Are you approaching retirement and wondering: Will my disability benefits change when I turn 65? If you’re eligible for Social Security disability insurance (SSDI) and retirement benefits, you may have a choice to make.
This article will explore what happens to your disability benefits when you reach retirement age. Find out whether you get to keep them and what you need to consider.
Understanding Social Security Disability Benefits
Social Security disability insurance (SSDI) is a government program that helps people who can't work because of a severe medical condition expected to last at least a year or result in death. The benefits you get depend on your work history and the Social Security taxes you've paid.
You are eligible for full Social Security retirement benefits when you reach your full retirement age, usually between 66 and 67, depending on when you were born. These benefits are also based on your work history and taxes paid but calculated differently from SSDI benefits. If you try to take Social Security retirement benefits early, which is possible starting at age 62, you receive a reduced amount.
You must understand this distinction as it affects how much money you get and when you can start receiving it. You can't get both at the same time. If you're getting SSDI when you hit full retirement age, your benefits will switch automatically to retirement benefits with the same amount.
So, if you're disabled before your full retirement age, you’re better off applying for SSDI benefits instead of taking early retirement benefits, which are reduced if you claim them before your full retirement age. However, there might be exceptions if you're also getting workers' compensation or other public disability benefits, which could lower your SSDI benefits. In that case, you'll want to compare the amounts of SSDI and retirement benefits, in addition to other factors, to choose the better deal.
How to Qualify for SSDI Benefits
To qualify for SSDI benefits, you must have a medical condition that meets Social Security's strict definition of disability. By this standard, your condition must prevent you from doing substantial gainful activity (SGA) and it's expected to last at least 12 months or result in death.
Also, you must have worked long enough in jobs covered by Social Security and earned enough work credits. The number of credits required depends on your age when your disability begins, but generally, you need 40 credits, with 20 earned in the last 10 years leading up to your disability.
If you meet these requirements, you can apply for SSDI benefits online, over the phone or in person. You must provide information and documents about your work history, medical condition, income and resources. Social Security will review your application and make a decision based on the evidence you provide and the program's rules.
Will Your Disability Benefits Change When You Turn 65?
Your disability benefits switch from Social Security disability insurance (SSDI) benefits to Social Security retirement benefits when you turn 65. The amount of money you get each month stays the same.
Social Security retirement benefits depend on your birth year. The full retirement age (FRA) is the age at which you can receive your full benefit amount. The FRA varies from 65 to 67 depending on when you were born. You can see the FRA for different birth years in this chart.
If you're getting SSDI benefits, you don't need to worry about deciding when to start your retirement benefits. They'll automatically switch to retirement benefits when you hit your FRA. But if you start taking early retirement benefits and then become disabled, you might be able to change back to SSDI benefits if you meet certain conditions.
Should You Claim Early Social Security Benefits?
Deciding whether to claim early Social Security benefits depends on your personal and financial situation. When you claim early, your monthly benefit is permanently reduced. For instance, if you were born in 1960 or later and claim at 62, you'll get up to 30% less each month than if you waited until your full retirement age of 67.
Again, claiming early means you'll receive smaller cost-of-living adjustments (COLA) in the future because they're based on your initial benefit amount.
Claiming early may affect your earnings if you're still working and haven't reached your full retirement age. Social Security will deduct some of your benefits if you earn more than a certain limit. However, you'll get this money back after reaching full retirement age.
Claiming early might be a good choice if you need the money to cover your living expenses or if you have a shorter life expectancy and don't expect to break even by waiting longer.
It could also be a good option if you want to invest your benefits and potentially earn a higher return than what Social Security offers. However, this strategy comes with risks and uncertainties.
Other Social Security Benefits You May Be Able to Get at Retirement
In addition to Social Security retirement benefits, there are other benefits you might qualify for at retirement, depending on your income, assets and health. These benefits are designed to support individuals and families with limited financial resources, ensuring they can access healthcare, food and other necessities.
- Supplemental security income (SSI): This monthly benefit is for older adults (65 and above), blind individuals or those with disabilities who have low income and limited resources. The maximum federal SSI benefit for 2024 is $943 per month for eligible individuals and $1,415 per month for couples. Some states may add extra money to this benefit.
- Medicare: This is health insurance for people who are 65 or older, disabled or have specific medical conditions. Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans) and Part D (prescription drug coverage). While Part A is usually free, you'll need to pay premiums for Parts B, C and D. You can enroll in Medicare three months before turning 65 or when you become eligible for Social Security disability benefits.
- Supplemental Nutrition Assistance Program (SNAP): This program helps low-income individuals and families buy food. The amount of SNAP benefits you receive depends on household size, income and expenses.
- Medicaid: This healthcare program for low-income individuals and families covers medical services such as doctor visits, hospital stays, prescriptions and long-term care. Each state has its own rules and eligibility criteria for Medicaid. You can apply for Medicaid at your local state or county office or online.
Disability Benefit to Retirement Benefit: Understanding the Transition
The transition from Social Security disability insurance (SSDI) to retirement benefits impacts your financial stability during retirement. While your disability benefits won't change when you turn 65, they'll seamlessly shift to retirement benefits, maintaining the same monthly amount. Considering your circumstances, including your health, financial needs and other available benefits, can help you decide when to claim Social Security benefits. Remember, other potential benefits such as SSI, Medicare, SNAP and Medicaid can provide further support during your golden years.
Frequently Asked Questions
What happens when you're on disability and turn 65?
If you’re getting Social Security disability insurance (SSDI) benefits, they’ll switch to retirement benefits once you hit your full retirement age, which is usually between 66 and 67 depending on when you were born. Your benefit amount should be the same unless you’re also getting workers’ compensation or other public disability benefits. Essentially, your disability benefits smoothly transition into retirement benefits without any change in the amount you receive.
Will my disability check amount change when I turn 65?
When you turn 65, your disability benefits won’t change unless you’re also getting workers’ compensation or other public disability benefits, which might reduce your SSDI payment. Your disability benefits keep going until you hit your full retirement age. After that, they switch to retirement benefits, but the amount stays the same.
At what age does Social Security stop doing disability reviews?
Social Security will stop reviewing your disability status when you reach your full retirement age, which is usually between 66 and 67, depending on when you were born. However, if your case is labeled as “medical improvement expected” or “medical improvement possible,” you might have more frequent reviews before reaching your full retirement age.
Does Social Security disability pay more than Social Security retirement?
The amount of your Social Security retirement benefits depends on when you start collecting them. If you start at age 62, you’ll get only 70% of your full retirement benefit, and your disability benefit will be higher than your early retirement benefit. But, if you wait until your full retirement age or later to collect retirement benefits, you’ll receive 100% or more of your full retirement benefit, which will be the same or higher than your disability benefit.