• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The College Investor

Student Loans, Investing, Building Wealth

  • About
  • Podcast
  • Research
  • Contact
  • Save For College
      • How To Start

      • How To Save For College
      • How To Pay For College
      • What Is the Average Cost of College?
      • What Is A 529 Plan and Where to Open One in Your State
      • How Much Should You Have In A 529 Plan By Age
      • How To Use A 529 Plan For Private Elementary And High School
      • What Are Qualified Expenses For A 529 Plan (And What Doesn’t Count)?
      • The Best Brokers To Open A 529 Plan
      • Tools + Accounts

      • 529 Plans: The Ultimate College Savings Plan
      • 529 Plan Contribution Limits
      • Prepaid Tuition Plans | What To Know
      • Understanding And Using 529A ABLE Accounts
      • Using A Roth IRA To Save And Pay For College
      • FAFSA Deadlines for Financial Aid
      • CollegeBacker Review
      • Upromise Review
      • UNest Review
      • Other Options

      • Student Loan And Financial Aid Programs By State
      • The Guide To Military And VA Education Benefits
      • How To Fill Out The FAFSA
      • How To Find College Scholarships
      • The Best College Scholarship Search Websites
      • How To Find Grants To Pay For College
      • Pell Grants: What They Are And How To Qualify
      • Understanding Federal Work-Study
      • How To Use A 529 Plan If Your Child Doesn’t Go To College
  • Student Loans
      • Borrowing

        • How Student Loans Work
        • How To Apply For A Student Loan
        • How To Find The Best Student Loans And Rates
        • Best Private Student Loans Of June 2022
        • Best Student Loans To Pay For Graduate School
        • Best Student Loans To Pay For Medical School
        • Parent Loans To Pay For College
        • No-Cosigner Student Loan Options
        • Guide To Income Sharing Agreements (ISAs)
        • Best International Student Loans
      • Get Out Of Debt

        • Best Places To Refinance Student Loans In June 2022
        • Best Student Loan Repayment Plans
        • Best Student Loan Refinancing Bonuses And Promotional Offers
        • Student Loan Forgiveness Programs (The Complete List)
        • The Full List Of Student Loan Forgiveness Programs By State
        • Public Service Loan Forgiveness (PSLF)
        • Top Student Loan Scams
        • Average Student Loan Monthly Payment
        • Average Student Loan Debt By Year
      • Reviews

        • Credible Review
        • Splash Review
        • Ascent Review
        • Citizens Bank Review
        • Commonbond Review
        • Earnest Review
        • ELFI Review
        • Laurel Road Review
        • LendKey Review
        • SoFi Review
  • Investing
      • How To Start

        • How To Start Investing in High School
        • How To Start Investing In College
        • How To Start Investing In Your Twenties For 22 – 29 Year Olds
        • How To Start Investing In Your 30s For 30 – 39 Year Olds
        • How To Start Investing With $100 Or Less
        • How To Give Kids The Gift Of Stock
        • What Is Dividend Growth Investing
        • IRA Rollover Chart
      • Tools + Accounts

        • Best Online Stock Brokers
        • The Best Traditional And Roth IRA Accounts
        • The Best Robo-Advisors
        • The Best Investing Apps
        • The Best Places to Trade Options
        • The Best Places To Open A Health Savings Account
        • The Best Solo 401k Providers
        • The Best Self-Directed IRA Providers Of 2022
        • Best Cryptocurrency Exchanges
      • Reviews

        • Vanguard Review
        • Fidelity Review 2022: Still One Of The Best Online Brokers
        • M1 Finance Review
        • TD Ameritrade Review
        • Charles Schwab Review
        • Robinhood Review
        • Webull Review
        • Betterment Review
        • Wealthfront Review
  • Earn More Money
      • Extra Income

