Getting Disability Income 

The facts about applying for SSDI and SSDI benefits.

If you cannot work due to a disability, you might be eligible for Social Security Disability Income (SSDI). These federal government payments could offer you a degree of financial relief. 

Most SSDI recipients get paid between $700-1,400 per month. This year, the average monthly SSDI benefit for an individual is $1,358. Your monthly benefit could range from $100 to $3,345 based primarily on your earnings history. Roughly speaking, the greater your average annual earnings (in terms of taxable income), the greater your SSDI benefit.

Suppose you have previously spent some time out of the workforce, had jobs in which you did not pay Social Security taxes, or lived in a household receiving other government benefits. In that case, this can also affect SSDI payment amounts.

How do you apply for SSDI? You can apply at the Social Security Administration's website, ssa.gov, or call the SSA at 1-800-772-1213. The SSA has a Disability Starter Kit, downloadable at ssa.gov, to help you get ready for a phone interview or fill out the application so that you have the right documentation in hand when you apply. 

Once you complete and submit your application, it goes to the Disability Determination Office in your state for review. After that, the DDO sends you a letter notifying you whether or not you have qualified for SSDI. (If you fail to qualify, you can appeal the decision in writing within 60 days of getting the letter.)1 

What are your chances of qualifying for SSDI? Typically, it would be best if you met the following criteria. One, you must be currently out of work and unable to participate in what the SSA terms Substantial Gainful Activity – meaning you can't earn something approximating a minimum wage by any means. Two, your disability renders you unable to perform your job or any other type. Three, your disability is expected to last 12 months or longer or eventually result in death. (The criteria for veterans, children, the widowed, and the blind differ slightly.)

If you qualify for SSDI, the money will take time to arrive. The SSA starts your benefit payments once you are determined to have been disabled for six full months. So there is a five-month waiting period that begins the first full month after your qualification date.

The takeaway from this is obvious: there is no point in hesitating to apply for SSDI. You want to apply as soon as you can. 

There are two other important things to note about SSDI. If you qualify for it, you become eligible for Medicare just two years after you are entitled to benefits. Also, SSDI benefits adjust for inflation, so your monthly use is designed to grow larger with time.

This information intends to provide general information on the subjects covered. Readers should not infer specific legal advice regarding eligibility for disability income or criteria for eligibility.

We may be reached at 800-916-9860.

www.wenadvisory.com

This material does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Should You Downsize for Retirement?

Some retirees save a great deal of money by doing so; others do not. 

You want to retire, and you own a large home that is nearly or fully paid off . The kids are gone, but the upkeep costs haven't fallen. Should you retire and keep your home? Or sell your home and retire? Maybe it's time to downsize.

Lower housing expenses could put more cash in your pocket. If your home isn't paid off yet, have you considered how much money is going toward the home loan? When you took out your mortgage, your lender likely wanted your monthly payment to amount to no more than 28% of your total gross income, or no more than 36% of your total monthly debt repayments. Those are pretty standard metrics in the mortgage industry.

What percentage of your gross income are you devoting to your mortgage payments today? Even if your home loan is 15 or 20 years old, you still may be devoting a significant part of your gross income to it. When you move to a smaller home, your mortgage expenses may lessen (or disappear) and your cash flow may greatly increase.

You might even be able to buy a smaller home with cash (if finances permit) and cut your tax liability. Optionally, that smaller home could be in a state or region with lower income taxes and a lower cost of living.

You could capitalize on some home equity.

Why not convert some home equity into retirement income? If you were forced into early retirement by some corporate downsizing, you might have a sudden and pressing need for retirement capital, another reason to sell that home you bought decades ago and head for a smaller one.

The lifestyle reasons to downsize (or not). 

Maybe your home is too much to keep up, or maybe you don't want to climb stairs anymore. Maybe a condo or an over-55 community appeals to you. Maybe you want to be where it seldom snows.

On the other hand, you may want and need the familiarity of your current home and your immediate neighborhood (not to mention the friends close by).

Sometimes retirees underestimate the cost of downsizing.

Even the logistics can be expensive. Just packing up and moving a two-to-three-bedroom home will cost about $1,250 if you are resettling locally. If you are sending it long distance, you can expect the journey to cost around $5,000, if not more. If you can't sell or move everything, the excess may go into storage, and the price tag on that may be around $90 a month. In selling your home, you will probably pay commissions to both your agent and the buyer's agent that add up to 6% of the sale price.

Some people want to retire and then sell their home, but it may be wiser to sell a home and then retire if the real estate market slows. If you sell sooner instead of later, you can always rent until you find a smaller house that could save you thousands (or tens of thousands) of dollars over time.

Run the numbers as accurately as you think you can before you make a move.

Downsizing always seems to have a hidden cost or two, but for many retirees, it can open a door to long-term savings. Other seniors may find it cheaper to age in place.

We may be reached at 800-916-9860.

www.wenadvisory.com

This material does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.