In short
This NerdWallet Smart Money episode centers on the “One Big Beautiful Bill Act” (a nearly 900-page budget bill) and how it could change household finances, plus a listener question about saving while on disability.
Guests
Anna Helhosky (NerdWallet news colleague covering the bill’s tax, clean energy, and social safety net impacts) and Kate Ashford (personal finance nerd answering disability/saving questions). Hosts are Elizabeth Ayola and Sean Piles.
Key claims
The bill makes 2017 tax cuts permanent and doubles the standard deduction; it raises the SALT cap to $40,000 for 2025 then reverts to $10,000 in 2029. Clean energy credits end: EV credit ends Sept 30, 2025; home solar and energy-efficient home improvement credits end after 2025. Social safety net rollbacks include Medicaid work requirements (with 80 hours/month reporting), SNAP tightening and work requirements, ACA marketplace premium increases (25%–100%) and 4.2M more uninsured by 2034, plus CFPB funding cut in half. Student loan changes: income-driven plans sunset July 1, 2028; new RAP begins July 1, 2026 with $10 minimum payments and 30-year forgiveness; graduate/Parent PLUS borrowing caps start July 1, 2026.
Notable examples
SALT cap timing (temporary $40k, then $10k); tipped income deduction up to $25,000 and overtime deduction up to $12,500 (available 2025–2028); Medicaid work requirement history in Arkansas (coverage loss for ~18,000 people). Disability segment examples: SSDI vs SSI; SSDI savings accounts have no limit, but work earnings can reduce benefits; work expenses (e.g., disability-related equipment, prescription copays) may be deductible; starting a nonprofit is possible but SSA may evaluate whether it’s “substantial work” relative to salary.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOWeekly Money News Roundup
0:06 to 1:19
The hosts discuss the recent federal budget bill and its implications.
“As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.”
Weekly Money News Roundup
2:29 to 3:40
The hosts discuss the recent federal budget bill and its implications.
“In a moment, our news colleague, Anna Helhosky, will join us to talk about the recent budget bill that passed in Washington.”
Tax Provisions Overview
3:40 to 5:26
Explore key tax changes and benefits stemming from the budget bill.
“What's staying, what's changing, and who's going to benefit?”
Clean Energy Tax Credits Ending
5:26 to 7:18
Details on the expiration of clean energy tax credits and their implications.
“So tax credit that parents are pretty familiar with is the child tax credit.”
Introduction of Trump Accounts
7:18 to 8:10
Learn about new savings accounts for newborns and their potential benefits.
“These credits help homeowners get tax credits on things like heat pumps, insulation, ECV chargers, and also solar panels.”
Impact of Budget Cuts on Social Programs
8:10 to 8:52
Discussion on budget cuts affecting Medicaid, Medicare, and the ACA.
“Now, Sean, I know that we've talked off mic about this and you've got some feelings.”
Changes to SNAP and Food Benefits
8:52 to 10:52
Overview of eligibility changes and cuts to food assistance programs.
“In order to pay for all these things, you have to cut other areas.”
Affordable Care Act Implications
10:52 to 12:20
Explore potential impacts of new ACA regulations and increased premiums.
“food assistance cuts over 10 years, beginning in 2028.”
Student Loan Changes and Economic Implications
12:20 to 14:01
Details on student loan alterations and the broader economic strategy behind them.
“Now, the Trump administration has already been targeting the CFPB for dismantling.”
Understanding the Big Beautiful Bill
14:01 to 16:00
Learn about the economic impacts and timing strategy behind the new bill.
“It just means that people won't necessarily be able to get those advanced degrees because they're not going to be able to afford it.”
Show all 16 chapters
Listener Questions and Engagement
16:00 to 16:28
Discover how to engage with the podcast and share your financial questions.
“Yeah, we're going to be following this in the months and years to come.”
Listener Questions and Engagement
17:02 to 18:06
Discover how to engage with the podcast and share your financial questions.
“As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.”
Listener Questions and Engagement
18:20 to 19:28
Discover how to engage with the podcast and share your financial questions.
“Many don't work with insurance at all, which means you're stuck paying the full cost out of pocket or paying for an expensive monthly subscription.”
Navigating Disability Benefits
20:13 to 23:28
Understand the complexities of Social Security Disability Insurance.
“We're back and answering your money questions to help you make smarter financial decisions.”
