Can you own stocks while on disability?

Can you own stocks while on disability?

Asking "can you own stocks while on disability" is common and important for anyone who receives U.S. disability benefits and wants to manage savings or invest. This guide explains the practical rules and differences for Social Security Disability Insurance (SSDI) versus Supplemental Security Income (SSI), how earned and unearned income are treated, what investment vehicles count as resources, protections like ABLE accounts and special needs trusts, and clear steps you can take to stay compliant and protect benefits.

As of 2026-01-21, according to Social Security Administration (SSA) guidance and ABLE National Resource Center materials, the SSI resource limits remain strict for cash and many investments, while SSDI is primarily concerned with work activity and Substantial Gainful Activity (SGA). The SSA publishes detailed rules on resources, income, and reporting requirements.

Background — U.S. disability programs and why the distinction matters

There are two main federal programs people refer to when they say "disability benefits": SSDI and SSI. They serve different populations and use different tests.

• SSDI (Social Security Disability Insurance) is work‑based and functions like an insurance benefit. You qualify by having sufficient work credits and paying Social Security taxes. SSDI eligibility and benefit amounts are tied to your prior earnings record. Because SSDI is insurance‑style, it generally does not impose an assets or resource limit.

• SSI (Supplemental Security Income) is needs‑based and is administered to people with limited income and resources. SSI has strict resource (asset) and income rules; the federal resource limit is $2,000 for an individual and $3,000 for a couple in most cases. Many investments and cash counts toward these limits.

Why this distinction matters: if you receive SSDI, owning stocks typically will not make you ineligible for benefits by itself. If you receive SSI, owning stocks can easily push you over resource limits and affect eligibility and monthly payments.

Key terms used later:

• Earned income: wages from work or net earnings from self‑employment.
• Unearned income: dividends, interest, capital gains, rental income, pensions, and other non‑work income.
• Countable resources: assets the SSA counts toward SSI resource limits.
• Substantial Gainful Activity (SGA): a measure of work activity used for SSDI eligibility—income from work above the SGA threshold can indicate you are able to work and may jeopardize SSDI eligibility.

Basic rules about investments and “earned” vs “unearned” income

SSA separates income into earned and unearned because they affect benefits differently.

• Earned income: pay from an employer, net self‑employment income, and certain in‑kind wages. For SSDI, earned income is important because work at or above SGA levels can stop benefits. For SSI, earned income does reduce the monthly payment but is subject to specific exclusions and partial disregards.

• Unearned income: dividends, interest, capital gains, certain annuities, Social Security benefits, and gifts. Unearned income usually reduces SSI payments dollar‑for‑dollar after applicable exclusions, and may be counted as monthly income. For SSDI, passive investment income typically does not count toward the SGA test, but income may need to be reported for tax and other program interactions.

Important: realized capital gains (when you sell an investment for a profit) and dividends are typically treated as unearned income for SSI and may also be considered countable resources if held in accounts at the beginning of the month.

Owning stocks while receiving SSDI

If you are on SSDI, the short practical rule is: owning stocks generally will not disqualify you from SSDI. SSDI eligibility centers on whether you can engage in Substantial Gainful Activity (SGA) — a work‑related threshold — not your asset level.

• Ownership: Holding stocks or a taxable brokerage account is normally allowed on SSDI without affecting eligibility.
• Passive income: Dividends or capital gains are unearned and usually do not count as work income for SGA. They will not typically cause SSDI to end, though you must report changes in income and resources as required.
• Reporting obligations: SSDI beneficiaries must report work activity and certain changes (for example, starting work, self‑employment, or receiving workers’ compensation). While investment income is not the focus of SGA, you should still report changes per SSA rules to avoid overpayments.
• Interactions with employer disability plans or state benefits: Investment income may affect other programs you receive alongside SSDI (see “Impact on other means‑tested programs”).

Work incentives and reporting for SSDI recipients

SSA provides several work incentive rules that allow SSDI recipients to try working without immediately losing benefits. Key elements:

• Trial Work Period (TWP): Allows SSDI beneficiaries to test work for a set number of months while still receiving full benefits, regardless of earnings, as long as trial work activity rules are met.
• Extended Period of Eligibility (EPE): After TWP ends, there is a period during which benefits continue for months when earnings are below SGA.
• Substantial Gainful Activity (SGA): If you earn above the SGA threshold in a given month, SSA may determine you are engaging in SGA and stop benefits.

