned benefits are not means-tested. This means savings or other assets do not affect eligibility or benefit amount. Recipients can maintain savings accounts of any size and receive payments via direct deposit. The Social Security Administration (SSA) does not impose asset limits for these benefits.

Savings Accounts and Supplemental Security Income Eligibility

Supplemental Security Income (SSI) is a distinct program administered by the Social Security Administration (SSA). It provides financial assistance to individuals who are aged, blind, or disabled and have limited income and resources. Unlike earned Social Security benefits, SSI is a needs-based program, meaning an individual’s financial situation, including savings, directly affects eligibility.

For SSI eligibility, there are specific resource limits that applicants must not exceed. The countable resource limit is $2,000 for an individual and $3,000 for a couple. Funds held in savings accounts are considered countable assets for SSI purposes. If an individual’s or couple’s combined countable resources, including savings account balances, exceed these limits, benefits may be denied or suspended.

Assets Not Counted for Supplemental Security Income

While savings accounts generally count towards SSI resource limits, certain assets are specifically excluded from these calculations. Understanding these exclusions is important for individuals managing their finances while receiving or applying for SSI. These exclusions allow beneficiaries to own certain property without it affecting their eligibility.

Commonly excluded assets include the home an individual lives in, regardless of its value, and one vehicle used for transportation. Household goods and personal effects are also typically not counted. Additionally, funds held in certain specialized accounts, such as Achieving a Better Life Experience (ABLE) accounts, are generally excluded up to a specific limit. ABLE accounts are tax-advantaged savings accounts designed to allow individuals with disabilities to save money for qualified disability expenses without jeopardizing their eligibility for needs-based government benefits like SSI. Up to $100,000 in an ABLE account is disregarded for SSI resource purposes, though any amount above this threshold may be counted.

Reporting Changes for Supplemental Security Income

Individuals receiving Supplemental Security Income (SSI) have a responsibility to report any changes in their financial situation to the Social Security Administration (SSA). This includes increases in savings account balances or any other changes in resources. Accurate and timely reporting ensures that benefit payments are correctly calculated and that recipients remain eligible.

Changes should be reported to the SSA promptly, typically within 10 days following the end of the month in which the change occurred. This can be done through various methods, including online portals, by phone, or in person at a local Social Security office. Failure to report changes accurately and on time can lead to serious consequences, such as benefit overpayments that must be repaid, financial penalties, or even the temporary suspension or loss of SSI benefits. The SSA may reduce future benefit payments to recover overpayments, and sanctions can range from $25 to $100 per violation, or even result in benefit suspension for several months.