Emotional and Financial Strategies for Disability
23:28 to 28:00
Learn strategies to cope financially and emotionally with disability.
“The calculation is based on your lifetime average earnings covered by Social Security.”
Understanding Disability Insurance
28:00 to 31:39
Learn about the importance of disability insurance and who needs it.
“But you have to give yourself time to adjust and refocus.”
Transcript
Automatic transcript. May contain errors.0:00Sean Pyles:The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt.
0:05Elizabeth Ayoola:You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live, and they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.
0:22Sean Pyles:This is thanks to Bilt's three new credit cards, the Palladium Card, Obsidian Card, and Blue Card. All three can turn your housing payments, rent, or mortgage into flexible rewards. So you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.
0:37Elizabeth Ayoola:Built points can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments, and so much more. Built points have also been ranked by top publications as the industry's most valuable point currency.
0:51Sean Pyles:Your housing payment is most likely your biggest expense. Make it your most rewarding. Find the card that fits your lifestyle and apply today at joinbuilt.com slash smartmoney. That's J-O-I-N-B-I-L-T dot com slash smartmoney. Make sure to use our URL so they know we sent you. Terms and limitations apply.
1:10Elizabeth Ayoola:Subject to approval and eligibility. Built cards are issued by Column N.A., member FDIC, pursuant to license from MasterCard International Incorporated. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply.
1:47Elizabeth Ayoola:Need a hiring hero? This is a job for Indeed Sponsored Jobs.
1:51Sean Pyles:A big budget bill passed Congress and the president signed it. Its beauty may be in the eye of the beholder, but it includes a lot of changes to the federal government's spending priorities, changes that could affect your finances. So today, we'll run it all down for you.
2:12Elizabeth Ayoola:Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Elizabeth Ayola.
2:19Sean Pyles:And I'm Sean Piles. Later this episode, we'll be answering a listener's question about how to save when you're on disability and what we should all know about disability insurance. But first, our weekly Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.
2:35Elizabeth Ayoola:In a moment, our news colleague, Anna Helhosky, will join us to talk about the recent budget bill that passed in Washington. But first, Sean, we've got an update to a story we covered a few months ago where we explained a new federal rule. It was designed to help you cancel subscriptions to everything from newsletters to streaming services and beyond.
2:53Sean Pyles:This was called the click to cancel rule, and it was implemented back in October by the FTC, the Federal Trade Commission. It was designed to make it just as easy to cancel a subscription as to sign up for one, you know, with a click of your mouse. Some companies made it way more difficult. You'd have to call or jump through other hoops. It was supposed to take effect this week, but now that's not happening.
3:14Elizabeth Ayoola:The Eighth Circuit Court of Appeals vacated the rules saying that the FTC didn't follow the right procedures in making it. So it's back to those phone calls and hoops and more clicks.
3:26Sean Pyles:Great. All right, well, let's get to what is officially called the One Big Beautiful Bill Act, a sprawling federal budget that clocked in at nearly 900 pages from tax cuts and credits to safety net rollbacks. We can't get to everything, so we're going to highlight what matters most to households. And Anna Helhoske is here with us. Anna, let's start with taxes. What's staying, what's changing, and who's going to benefit? Yeah, those are all pretty good questions, Sean. And speaking of we can't get to everything, there was about 70 tax provisions in this budget. And they added up to$4.5 trillion in total cuts over 10 years.
4:04And that was mostly because of the Tax Cuts and Jobs Act of 2017, which was made permanent. And those cuts were supposed to expire at the end of this year and then it was going to go back to a higher tax rate, but that's no longer the case. But those cuts primarily benefited higher income folks and corporations, and they're the ones that saw the largest percentage increases compared with the rest of us middle and lower income households. Now, the bill makes permanent the standard deduction, too, and that was doubled in 2017. So the new budget will increase that amount. Seniors are also getting a temporary deduction increase, and that's on top of the standard deduction.
4:43So any senior earning$75 ,000 or less individually is eligible for a$6 ,000 deduction.
