It's better not to rely on Social Security alone to take care of you in your golden years --- even if you're already receiving ample disability benefits in your younger years. A retirement account such as a 401(k) is an excellent way to set aside money for retirement, but your ability to have one depends on two main things: your employer's policies and how much your medical condition affects your ability to work.
About the 401(k)
A 401(k) is a defined contribution plan offered through an employer that allows you to save up for retirement. If you have a 401(k), you choose how much money in each pay period you want to invest, and your employer automatically moves that amount from your paycheck into your account before you ever see the money. Sometimes, as an incentive to save, an employer will match a percentage of your contribution.
Your ability to invest in a 401(k) depends, first and foremost, on whether your employer offers such an account. Some employers don't offer 401(k)s at all, while others won't match your contributions. Either way, once you open a 401(k) through your employer, you have full control of where your money goes. Take your time and decide whether investing in stocks, bonds, mutual funds or a combination of these items will work best with your overall retirement plan.
If your disability is completely debilitating and you cannot work, you won't have access to a 401(k) and you will have to choose another method of saving for retirement. However, if you are still able to work part-time or full-time, choose an employer that offers a 401(k) to its workers. Also, rest assured that if your disability worsens and you must leave your job, your 401(k) still belongs to you and you may withdraw from it penalty-free when you reach age 59.5.
If your employer doesn't offer a 401(k), there are other effective ways to save for retirement. You may open a traditional or Roth IRA, which both offer tax advantages and allow you to invest in funds of your choice. For either of these accounts, you must have some form of earned income --- but to invest in a Roth IRA, your income cannot exceed (as of 2011) $105,000 if you are single or $167,000 if you are married and filing jointly. You can also open a regular investment account, but this type offers no tax breaks.
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