        • 15 Best Side Hustles You Can Start Earning With In 2022
        • 53 Side Hustle Ideas To Make Extra Money
        • 100 Ways To Make Money In College
        • 80 Ways To Make Money From Home (In Your Pajamas)
        • 5 Quick Money Making Ideas (That Take Less Than 1 Hour)
        • 10 Interesting Ways You Can Make Money Driving
        • High-Paying Side Gigs That Earn $1,000 or More Per Month
        • The 10 Best Money-Making Apps
        • Paid Surveys: Earn Money For Giving Your Opinion Online
        • 10 Crazy Ways To Make $10,000 You’ve Never Heard Of
      • Build Wealth

        • 35 Passive Income Ideas You Can Use To Build Wealth In 2022
        • 3 Ways To Make $50,000 Per Year Without Working With Passive Income
        • How To Become A Real Estate Investor With Just $500
        • 15 Best Online Business Ideas
        • How to Create Streams of Passive Income on a Limited Budget
        • Residual Income: 7 Super Smart Ways to Build It
        • The Most Common Multiple Income Streams
        • How To Become A Real Estate Mogul With Only $10,000
      • Reviews

        • Fundrise Review
        • RealtyMogul Review
        • FarmTogether Review
        • AcreTrader Review
        • Swagbucks Review
        • Survey Junkie Review
        • TopCashback Review
        • DoorDash Review
  • Personal Finance
      • Banking

        • Best High Yield Savings Accounts Of June 2022
        • 10 Best Money Market Accounts Of June 2022
        • 10 Best Free Checking Accounts In June 2022
        • The Best Bank CD Rates Of June 2022
        • 10 Best Business Checking Accounts In June 2022
        • The Best Online Banks Of June 2022
        • 5 Best Credit Unions Nationwide Of June 2022
        • Best College Student Checking Accounts In June 2022
      • Insurance

        • Best Life Insurance Companies
        • Renters Insurance
        • Car Insurance
        • Pet Insurance
        • Umbrella Insurance
        • Disability Insurance
        • Tuition Insurance
        • Travel Insurance
      • Credit Tools

        • Best Budgeting Apps
        • Cash Advance Apps
        • How To Get A Free Credit Score Report
        • The Best Credit Monitoring Services
        • Debt Settlement: Inside The Secret World
        • Credit Repair Explained: Should You Pay For Help?
        • Best Personal Loan Companies And Lenders
        • Online Loan Companies To Borrow From Home
      • Tax

        • Best Tax Software
        • Free Tax Software
        • IRS Tax Refund Calendar
        • Common IRS Questions and Errors
        • Federal Tax Brackets
        • Capital Gains Tax Brackets
        • 401k Contribution Limits
        • IRA Contribution Limits
        • HSA Contribution Limits
  • Forum
  • Search
Home » Money » SS vs. SSI vs. SSDI: What Are The Differences?

SS vs. SSI vs. SSDI: What Are The Differences?

Updated: April 24, 2022 By Robert Farrington

Tweet
Share14
Share
Pin23
Email

At The College Investor, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners. This doesn’t influence our evaluations or reviews. Our opinions are our own. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. TheCollegeInvestor.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The College Investor does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. TheCollegeInvestor.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

SS vs SSI vs SSDI

Social Security (SS), Supplemental Security Income (SSI), and Social Security Disability Benefits (SSDI) are three federal benefit programs that can provide income to Americans who aren't able to work. SS, SSI, and SDI are all are managed by the Social Security Administration.

Each of these programs, however, have different purposes and eligibility requirements. Thankfully, under the CARES Act legislation, most recipients of benefits from each of these three programs are eligible for coronavirus stimulus checks. However, it did lead to a lot of confusion about the programs and what they do.

But how exactly do these programs work? And how do they play into your tax bill? In this article, we’ll look at each one and their impact on your paycheck.

Table of Contents
What is Social Security (SS)?
What Is Supplemental Security Income (SSI)?
What Is Social Security Disability Benefits (SSDI)?
Final Thoughts

What is Social Security (SS)?

The Social Security (SS) tax is part of a group of payroll taxes mandated by FICA (the Federal Insurance Contributions Act). One component is the Social Security tax (or the Old-Age, Survivors, and Disability Insurance) and the other component is the Medicare tax. These FICA taxes fund your retirement and disability benefits.