4:49Sean Pyles:So Ana, there was also a big change to state and local tax deductions as well. Tell us about that. Another deduction that increased significantly is the state and local tax or SALT deduction. There used to not be a cap on the amount that a taxpayer could deduct for certain taxes, and the 2017 act set a$10 ,000 cap, but that was supposed to expire. The new bill increases that cap to$40 ,000 beginning in the 2025 filing year, but it's only gonna be temporary. And in tax year 2029, it'll revert back to the$10 ,000 cap. And that's really only for taxpayers who itemize and there will eventually be a phase out according to your income.
5:26So tax credit that parents are pretty familiar with is the child tax credit. And the increased amount will be permanent beginning with$2 ,200 in 2026.
5:35Sean Pyles:And there are a few other kind of very specific tax deductions that people should know about as well that are new and piqued my interest. One is no tax on tips. We heard a lot about this during the presidential campaigns. Taxpayers can deduct up to$25 ,000 in tipped income from federal taxes. Similarly, there is also no tax on overtime. Taxpayers can deduct up to$12 ,500 against overtime pay. And one that really interested me, even though I'm not in the market to buy a car is that there's a deduction for car loan interest. Taxpayers can write off up to$10 ,000 a year in interest on new loans on cars bought after December 31st, 2024.
6:13Sean Pyles:Now, there are a couple specific details to mind with this deduction. One is that these cars must be new and assembly must be completed in the U.S. There's also a phase out according to income. Now, a big perk of these three deductions is that you don't need to itemize to be able to claim them, but they're only available for a short period of time. Relatively, all three of these deductions are only from 2025 through 2028.
6:36Elizabeth Ayoola:All right, let's move on to clean energy tax credits. So there are a few tax credits that households might miss with this new bill, more specifically households who are invested in clean energy. One is the EV tax credit that was available to people who bought new or used electric vehicles. That particular tax credit will now end on September the 30th, 2025. So that's this year. Just for context, the credit provides up to$7 ,500 for qualifying new electric vehicles or fuel cell electric vehicles and up to$4 ,000 for qualifying used models. Now, the second thing you all should know is that two clean energy tax credits for homeowners who make green energy changes to their homes will end after this year.
7:17Elizabeth Ayoola:So they include the home solar tax credit and the energy efficient home improvement credit. These credits help homeowners get tax credits on things like heat pumps, insulation, ECV chargers, and also solar panels. All right, there's one more tax-related item to point out, and those are the Trump accounts. And these are new savings accounts that automatically enroll babies born from January 1st of this year through the end of 2028. And the federal government plans to cede each account with$1 ,000. Now, those babies have to have a social security number and be a U.S. citizen to qualify. And there are also some contribution restrictions.
7:53So you can only contribute about$5 ,000 per year and employers can actually contribute up to$2 ,500 per year. So you could end up with$7 ,500 in those accounts every year. But the distributions aren't going to be allowed till a child turns 18. Now, Sean, I know that we've talked off mic about this and you've got some feelings.
8:14Sean Pyles:Yeah, I think overall there are better options out there, like I would say a taxable brokerage account, which don't have contribution or withdrawal limits. Also, for most parents, 529 plans are going to be a lot more flexible than the Trump accounts. They also have higher contribution limits. But at the end of the day, this is still free money. If I could get a thousand bucks for a kid, I don't have a kid, but if I did, I would love a thousand dollars for them. I would just say don't rely on this solely for all of your retirement and college savings plans needs for your child. But hey, get it if you can.
8:45All right. So we can move on from taxes from here. But I just want to say that the cost of all these programs are really high. It's the biggest in the bill. In order to pay for all these things, you have to cut other areas. And there could be some really big consequences to those reductions.
9:01Elizabeth Ayoola:And that moves me on to a topic that I have big feelings about. For context, I studied social policy. So I love learning about social programs. And there are going to be some major rollbacks and changes to popular social safety net programs like the Affordable Care Act, Medicaid, and also food assistance. So the result will be$930 billion in cuts over the next 10 years to Medicaid, Medicare, and also the Affordable Care Act. Currently, 71 million Americans are enrolled in Medicaid and more than 45 million Americans have health coverage through the ACA, according to government data. All right, so let's start off with work requirements.
9:39And the first thing the bill does is make it more difficult for people to stay on Medicaid. So starting any time before December 31st, 2026, states are going to implement work requirements in order to enroll in Medicaid. Now, non-disabled recipients will have to file paperwork on a pretty regular basis to demonstrate that they're working, volunteering, receiving work training, or going to school at least 80 hours a month. Some are going to qualify for an exemption, such as those who care for a child. But eligibility rules overall are going to tie in. For some historical context, this has been done before at the state level.
