The new year is just around the corner, and many of us are busy planning and setting goals for 2016. You may have heard that there will be some changes with your Social Security Disability Insurance. This is true. Unless Congress acts to change things, SSDI benefits will be cut significantly in late 2016. Knowing just what these changes could entail is a crucial step in preparing for the new year. For those currently receiving SSDI, it is important to know how the cuts will affect your benefits. And since we never know when disability or injury could strike, it is important for all of us, even those who are perfectly healthy, to be prepared and knowledgeable.
What Exactly is Going to Happen?
SSDI is funded in two ways: through tax revenue and a government trust fund. This trust fund, if nothing is done to replenish it, will run out of money by the last quarter of 2016. If this happens, people who have SSDI will face a 19% decrease in benefits. So, SSDI will not disappear entirely, but the loss of hundreds of dollars of benefits is significant and should catch the attention of those it could effect.
Funding issues are not foreign to the federal government, and it is possible that a solution will be found before these cuts are necessary. However, the gridlock in Congress has only intensified in recent years, so it would be wise to prepare. Here are some ways that you can prepare for possible changes to your SSDI benefits in 2016:
Take a Look at Your Finances
- Adjusting your budget now could go a long way in reducing the impact of future cuts in benefits. Whether it’s cutting expenses or setting money aside to shore up losses later in the year, fiscal responsibility should be a priority. If you have funds in savings accounts or investments, it may be a good idea to withdraw some of those to lessen the blow if no resolution is reached at the Capitol.
- Consider beginning an ABLE account if you qualify, or begin to utilize it if you already have one. These tax-free savings accounts are intended specifically for those with disabilities. You can learn more about these accounts and how they could help you by following this link.
Explore the Possibility of Work
- If your disability is such that employment may still be a possibility, it could be a good idea to begin looking at opportunities for work. You may think this could put you at risk of losing your benefits altogether, but the Social Security Administration allows “trial work periods” for you to test the waters.
- These trial work periods allow you to continue your benefits while working and collecting a salary. They can last up to three years depending on how much you earn. You can find more information on this possibility in one of our earlier posts.
Make Your Voice Heard
- These changes affect you and over 11 million other Americans. This is not just an issue of taxes and trust funds, it is an issue of protection and rights for disabled people who make a valuable contribution to society. Embrace your role in the democratic process and write your representatives about this problem. It will likely be a major talking point in the upcoming presidential election, and the earlier it is brought up, the better.
The new year is a fun and exciting time, but it can also pose some serious questions about how to best prepare for change. The issue of SSDI is a perfect example of this. No matter what happens in Congress in the near future, some things about your benefits will probably change. And in the worst-case scenario, a significant portion of them will be gone. You should remain confident that a solution will be found, but also prepare for cuts. Over-preparing will only be to your benefit while under-preparing could be very dangerous.
Source: USA Today