We provide the ﬁrst evidence on the relationship between disability programs and markers of ﬁnancial distress: bankruptcy, foreclosure, eviction, and home sale. Rates of these adverse ﬁnancial events peak around the time of disability application and subsequently fall for both allowed and denied applicants. To estimate the causal eﬀect of disability programs on these outcomes, we use variation induced by an age-based eligibility rule and ﬁnd that disability allowance substantially reduces the likelihood of adverse ﬁnancial events. Within three years of the decision, the likelihood of bankruptcy falls by 0.81 percentage point (30 percent), and the likelihood of foreclosure and home sale among homeowners falls by 1.7 percentage points (30 percent) and 2.5 percentage points (20 percent), respectively. We ﬁnd suggestive evidence of reductions in eviction rates. Conversely, the likelihood of home purchases increases by 0.86 percentage point (20 percent) within three years. We present evidence that these changes reﬂect true reductions in ﬁnancial distress. Considering these extreme events increases the optimal disability beneﬁt amount and suggests a shorter optimal waiting time.