10:13Arkansas briefly implemented a Medicaid work requirement that lasted only from June 2018 to March 2019. During that time, 18 ,000 people, which was about 25 % of that population, lost their health care coverage. And that was largely due to failure to report or having documentation, not eligibility. And on top of that, there was no meaningful increase in employment due to the policy.
10:38Sean Pyles:There are also some major cuts coming to food benefits to help reduce federal spending. the big, beautiful bill tightens eligibility for Supplemental Nutrition Assistance Program, or SNAP, and shifts some costs onto states. There will be up to$230 million in SNAP and food assistance cuts over 10 years, beginning in 2028. It also adds work requirements that could begin as soon as this year, which would include able-bodied recipients ages 18 to 64, up from 54. The requirements also include those with children older than six years old.
11:11Elizabeth Ayoola:So about five years ago, I actually was on SNAP. And as you all know, I have a son. I was an intern at an addiction rehab facility, and they were paying me maybe like$8 an hour. So I needed SNAP to help me get groceries while I was looking for a higher paid job. But I can't imagine, I know it doesn't apply to parents with young kids, but I can't imagine having to jump through a whole bunch of hoops while you're facing financial stress and trying to look for a job and possibly working. It's tough. All right. So on to the ACA. So the Affordable Care Act will tighten rules, which are going to spike marketplace premiums by anywhere from 25 percent to 100 percent, which could make health insurance through these marketplaces prohibitively expensive for many people.
11:53Elizabeth Ayoola:Those changes could lead to an additional 4.2 million people becoming uninsured by 2034. And that's according to the CBO. Now, there are multiple provision changes to the ACA, and they're going to roll out between 2025 and 2028. Another area of stress for a lot of consumers is going to be the lack of protections, since funding for the Consumer Financial Protection Bureau was also cut in half by the bill, and that's effective immediately. In case you're not familiar, that agency oversees the consumer financial industry, and they've secured more than$21 billion in refunds and relief for more than 200 million consumers.
12:30Now, the Trump administration has already been targeting the CFPB for dismantling. So with fewer dollars, the CFPB may be far less able to assist consumers.
12:39Sean Pyles:Yeah, as someone who's covered scams for many years here at NerdWallet, I'm pretty concerned about what this means for a lot of average people and their susceptibility to fraud of all kinds. Okay, well, turning now to student loans, lots of changes there. Current income-driven federal loan repayment plans will sunset on July 1, 2028. On July 1st, 2026, enrollment in a new Repayment Assistance Program, or RAP, will begin. That's meant to replace the existing income-driven plans and requires a$10 minimum monthly payment for borrowers and extends the timeline for forgiveness to 30 years.
13:14Elizabeth Ayoola:Now, graduate and parent plus loan changes that you all should know about. First of all, funding for graduate plus loan programs, a type of federal student loan that helps graduate and professional students to finance their education expenses, is going to be ending on July the 1st, 2026. Lifetime borrowing for graduate studies is also capped. As a graduate or professional student, the federal lifetime borrowing limit for subsidized and unsubsidized student loans is$138 ,500. So what's going to happen here is it implements a new$65 ,000 cap on Parent PLUS loans as of July the 1st, 2026. Additionally, there's going to be an annual cap of$20 ,000 a year per student.
13:55Elizabeth Ayoola:It's a notable change as the current system lets parents borrow up to the full cost of their child's education. I want to add to this that it's not like programs in college is going to get cheaper. It just means that people won't necessarily be able to get those advanced degrees because they're not going to be able to afford it.
14:10Sean Pyles:Or they may be pushed into more expensive private student loans. Yes, and that's problematic in its own right. So I want to talk overall about timing in this bill because there's clearly a strategy here with the rollout. Most of the tax cuts and credits that are given to households and corporations, by the way, are beginning this year. And the majority of the sweeping social program cuts that we've been talking about won't begin until 2028. Now, Sean, Elizabeth, what's right in between this year and 2028? Would that be the midterm election? It is indeed. So it's very clear that there is some kind of timing strategy in place right now.
