Chicago, IL asked in Public Benefits, Social Security and Estate Planning for Illinois

Q: I want to try a credit union no penalty CD but not sure if my SSI would be cut if I tried that out

I'm trying to find alternatives to my current 529 savings account. I want something tax free, but where I can take out I'm emergencies. I don't want to lose my SSI.

1 Lawyer Answer
Susan Michele Schaefer
Susan Michele Schaefer
Answered
  • Estate Planning Lawyer
  • Prattville, AL

A: It is great that you are looking for alternatives for savings that will not affect your SSI payments. A primary consideration is whether the alternative would be a countable resource or not. A CD is usually countable except when the terms of a timed deposit will prohibit early withdrawal altogether, but even in that case it may affect countable resources when the CD matures. See POMS SI 01140.210 Time Deposits at https://secure.ssa.gov/poms.nsf/lnx/0501140210.

If you are receiving SSI based on a disability that began before age 26, consider placing funds in an Achieving a Better Life Experience (ABLE) account. An ABLE account is a tax-free saving account to cover qualified disability expenses. Social Security disregards the first $100,000 in an ABLE account so that amount is not considered to be a countable resource. For more information go to https://www.ssa.gov/ssi/spotlights/spot-able.html?tl=1%2C2%2C5%2C14.

You may also want to consider an irrevocable Special Needs Trust which is generally not a countable resource. For general information, see https://www.ssa.gov/ssi/spotlights/spot-trusts.htm. Consult an attorney about whether establishing a Special Needs Trust is right for you.

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