Social Security runs programs that support retirees, the blind and the disabled with monthly benefits. The goal is to provide support and a decent standard of living to those who have paid in to the system through payroll taxes and their families. While drawing Social Security, beneficiaries may continue to work, earn income and invest their savings, with a few restrictions.
Someone receiving Social Security benefits can freely invest in stocks, although there are some program limits for SSI to be aware of.
Social Security Retirement Benefits
If you are drawing Social Security retirement benefits, you are free to work and earn money, or invest your savings in the stock market. Social Security places no restriction on the amount of money you can earn, or on the size of your retirement nest egg. Keep in mind Social Security's full retirement age – from 65 to 67, depending on the year of your birth.
Social Security does, however, limit benefits for people who take early retirement still earn money from employment. According to the latest rules released by the IRS, Social Security benefits will be reduced 5/9ths of 1% for each month that it is withdrawn before full retirement is reached. The agency does not count investment earnings in this calculation, however.
Social Security Disability.
The Social Security disability program assists people who suffer a debilitating illness or injury and are unable to work. For disability applicants, Social Security disqualifies anyone earning more than the "substantial gainful activity" amount, which in 2019 stood at $1,220 a month before taxes. Income from investments is "unearned" and not counted; applicants can freely invest their savings in stocks, earn dividends and realize capital gains (or losses). Personal resources such as cash and stocks do not affect eligibility.
Eligibility for SSI
The Supplemental Security Income program is means-tested – Social Security limits the income and the resources of SSI beneficiaries. The federal benefit rate determines the monthly income ceiling. In 2019, this rate stood at $1,820 per month. Stock investments count as resources, which also include cash in savings accounts, pension plans and assets such as jewelry or second homes. The resource limit is $2,000 for singles and $3,000 for married couples. If at any time your "countable" resources (including stock investments) exceed the limit, you will no longer be eligible for SSI.
Social Security Reporting Requirements
If you've already been accepted into the SSI program, Social Security requires you to report if your stocks, along with other resources, exceed the program limits. Your benefits immediately stop. If the agency makes an overpayment due to excess resources, it will ask for repayment within 30 days. If you are unable to return the overpayment, Social Security will propose withholding part of your income until the repayment is complete.
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