Always report work activity and wages to SSA. Failure to report can result in overpayments that must be repaid.

Owning stocks while receiving SSI

For SSI recipients, the rules are stricter. SSI is means‑tested and limited by both income and resources.

• Resource limits: The federal SSI resource limit is $2,000 for an individual and $3,000 for a couple in most cases. Stocks, bonds, brokerage cash, and many investment accounts are countable resources.
• Countable assets: If the value of your stocks and other countable resources exceeds the SSI limit, you will generally be ineligible for SSI until your resources fall below the limit.
• Income effects: Dividends and realized capital gains can be treated as unearned income and may reduce monthly SSI payments.
• Timing: SSA looks at resources as of the first day of the month for SSI eligibility. For example, if you have more than $2,000 on the first of the month, you will not be eligible for that month.

Because of these rules, many people on SSI cannot hold sizable taxable investment accounts in their own name without risking benefits. Proper planning and use of special accounts or legal structures (ABLE accounts, special needs trusts) can mitigate this issue.

What counts and what does not for SSI

Typical countable resources:

• Cash, checking and savings account balances.
• Stocks, bonds, mutual funds, and brokerage account cash and securities.
• Certain retirement accounts if accessible (see next section).
• Property or other assets that can be converted to cash.

Common exclusions (not countable or treated specially):

• Primary residence: The home you live in is generally excluded.
• One vehicle: Often excluded if used for transportation.
• Burial spaces and certain burial funds up to specified limits.
• ABLE accounts: Balances up to program limits may be excluded for SSI (see ABLE section).
• Certain trust arrangements: Properly drafted special needs trusts and some pooled trusts may not count as resources if they meet strict legal requirements.

Note: Rules are detailed and have exceptions. For example, some retirement accounts may be excluded until funds are accessible; once funds are reachable and can be withdrawn, they may count.

ABLE accounts and other benefit‑protecting tools

Achieving a Better Life Experience (ABLE) accounts let eligible people with disabilities save and invest money for disability‑related expenses without jeopardizing SSI and Medicaid up to certain limits.

• Eligibility: To open an ABLE account, the disability must have begun before age 26 (this age threshold can vary if state programs adopt later rules); the beneficiary must meet program eligibility criteria.
• Resource exclusion: ABLE account balances are excluded from SSI resource counting up to $100,000 for Federal SSI purposes per current SSA guidance—balances above that threshold may affect SSI eligibility. (Program limits and rules can be updated; always check current state ABLE rules.)
• Investment options: ABLE accounts typically offer several investment portfolios (conservative to aggressive) and may include cash, money market, and market‑based options. Earnings grow tax‑deferred for qualified disability expenses.
• Use of funds: Distributions must be for qualified disability expenses (housing, education, transportation, health, etc.). Non‑qualified distributions may have tax consequences and potential Medicaid payback rules on death.

ABLE accounts are often a good option for SSI recipients who need to save while preserving benefits. You can open an ABLE account in your state or in another state’s program if it accepts out‑of‑state residents.

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Special needs trusts, pooled trusts, and other legal strategies

Special needs planning often uses trusts to hold assets for the benefit of a person with disabilities while preserving eligibility for means‑tested benefits.

• First‑party special needs trusts (d(4)(A) trusts): Funded with the beneficiary’s own assets (including settlements). These trusts have strict setup and timing rules and typically require a payback provision for Medicaid upon the beneficiary’s death.
• Third‑party special needs trusts: Funded by someone other than the beneficiary (family, friends). Because the assets never legally belonged to the beneficiary, they do not count as resources for SSI/Medicaid if properly drafted.
• Pooled trusts: Managed by nonprofit organizations that pool and invest funds for many beneficiaries while maintaining separate accounts for distribution purposes. Pooled trusts can accept first‑party funds in many states and may avoid the strict payback rules applied to individual first‑party trusts.

Caution: Trust rules are technical. An improperly drafted trust can cause loss of benefits and unexpected tax or legal consequences. Always consult a disability‑aware attorney experienced in special needs planning when using trusts.

Types of investment accounts and their typical treatment

How an investment account is treated depends on its type and how accessible its funds are.

