Strategic Decision-Making: How to Choose the Best Path for You

For many seniors, the most important SSI strategy revolves around how it interacts with their regular Social Security benefits. A common misconception is that you can receive one or the other, but not both. In reality, many people receive both. This is known as receiving “concurrent” benefits.

This often happens when a person’s Social Security retirement or disability benefit is very low. SSI can then step in to supplement that payment, bringing the person’s total monthly income up to a minimum level set by the federal government, known as the Federal Benefit Rate (FBR).

Let’s walk through a strategic example to see how this works in practice. We’ll use hypothetical but realistic numbers for clarity.

Scenario: Mary’s Low Social Security Benefit

Mary is 67 years old and lives alone. She worked part-time for most of her life in low-wage jobs, so her Social Security retirement benefit is small, only $500 per month. She has no other income and her savings in the bank are $1,500, which is below the $2,000 resource limit.

Strategy 1: Relying on Social Security Alone

If Mary only considers her Social Security, her financial situation is dire. Her monthly income is $500. She struggles to pay for rent, food, and utilities. She believes this is her only option because she is, after all, receiving a “Social Security check.”

Strategy 2: The SSI Supplement Strategy

A knowledgeable planner would immediately identify Mary as a potential candidate for SSI. Here’s how the strategic calculation works. First, we need the Federal Benefit Rate. Let’s assume for this year the FBR for an individual is $943 per month. This is the income floor SSI aims to provide.

Next, the SSA applies an income-counting rule. They have a rule called the “$20 General Income Exclusion.” This means they ignore the first $20 of most unearned income. For Mary, her unearned income is her $500 Social Security check.

Here is the step-by-step calculation:

1. Start with the Federal Benefit Rate (FBR): $943

2. Subtract Mary’s countable income. Her total Social Security is $500, but the SSA disregards the first $20. So, her countable income is $500 – $20 = $480.

3. The SSI payment is the difference: $943 (FBR) – $480 (Countable Income) = $463.

Under this strategy, Mary would receive her original $500 Social Security check plus a separate $463 SSI payment. Her total monthly income would be $963. By understanding how these two government benefits interact, Mary nearly doubles her monthly income, moving from deep poverty to a more stable, albeit modest, financial footing.

This is the essence of SSI strategy: it’s not about replacing Social Security, but about understanding when it can be used as a powerful supplement to create a more secure financial foundation.