When people refer to Social Security (or SS), they are typically referring to Social Security retirement benefits.

Related: What Young Investors Should Know About Social Security

How Social Security (SS) Contributions Affect Your Taxes

The Social Security tax rate is 6.2% for the employee and the same for the employer, for a total of 12.4%. If you're self-employed, you have to pay the full 12.4%. For this reason, hiring contractors is an advantage for companies since they don’t have to pay Social Security taxes or even any payroll processing overhead.

The amount paid by the social security tax reduces your taxable income. For example, if you make $100,000, $6,200 is paid in social security taxes, leaving $93,800 to be taxed by federal and state entities. Social Security taxes are applicable to the first $137,700 of wages for 2020 (up from $132.900 in 2019). The $137,700 limit is called the wage base.

The Medicare tax is split the same way — 1.45% paid by the employee and the same for the employer, for a total of 2.9%. This means your combined FICA tax rate is 7.65%. The Social Security portion of these taxes max out at $8,537.40 for 2020. That is up from $8,239.80 in 2019.

How Social Security Benefits Affect Your Taxes

Once you start receiving Social Security benefits, depending on your total income and filing status, those payments may be taxable.

Those filing single with a combined income under $25,000 will not have their SS benefits taxed. Incomes between $25,000 and $34,000 will have benefits taxed at 50%. For incomes over $44,000, benefits will be taxed at 85%.

While not a Social Security tax, the Additional Medicare Tax (AMT) is applicable to those who earn more than $200,000. AMT is taxed at a rate of 0.9%.

Visit the College Investor Tax Center for more tax advice and assistance.

What Is Supplemental Security Income (SSI)?

Supplement Social Security Income (SSI) is not a tax. Instead, it is a disability income paid to those who are eligible for SSI benefits. SSI benefits also are not taxed. In some cases, however, SSI recipients may have to report their SSI income on their tax return.

Supplemental Security Income (SSI) Eligibility Requirements

To be eligible for SSI, you generally must be 65 or older and have a disability. Children are also eligible to receive SSI. SSI is paid monthly through Medicaid. The amount is determined by need (i.e., "means-tested program”).

SSI is intended for those who have low income and very little in assets. Generally, if the Social Security Administration finds that the value of all your personal property and assets exceeds $2,000 for an individual or $3,000 for a couple (not counting your car and home), you won't qualify for SSI.

Supplemental Security Income (SSI) Benefit Limits

SSI amounts vary by person and do have a maximum monthly amount, set by the Social Security Administration. For 2020, those amounts are:

  • $783 for an eligible individual
  • $1,175 for an eligible individual with an eligible spouse
  • $392 for an essential person.

SSI benefits increase in tandem with cost-of-living increases. For 2020, the increase was 1.6%. Some states pay an amount to disabled persons, which is in addition to their federal SSI benefit. 

What Is Social Security Disability Benefits (SSDI)?

Social Security Disability Benefits (SSDI) is another disability program. Many people lump the two together and simply call them Social Security disability benefits. But the main difference between them lies in their eligibility requirements.

Where SSI is needs-based, SSDI eligibility is determined from your work credits. Also, SSI is funded from general fund taxes, while SSDI is funded from the Medicare portion of the Social Security trust fund.

The idea behind SSDI is to provide an income to disabled people who paid in to the Social Security program, but aren't yet old enough to begin receiving their SS benefits. So while SSI requires recipients to 65 years of age or older, SSDI recipients must be under the age of 65.

Recipients of SSDI contribute to the Social Security trust fund while working. Their contributions are in the form of FICA Social Security taxes. Having enough work credits is a requirement for SSDI qualification. 

Due to income restraints, the majority of people who receive SSDI do not pay any federal income tax on the money they receive. And most states don't tax SSDI benefits whatsoever.

What Are Work Credits?

Work credits are based on earnings. In 2020, each $1,410 converts to one work credit. The maximum of credits that you can earn in 2020 is four ($5,640 in earnings). There are two tests that determine how much in SSDI you’ll receive. These are the: 

  • Recent work test, and the
  • Duration of work test

Without straying too far into the weeds, the more years you’ve worked, the more credits you’ll need. But if you haven’t earned enough in work credits to qualify for SSDI, you still might still qualify for SSI.