14:49Sean Pyles:Well, there are also a lot of economic changes and repercussions in this bill. One is the debt ceiling. The bill increases the debt ceiling by$5 trillion, which will help the U.S. avoid a default this summer, which, in case you didn't know, we were headed for. Yes, and avoiding a default is quite good. But there are some other economic results that are a little bit less positive here. While the Tax Foundation says that tax cuts will temporarily stimulate growth by encouraging business investment, it's going to be really expensive. As I mentioned before, the bill adds some$3 trillion to the national debt over the next decade.
15:23And the current debt is$36 trillion. And those main spending areas are tax cuts, as we mentioned before, along with$1 trillion for defense, border security, and immigration enforcement, including$45 billion for the U.S.-Mexico border wall and$45 billion for immigration detention centers. So I had spoken to our resident economist, Elizabeth Renter, before our recording, and she said, quote, the bill might juice short-term growth, but it will also worsen the national debt problem and hurt lower income households.
15:55Elizabeth Ayoola:All right, Ana, thanks so much for walking us and the listeners through all of this. There is so much that is entailed in the Big Beautiful Bill, and hopefully we have a better understanding of what affects us now. Yeah, we're going to be following this in the months and years to come.
16:10Sean Pyles:Up next, we answer a listener's question about how to save when you're on disability. But before we get into that, a reminder, listener, for you to send us your money questions. Maybe you're wondering what all of these changes may mean for you and how you can best navigate them. Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD or email us at podcast at nerdwallet.com.
Read the full transcript
16:33Elizabeth Ayoola:A reminder, listener, we're going to be doing a new budget rehab segment soon and we need your help. So if you're looking for some tips or strategies to improve your budgeting skills, click the link in the episode description to fill out the Google form. It would make us extremely happy.
16:47Sean Pyles:In a moment, this episode's money question. Stay with us.
16:55Sean Pyles:The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt.
17:01Elizabeth Ayoola:You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live, and they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.
17:18Sean Pyles:This is thanks to Built's three new credit cards, the Palladium card, Obsidian card, and Blue card. All three can turn your housing payments, rent, or mortgage into flexible rewards. So you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.
17:32Elizabeth Ayoola:Built points can be redeemed at top airlines and hotels. Amazon.com purchases, future rent payments, and so much more. Built points have also been ranked by top publications as the industry's most valuable point currency.
17:47Sean Pyles:Your housing payment is most likely your biggest expense. Make it your most rewarding. Find the card that fits your lifestyle and apply today at joinbuilt.com slash smartmoney. That's J-O-I-N-B-I-L-T dot com slash smartmoney. Make sure to use our URL so they know we sent you. Terms and limitations apply.
18:05Elizabeth Ayoola:Subject to approval and eligibility. Built cards are issued by Column N.A., member FDIC, pursuant to license from MasterCard International Incorporated.
18:17Sean Pyles:Today's episode is sponsored by Rula. Finding a therapist is hard enough, but finding one who actually takes your insurance, that's where most online therapy platforms fall short. Many don't work with insurance at all, which means you're stuck paying the full cost out of pocket or paying for an expensive monthly subscription.
18:33Elizabeth Ayoola:Rula does things differently. They partner with over 100 insurance plans, making the average copay just$15 per session. That's real therapy from licensed professionals at a price that actually makes sense. I mean, think about it. You use your insurance benefits to maintain your physical health. So why won't you do the same for your mental health?
18:53Sean Pyles:Rula isn't just affordable. The experience is tailored around you. Other online therapy platforms might match you with the first available provider, whether or not they're the right fit. Rula considers your goals, preferences, and background to provide you with a curated list of licensed in-network therapists who are actually aligned with what you need, because they know that finding the right therapist can make all the difference.
19:12Elizabeth Ayoola:No wait list, no frustrating back and forth. Rula makes it easy to find a mental health provider who is accepting new patients, and appointments are available as soon as tomorrow. Plus, Rula sticks with you throughout your journey, checking in to make sure your care is helping you move forward.
19:28Sean Pyles:Go to rula.com slash smartmoney to get started today. That's R-U-L-A dot com slash smart money for quality therapy that's covered by insurance.
19:36Elizabeth Ayoola:The average copay for Rula patients is$15, but depending on your benefits, your copay could be as little as$0 per session.
19:45Sean Pyles:Rula partners with a network of over 15 ,000 therapists and psychiatrists nationwide, enabling you to find your personalized solution and the right therapist for you based on your needs, preferences, and state requirements.
