Disability Benefits (SSDI) - Social Security

Disability Overview

Social Security Disability Insurance, or “Disability”, provides monthly payments to people who have a disability that stops or limits their ability to work. SSDI can pay benefits to clients and certain members of their family if they are "insured," meaning that they worked long enough and paid Social Security taxes.

Not everyone gets the same amount; the benefit that the client is eligible for will depend on their work history and covered earnings during that time. To reflect social security benefits that are not automatically calculated in RightCapital, such as Disability, advisors can use an Other Income card to manually enter social security income into the plan.

How To Add Disability Benefits

To add Social Security Disability Insurance in RightCapital, open the client’s plan, navigate to the Profile > Income section (or Step 2 of the initial data entry), and click Add Income > Other > Other Income. This will add an Other Income card to the plan:

Within this card, enter the annual amount of the SSDI benefit in the ‘Annual Amount’ field. Select either the client or the co-client as the ‘Owner’, and determine the timing of the benefit using the ‘Income Starts’ and ‘Income Ends’ fields.

Your Social Security Inflation rate will not be applied to this card, but your desired inflation rate can be reflected within the ‘Annual Increase’ field. If you’d like to double-check your social security inflation rate, this can be seen in the Gear Icon > Settings > Other Assumptions tab of the plan:

Within the Taxes field in the lower right of the card, be sure to select the ‘Social Security’ option. This will ensure that the income stream is recognized as social security income and taxed accordingly within the plan. This can be tracked within the Tax > Tax Estimate > Details tab.

The annual benefit will flow into Line 1 of the Taxable Social Security Worksheet, as well as Line 6a of the 1040.
The Taxable SS amount calculated on Line 18 of the Taxable Social Security Worksheet will flow into Line 6b of the 1040.