Recently on our disability forum a user asked, “I am about to be 65 years old. I have been on Social Security Disability Insurance (SSDI) for several years. I am curious what happens when I reach retirement? Do I get my retirement benefits? Do I get less? What happens to my disability benefits?”
Understanding your retirement age and retirement benefits
Disability benefits are paid to claimants who have a severe health condition which does not allow them to work for at least 12 continuous months. If you have been receiving SSDI benefits this means that the SSA determined you were disabled, you had enough work credits to be considered insured, and you were not able to work.
Now, you did not mention this, but the first thing to consider when you are nearing retirement age is what is really considered your “full retirement age.” In fact, only those born in 1937 or earlier will actually reach their full retirement age at age 65.
For other seniors, the full retirement age has been staggered based on their date of birth. For example, those born in 1938 will not reach full retirement age until 65 and two months. For most of us, however, we will not reach full retirement age until age 67.
What will happen to my SSDI benefits at full retirement age?
So, what happens to your Social Security Disability Insurance benefits after you reach your full retirement age? SSDI benefits will stop, and the SSA will start paying you SSA retirement benefits.
The good news, however, is that you will not notice the change. In fact, the transition should be seamless for you. The SSA will simply start funding your benefits from a different fund. The payment should be the same.
Benefits of receiving SSA retirement benefits
Now, we should mention one small benefit that may be nice for some seniors. Disability beneficiaries who receive SSDI benefits cannot make too much money or work too many hours without jeopardizing their benefits.
Retirement benefits, however, do not have any limitations on earnings. Not sure why you might want to do this, but some disability claimants who have been itching to get back out there into the workforce will have the opportunity to return to work part-time after they start receiving retirement benefits. This change will allow them to increase their monthly income without the risk of losing their monthly retirement benefit.
Should I apply for disability benefits or for early retirement benefits?
Claimants who are aged 62 or older and who cannot work have several options: apply for early retirement benefits or apply for SSDI benefits. Both benefits have some pros and cons. For example, SSDI benefits may be higher than early retirement benefits. If you were to apply for SSDI and win benefits, your benefit payout would be higher.
On the other hand, SSA retirement benefits, assuming you have adequate work credits, are a guaranteed benefit. You will not have to wait months to be approved. Instead, you simply notify the SSA that you would like to take early retirement.