19:54Elizabeth Ayoola:Thousands of people are already using Rula to get affordable, high-quality therapy that's actually covered by insurance. Visit Rula.com slash smartmoney to get started.
20:05Sean Pyles:That's R-U-L-A dot com slash smartmoney. You deserve mental health care that works for you, not against your budget. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from a listener's text. Here it is, as read by NerdWallet's head of multimedia content and my boss, and also Elizabeth's boss, Hilary Georgie. Hi, I just found your podcast. Thank you for the content. Taking you up on your offer and submitting a question. My question is a tough one. I am a 35-year-old female who went from being an athlete and personal trainer to needing to be on disability.
20:41It may need to be permanent. Needless to say, there has been a lot of grieving. One of the many components of grief is the feeling of hopelessness. I earned a scholarship for best business plan in my graduating class and prided myself and identity as an entrepreneur. Now I'm capped at what I can earn. I need disability. Without it, I was in the ER monthly. I'm looking into starting a nonprofit organization but still struggle. Any words of advice for those on disability? Is saving ever an option when you're on the poverty line?
21:11Elizabeth Ayoola:To help us answer our listeners' question on today's episode, we have personal finance nerd Kate Ashford, who is not a stranger to the pod. Hello, Kate. Hi, Elizabeth. Happy to be back.
21:24Sean Pyles:Hey, Kate. So let's start by talking about the complicated yet vitally important world of disability benefits. Can you outline what they are and how they work? We're going to assume that the listener is referring to Social Security Disability Insurance benefits here. Social Security Disability Insurance, or SSDI, is a benefits program run by the federal government that provides income to people with qualifying disabilities. So in general terms, you qualify if you can't work because you have a disability that is either expected to result in death or it's lasted or it's expected to last for at least 12 months.
22:01You also must have worked for at least five of the previous 10 years, although people under age 24 may not need as much work history. And there's a separate definition for children under 18, but we're not getting into that today. Every so often, the Social Security Administration will review your situation and make sure they're you still qualify.
22:16Sean Pyles:And that top line explanation really underscores how complicated all of these rules are around how you can qualify for this program. We should clarify that we're talking about SSDI, which as you just laid out, is not the same thing as Supplemental Security Income or SSI. So there's SSDI and SSI. So it's a little confusing. That's right. Social Security Disability Disability Insurance, SSDI, is not the same thing as Supplemental Security Income, SSI, which also provides pay to people with disabilities or who are blind or who are 65 or older. But there are much stricter income and asset limits. And SSI is need-based, so you can't have more than$2 ,000 in countable assets.
23:02So it's a little different.
23:02Elizabeth Ayoola:Now, something I know to be true about SSDI is usually you get just enough to cover necessities and benefits, and it tends to be just above federal poverty level income. How can a listener and others save when working with disability or little income? So in 2025, Social Security Disability Insurance can be as high as$4 ,018 a month, but the average monthly benefit this year so far is just a little over$1 ,500 a month. So, yeah, that's tough. The calculation is based on your lifetime average earnings covered by Social Security. The good news is that people receiving these benefits can have a savings account, and there are no limits to how much money is in it.
23:43The bad news is when your income is low, it's really hard to save.
23:47Elizabeth Ayoola:With how inflation has been over the years, I can imagine that that might be a hard income to live off of. So with that said, what are some ways that people can grow their income? One thing that comes to mind is investing, even if you only have a little bit to put towards it. It's a tricky question because the idea behind federal disability benefits is that you can't work. So if you're working and earning income, you could lose your benefits. So your monthly earnings are capped if you want to hang on to your disability pay. You mentioned investing and actually investing income like interest and dividends and capital gains don't count toward income limits when you're on disability.
24:22That said, I think it's safe to say that most people in this situation don't have a steady flow of extra income to regularly invest. So you're limited to whatever invested savings you might have already.
24:33Sean Pyles:So our listener, despite being on disability, they really want to do things with their life. They are considering starting a nonprofit. So can you explain what it might look like to start such an organization like a nonprofit, a business, or even work while receiving SSDI? What might be the financial implications of that? The Social Security Administration has set up a system for this with really specific guidelines. The precise details are a little complicated, but the gist is you can't earn more than a certain amount, around$1 ,200 to$1 ,600, over the course of a set amount of months without your benefits being reduced or ending altogether.