Final Thoughts

To recap, both Social Security (SS) and SSDI (Social Security Disability Benefits) are funded through FICA taxes and are paid via the Social Security trust fund. You can begin taking your Social Security (SS) retirement benefits at age 62. But if you become disabled before you reach retirement age, you may qualify for SSDI benefits.

SSI is also a disability benefit. But with Supplemental Security Income (SSI), you'll need to demonstrate financial need to qualify and you'll typically need be at least 65 years of age or older. Each of these programs can help relieve your financial burden when you can't work. But your maximum benefits will also be limited by your need or how much you've paid in. 

To further protect your income during a short or long period of disability, you may want to consider shopping for disability insurance policy from a site like Policygenius or Breeze. You can also check out our complete guide to disability insurance.

And with the instability of government programs, you should open a retirement account and save and invest as if you'll need to fully fund your retirement yourself. If you do end up receiving Social Security benefits, it will be "extra" money that you can use however you wish. Read our full guide to saving for retirement.

Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

SS vs. SSI vs. SSDI: What Are The Differences?
Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
Subscribe
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
0 Comments
Inline Feedbacks
View all comments

Primary Sidebar

Robert Farrington will teach you how to get out of student loan debt and how to start investing.

Hi! My Name is

America's Millennial Money Expert

Welcome to The College Investor. We're here to help you escape student loan debt so you can start investing and building wealth for the future

Our expert guides, reviews, and more are designed to help you achieve your financial goals.

Want to learn more? See what's in my wallet.

As Featured In

Social Media

Popular Posts

Side Hustling

53 Side Hustle Ideas To Make Extra Money

Best Side Hustles

15 Best Side Hustles You Can Start Earning With In 2022

Make Money From Home

80 Ways To Make Money From Home (In Your Pajamas)

Crazy Ways To Make $10,000

10 Crazy Ways To Make $10,000 You’ve Never Heard Of

Make $50,000 Per Year

3 Ways To Make $50,000 Per Year Without Working With Passive Income

Student Loan Scams

Top Student Loan Scams

Net Worth of Millennials

Average Net Worth Of Millennials By Age

Ways To Get Student Loan Forgiveness

Student Loan Forgiveness Programs (The Complete List)

Passive Income Ideas

35 Passive Income Ideas You Can Use To Build Wealth In 2022

529 Plan By Age

How Much Should You Have In A 529 Plan By Age

Ultimate Guides

529 Plan Guide

529 Plans: The Ultimate Guide To College Savings Plans

Student Loans and Financial Aid By State

Student Loan And Financial Aid Programs By State

Student Loan Advice

The Definitive Guide To Student Loan Debt: Everything To Know About Your Loans

Student Loan Forgiveness By State

The Full List Of Student Loan Forgiveness Programs By State

newretirement

How to Start Saving Now: The College Graduate’s Guide to Saving for Retirement

Latest Research

Institutional Merit Grants

Who Gets Institutional Merit Grants At Private Colleges?

Resume Student Loan Payments

Survey: Even With Higher Expenses, Most Student Loan Borrowers Are Ready To Resume Payments

Support From Parents Survey

64% Of Millennials Receive Support From Their Parents

undermatching at selective colleges

Undermatching: Why Do Smart Low-Income Students Not Enroll In Selective Colleges?

How Much Americans Pay To File Their Taxes

How Much Americans Pay To File Their Taxes

Footer

Who We Are

The College Investor is an independent, advertising-supported publisher of financial content, including news, product reviews, and comparisons.

Connect

  • Contact Us
  • Advertise
  • Press & Media

About

  • About
  • Our Team
  • Podcast
  • Editorial Guidelines
  • How We Make Money
  • Archives

Social

Copyright © 2022 · The College Investor · Privacy Policy ·Terms of Service · DO NOT Sell My Personal Information

wpDiscuz