• Taxable brokerage accounts: Countable resources for SSI if owned by the beneficiary. Dividends and realized gains are unearned income and may reduce SSI. For SSDI, ownership normally does not affect benefits but unearned income should be reported where required.
• Joint accounts: The SSA may consider the ownership share attributable to the SSI applicant. Joint accounts with spouses may be partially exempt, but joint ownership with third parties can create complications and possible countable resource determinations.
• Custodial accounts (UTMA/UGMA): Funds owned by a minor or held in custodial form may be countable resources for the child’s SSI eligibility. When the child reaches majority, assets usually transfer to the child and can affect SSI.
• Employer retirement plans (401(k), 403(b)): These accounts often are not counted while the funds are not accessible. However, if you can access distributions, accessible funds can count as resources or income. Contributions usually require earned income.
• IRAs and Roth IRAs: While funds remain in IRAs and are not accessible, SSA may treat them differently, but once owner‑accessible (RMDs, withdrawals), funds may be countable or treated as income. Contribution rules require earned income for IRA contributions.
• ABLE accounts: Generally excluded up to program limits for SSI and can be invested within ABLE program options.

The accessibility and control over funds typically determine whether an account counts as a resource for SSI.

Taxation and reporting considerations

Investment income has tax consequences and can interact with disability benefits.

• Tax treatment: Dividends and capital gains are taxable on your federal (and possibly state) tax return. Qualified dividends and long‑term capital gains may be taxed at preferential rates. Taxation is independent from benefit eligibility, but tax refunds or other tax events can affect SSI if not managed carefully.
• Reporting to SSA: For SSI, report unearned income (dividends, capital gains, gifts) promptly as required. For SSDI, report changes in employment and other required items; while passive investment income typically won’t affect SSDI eligibility, it can affect other programs.
• Tax refunds: Large tax refunds can temporarily increase countable resources if received in a month and held in accounts. Consider timing and how funds are held to avoid surprise resource overages for SSI.

Keep precise tax records for dividends, realized gains, and other investment transactions and coordinate with a tax preparer familiar with disability benefit interactions.

Impact on other means‑tested programs (Medicaid, SNAP, housing)

Investment assets and unearned income may affect eligibility for other means‑tested programs:

• Medicaid: Many people receive Medicaid through SSI eligibility. Losing SSI because of resources may also result in loss of Medicaid coverage.
• SNAP and housing assistance: Programs like SNAP (food stamps) and federal housing often consider income and assets; changes in investment income or resources can affect eligibility or benefit levels.

Because of these cross‑program effects, preserving SSI often preserves access to multiple supports. When planning investments, consider the combined effect on all benefits you receive.

Practical guidance and best practices

Actionable steps to manage investments while on disability:

1. Keep clear records: Track brokerage statements, dividend payments, and transaction dates. SSA and other agencies may request verification.
2. Report changes promptly: For SSI and SSDI, follow SSA reporting rules. Prompt reporting avoids overpayments and penalties.
3. Consider ABLE accounts: If eligible, move funds you need for disability‑related expenses into ABLE accounts (within program limits) to protect them from SSI resource counting.
4. Use special needs trusts when appropriate: Speak to an attorney about first‑party or third‑party special needs trusts to protect larger assets.
5. Be careful with joint accounts and gifts: Joint ownership and recent gifts can be scrutinized and may count as resources.
6. Avoid risky trading intended to produce earned‑like income: Aggressive trading to simulate earned income can create complex tax and benefit issues; consult professionals first.
7. Consult professionals: Talk to a benefits attorney and a financial planner experienced with disability law to design a plan that meets your goals and preserves eligibility.
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Examples and common scenarios

Example 1 — SSDI recipient with investments:

• Scenario: An SSDI beneficiary holds a $50,000 taxable brokerage account and receives modest dividends.
• Likely outcome: SSDI is generally not affected by ownership of the account. Dividends are unearned income and, while reportable for tax purposes, usually do not count for SGA. The beneficiary should report income and maintain records.

Example 2 — SSI recipient over the resource limit:

• Scenario: An SSI recipient has $3,500 in stocks and cash in a brokerage account.
• Likely outcome: The $3,500 exceeds the $2,000 individual SSI resource limit; the person will likely be ineligible for SSI until the countable resources fall below the limit.
• Options: Transfer funds into an ABLE account (if eligible), place funds into a properly drafted third‑party special needs trust, or spend down on exempt items, after consulting counsel.