25:07Sean Pyles:Again, another example of how complicated and restrictive these benefits can be. For many folks on disability, they may want to work, but if they earn above what's quite a low threshold, the benefits that they rely on could be in jeopardy. And that leaves a lot of folks like our listeners in a bind.
25:24Elizabeth Ayoola:I want to ask you, Kate, are there any legal, I'm going to emphasize on legal here, loopholes or way to deduct expenses so that people can lower their income when they're on disability? Sure, Elizabeth. One thing to note here is that although there are limits on earnings, in some circumstances you are able to deduct the cost of work expenses that are related to your disability. So like a wheelchair, specialized work equipment, co-payments for prescriptions. So your actual income could be higher than the threshold and still meet requirements after you deduct expenses. And before you ask, yes, you can start a nonprofit and take no salary or a small salary, but the social security administration may decide to evaluate your work based on the value you are providing versus the small salary you're taking so if you're paying yourself a thousand dollars a month but you're working 40 hours a week they may decide you're basically doing the work of a full time employee so you could be a full-time employee and you could lose your benefits so it's probably a good idea to consult a professional like a financial advisor or an attorney if you're pondering these sorts of decisions.
26:30Elizabeth Ayoola:So the listener also mentioned feeling hopeless because they went from being an athlete and a personal trainer to being on disability. How can people going through such a major transition move past those emotions? Sean, you always say part of being a CFP is being a therapist, so I'm popcorning that to you as well.
26:46Sean Pyles:So I'm not going to lie, this is really hard. And the conversation has me thinking a lot about my twin sister who struggles with a number of health issues that have led her to being out of work many times over the years. she's tried to get on disability and was denied and it's all just so exhausting because she would love to work but she physically can't most of the time and so given how hard this is the best thing to do is often lean on your loved ones for emotional support you know i'm there for my sister when she needs me even when she doesn't need me i'm always there pestering her and she also has a wonderful husband who is a huge help and all of this just makes a hard situation a little bit easier to endure.
27:26Sean Pyles:And also, you know, nothing beats a good therapist too. So Kate, do you have any thoughts on this? Sean, I second the good therapist for sure. I think it's completely valid to feel a sense of loss for a life shift like this, especially if you identify as this kind of person in this role and suddenly that role is gone or really different. And I'm sure there are a lot of ways people can handle this, but I think it's helpful to think about the fact that you are still you, you still have the same core values, and maybe you can point that sense of purpose toward a new set of goals. But you have to give yourself time to adjust and refocus.
28:04Elizabeth Ayoola:Absolutely. And this discussion makes me think of a statistic I came across, which is that more than one in four adults in the U.S. have some type of disability. So what are some financial guardrails people can put in place to prevent losing a chunk of present and future income if they happen to become disabled. Disability insurance is one option that I can think of. Yes, disability insurance is key here. There are two types, short-term, which covers temporary disabilities, typically three to six months, but even up to a year, and long-term, which, as you might expect, is for disabilities that last longer.
28:38But it's really important to make sure you have an emergency fund with at least three to six months of living expenses in it, especially because sometimes it can take time for disability benefits to kick in. And if your situation looks like it could be long term, apply for disability as early as possible because it can take a while to get approved.
28:56Sean Pyles:Well, let's talk about who needs disability insurance. Something that comes to mind as well is another stat that one in four workers will face an accident or illness during their lifetime that will keep them out of work for at least a year. So it sounds like something that most people should at least be considering. Sean, that's a really powerful statistic. And really, anyone who earns income should have disability insurance. But if we're being picky, it's most important for the sole provider of a family, people who support children, people who work in physically demanding jobs, and those with chronic or recurring health issues.
29:29So if someone depends on your salary or there's a good chance that an injury or illness could really make it impossible for you to keep working, disability insurance would be a smart move. And keep in mind that a good disability policy is for your own occupation, meaning that you can't do your current job. So it's easier to become unable to be a firefighter, say, than being administrative staff.
29:53Sean Pyles:And that's in contrast to what can be called any occupation disability insurance, which means that you wouldn't be able to do any type of job to qualify for the benefits. And this just kind of opens up the can of worms of how complicated different types of disability insurance can be.
30:06Elizabeth Ayoola:For sure. Hopefully we're simplifying it for you listeners.
30:09Sean Pyles:Yeah, we're putting a cap on this can.
30:11Elizabeth Ayoola:All right, Kate. So where should people begin to look for disability insurance? Some employers offer disability insurance, so that may be a good jump off point. And I'm also aware that over 35 % of employers offer some type of disability insurance to their employees, according to data from the Bureau of Labor Statistics. If you have access through work, that's a great option and usually much less expensive because employers typically cover part or all of the premiums. If you don't have access through work, start with a disability insurance broker who can give you quotes from multiple insurers.
30:42and also you should get quotes directly from major insurance companies who aren't on their list. You should get multiple quotes because pricing can differ from provider to provider and you should aim to cover at least 60 % of your gross income. Then is it worth getting a supplemental policy? Even if you have coverage through work, you may want one. You may want supplemental disability benefits because employer benefits will be taxed and you usually can't take the insurance with you when you leave that job. Disability insurance on the open market can be expensive. So ask your broker about ways to bring the cost down, like choosing a longer elimination period, which is the period before benefits kick in, or buying a policy that covers a shorter benefit period, like five years.
31:25And maybe this goes without saying, but I'm going to say it. You can't buy disability insurance once you are disabled, or at least not for the condition that's disabling you. So this is something you should buy now when you're healthy.
31:38Sean Pyles:Good advice. Well, Kate, thank you for coming on and talking to us about the ins and outs of disability. Absolutely. Thank you for having me.
32:12Sean Pyles:to automatically download new episodes.
32:14Elizabeth Ayoola:And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general, educational, and entertainment purposes. And honestly, it might not apply to your specific circumstances. This episode was produced by Tess Viglin and Anna Helhosky. Hilary Georgie helped with editing. Nick Karisimi mixed our audio. And we want to say a big thank you to NerdWallet's editors for all the help they give us.
32:38Sean Pyles:And with that said, until next time, turn to the nerds.
32:47Elizabeth Ayoola:This summer, no excuses. Double down when everyone else disconnects. At Equinox, that's high-performance living. Iconic spaces built to inspire, personal training backed by real data, unlimited signature classes, including Pilates and HIIT. Elevate your post-performance ritual with saunas and steam rooms, as well as innovative treatments at the spa. Everything you need to lock in this summer and unlock your potential at Equinox. Start today at equinox.com.
From the publisher
Learn what the One Big Beautiful Bill Act means for your taxes, benefits, and financial planning. Then, understand how to adapt to living on disability insurance.
What tax changes are coming from the federal budget bill? Can you save money while living on disability? Hosts Sean Pyles and Elizabeth Ayoola unpack the latest legislative changes to help you understand how they’ll impact your finances. Joined by senior news writer Anna Helhoski, they explain how the nearly 900-page budget bill alters the tax landscape, including extensions of Trump-era cuts, new deductions for car loan interest and tipped income, and major clean energy credit rollbacks. They also explain what the end of certain EV and solar credits means for your 2025 tax strategy and how new "Trump Accounts" for babies could factor into long-term savings.
Then, personal finance Nerd Kate Ashford joins Sean and Elizabeth to help answer a listener’s question about how to manage their finances while on disability. They cover SSDI vs. SSI, saving strategies despite income limits, and whether it's possible to start a nonprofit or invest money without risking benefits. They also discuss emotional support during life transitions, who should consider disability insurance, and how to shop for a policy while you’re still healthy.
Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header
In their conversation, the Nerds discuss: federal budget 2025, tax cuts 2025, Trump tax cuts extension, new tax deductions 2025, car loan interest deduction, tipped income tax exemption, overtime income tax deduction, SALT deduction 2025, standard deduction for seniors, clean energy tax credits ending, EV tax credit deadline, solar panel tax credit expiration, energy efficient home improvement credit, Trump baby savings accounts, Medicaid work requirements, SNAP cuts 2028, ACA premium increases 2025, health insurance cost increase, student loan changes 2026, repayment assistance program 2026, graduate student loan limit, SSDI savings rules, how to save on SSDI, investing while on SSDI, SSDI vs SSI, work income limit on disability, disability benefits income cap, short term disability insurance, long term disability insurance, how to buy disability insurance, SSDI work expense deductions, how to qualify for disability benefits, financial planning on disability, and new tax rules 2025.
To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email podcast@nerdwallet.com.
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