Example 3 — Using ABLE to protect funds:

• Scenario: An SSI recipient who is ABLE‑eligible deposits $10,000 into an ABLE account.
• Likely outcome: Up to program limits (e.g., balances below $100,000), the funds are excluded from SSI resource counting, preserving monthly benefits while allowing investment growth and tax advantages for qualified expenses.

Frequently asked questions (FAQ)

Q: "Can I buy stocks while on SSDI?" A: Yes. For most SSDI beneficiaries, owning stocks does not by itself affect SSDI eligibility. Keep records and report required changes to SSA.

Q: "Will dividends or capital gains make me lose SSDI?" A: Usually not. Unearned investment income typically does not count toward the SGA test for SSDI, but you must report income where required and consider tax consequences and interactions with other benefits.

Q: "Will dividends or capital gains make me lose SSI?" A: Possibly. Dividends and realized gains are unearned income and, if held as assets on the first of the month, may count as resources. If total countable resources exceed $2,000 for an individual, SSI eligibility is at risk.

Q: "Can I put money into a 401(k) or IRA while on disability?" A: Contributions to a 401(k) depend on your employer plan and on having earned income. IRAs require earned income to contribute. For SSI, retirement accounts may be counted differently depending on accessibility; consult an advisor.

Q: "Are ABLE accounts right for me?" A: ABLE accounts are often a strong option for SSI recipients who qualify and want to save for disability‑related expenses without losing benefits. Check state program rules and contribution/limit specifics.

Q: "If I sell stocks and receive cash, how does that affect SSI?" A: If sale proceeds increase your countable resources above the SSI limit on the first of the month, you may lose eligibility for that month. Use planning (ABLE, trusts, spending on exempt items) to avoid unintended loss.

Risks, pitfalls, and red flags

Common mistakes to avoid:

• Failing to report income or changes in resources to SSA promptly, which may lead to overpayments and repayment obligations.
• Putting assets into improperly drafted trusts that do not meet SSA or Medicaid rules—this can cost benefits and trigger recovery claims.
• Misunderstanding joint accounts: SSA may attribute portions of joint accounts to the SSI applicant.
• Assuming all unearned income is irrelevant: For SSI, unearned income and countable resources matter a great deal.

Consequences of mistakes can include overpayments, loss of benefits, and legal or tax problems. Use qualified advisors experienced with disability law.

Where to get help — agencies and professional advisors

Who to contact:

• Social Security Administration (SSA): Contact your local SSA office or 1‑800‑772‑1213 for official guidance and to report changes.
• Disability/benefits attorneys: Specialists in special needs planning and disability law can draft trusts and advise on complex situations.
• Financial planners experienced with disability planning: They can help structure investments, ABLE accounts, and retirement considerations.
• ABLE National Resource Center and your state ABLE program: For up‑to‑date rules, program limits, and enrollment guidance.

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References and further reading

As of 2026-01-21, core authoritative sources for the rules and figures mentioned include:

• Social Security Administration (SSA) publications: Official policy on SSI resources, SSDI work rules, SGA, and reporting requirements. (Policy focus, eligibility details.)
• ABLE National Resource Center: Guidance on ABLE account limits, qualified expenses, and state program details. (How‑to and enrollment information.)
• SSA fact sheets on SSI resource limits and treatment of income and resources: Practical examples and definitions. (Detailed administrative interpretation.)
• Law firm guides on special needs trusts and pooled trusts: Practical legal considerations and drafting requirements. (Legal application and cautionary notes.)
• Financial planning materials on interactions between investments and means‑tested public benefits: Practical planning strategies and pitfalls. (Practical how‑to.)

These references provide policy, legal interpretation, and implementation examples. Always confirm current figures and rules directly with SSA, your state ABLE program, or a qualified attorney, since program details and thresholds can change.

Further steps to take now

If you are asking "can you own stocks while on disability" and are considering investments:

• Review whether you receive SSDI or SSI—this is the primary determinant of how investments affect you.
• Keep accurate records and report changes to SSA promptly.
• If you are on SSI and want to save, investigate ABLE accounts or consult a special needs attorney about trusts.
• Use trusted custody and trading platforms. For digital asset needs, Bitget and Bitget Wallet provide secure services to help manage crypto alongside traditional investment strategies.

If you want personalized help, reach out to SSA or a qualified professional experienced in disability benefits and financial planning.

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