Continuing to receive Social Security Disability Insurance (SSDI) benefits depends on whether you remain disabled or if your condition improves.
If you receive SSDI benefits, Social Security will periodically conduct a review of your case file to ensure that you still qualify. If your disability might improve, this review happens about every three years. If the expectation is that your disability will not improve, this review happens every seven years.
Suppose your case review finds that your medical condition has not improved sufficiently to allow you to work. In that case, your social security disability benefits will continue until you reach full retirement age. Your full retirement age is when you are 65 to 67 years old, depending on your birth year.
However, if your case review finds that your medical condition improved sufficiently to allow you to perform regular work, then the social security disability payments will stop. If you disagree with the conclusion of your case review, you have the right to appeal the decision.
Here are some frequently asked questions about Social Security disability benefits and retirement:
What is the difference between SSDI and SSI?
Sometimes these two programs, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), are confused with each other. They are both managed by the Social Security Administration, yet are different programs.
Occasionally, you may also see the use of SSI to represent ordinary Social Security income. This alternative use of the acronym is another source of confusion because Social Security income is retirement income. In contrast, Supplemental Security Income is for those with limited resources, not solely retirement income.
Social Security Disability Insurance (SSDI) is an insurance program paid for by the payroll tax deductions for Social Security. The current Social Security tax rate for 2022 is 6.2% paid by the employer and 6.2% paid by the employee, equaling a total of 12.4%. If you have Social Security taxes withheld from your earned income, you will have this insurance coverage.
SSDI payments require SSA approval of disability status, and the amount paid depends on your work history. If you become disabled and qualify for SSDI, you will receive monthly payments that are the same amount as you would get if you were already at full retirement age.
Supplemental Security Income (SSI) is based on age OR disability and having very limited income and financial resources. SSI does not depend on any work history.
Is it possible to get SSDI and SSI at the same time?
Yes, it is possible to receive payments from both programs if the amounts of both are small enough. SSDI payments cause a reduction in the amount of SSI. If the SSDI payments you receive are high enough, this can disqualify you from getting SSI payments.
SSDI payments are, on average, higher than SSI payments. SSDI payments do not depend on having limited financial resources.
Here are the main differences between SSI and SSDI:
- Eligibility: SSI is available for those 65 or older with or without a disability and at any age for those who are blind or disabled with no work history requirement. SSDI is available for those who are disabled and have sufficient work history to qualify.
- Average Monthly Benefits: SSI payments in 2022, average $604 per month (maximum is $841 for an individual and $1261 for a couple). SSDI payments in 2022, average $1,358 per month with a maximum of $3,345 per month.
- Financial Limits: SSI requires having very limited financial resources (under $2,000 for an individual and $3,000 for a couple) and unearned/earned income limits. For example, under $861 per month for unearned income for an individual and $1,281 for a couple. Higher amounts are allowed under the SSI program for countable earned income. SSDI does not have financial resource limits but has an earned income limit in 2022 of $1,350 per month for those who are disabled but not blind and $2,260 per month for those who are blind.
If you are 65 or older with very limited resources and income, you may qualify for SSI payments without needing to be disabled. You may also be eligible for Medicaid health insurance coverage and the Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps.” Some states supplement the SSI payments to pay higher amounts than the federal payments.
When is the full retirement age for me?
Full retirement age (FRA) increased by law in 1983 from 65 years old up to a maximum of 67 years old now.
FRA depends on the year of your birth, according to this chart:
|Year of Birth||Full Retirement Age|
|1938||65 and two months|
|1939||65 and four months|
|1940||65 and six months|
|1941||65 and eight months|
|1942||65 and ten months|
|1943 to 1954||66|
|1955||66 and two months|
|1956||66 and four months|
|1957||66 and six months|
|1958||66 and eight months|
|1959||66 and ten months|
|1960 and later||67|
The Social Security Administration has a useful online tool to calculate your full retirement age.
How about Medicare at age 65?
When you reach 65, that is still the same year you qualify for Medicare. Be sure to apply for Medicare when you turn 65 to avoid paying the penalty to join later. Medicare Part A is free, and you have options to consider about paying an insurance premium to get Medicare Part B. You may want to consider paid supplemental insurance such as Medicare Advantage programs.
Will my disability payment increase if my disability gets worse as I get older?
No. Your monthly SSDI payment does not change if your condition becomes worse. The benefits are calculated based on your earnings history. The amount of disability payment is the amount you would receive if you were at full retirement age when you became disabled.
The Social Security Administration (SSA) approves a disability claim based on your inability to perform work due to a disability expected to last 12 months or longer or result in death. Approval of disability status is the same as being fully disabled, even if your condition subsequently deteriorates more.
If your condition improves, you must inform the SSA, especially if you can go back to work. You must also undergo a case review about every three years for a disability that might improve and about every seven years for a permanent disability. Losing disability status means your monthly SSDI payments will stop.
What happens with my SSDI when I hit full retirement age?
If you still qualify as disabled, your disability benefits automatically convert to retirement benefits when you reach full retirement age. You need to do nothing as this process happens internally in the Social Security Administration’s system.
Will full retirement age change my benefit amount?
Social Security benefits from disability insurance calculations have the same basis as if the disabled person reached full retirement age when they became disabled. If you become disabled when younger than full retirement age, you can think of this Social Security disability payment as equal to early retirement with full Social Security benefits.
When you reach full retirement age, you qualify for 100% of the retirement benefits even if you are not disabled as long as you have sufficient work history.
Usually, you do not see any change when the SSDI benefits convert to retirement benefits when you reach full retirement age.
It is helpful to check your work history record and see your Social Security deductions taken from your paychecks (and matched by your employer) for each year you earned income. You can do this easily by getting an online MySocialSecurity account.
The same applies to your spouse receiving benefits based on your work record. Those benefits automatically change from disability to retirement benefits when you reach full retirement age. However, if your spouse takes these benefits before your spouse reaches full retirement age, their benefits are lower.
It is helpful to work with a financial professional who understands the Social Security rules to make the best decisions about when to take retirement benefits if you (or your spouse, if you have one) qualify for them.
There is one exception. The exception applies if, in addition to receiving disability benefits, you also receive worker’s compensation payments or another government payment such as public disability benefits from a government job.
Since you do not pay social security taxes on these other disability payments, your disability benefits from Social Security are reduced by them. This reduction ends at full retirement age, so your total benefits would increase when you reach your full Social Security retirement age.
Can I increase my benefits when I reach retirement age?
If you reach retirement age and are still collecting Social Security benefits by receiving SSDI, your benefits cannot increase by taking any action on your part. Your SSDI monthly benefits covert to a retirement benefit for the same amount.
Another automatic change happens if you receive worker’s compensation or public disability benefits from a government job. Before reaching full retirement age, those payments reduce your SSDI benefits. After full retirement age, those reductions are not necessary, so your total monthly benefit payments would increase.
Can I work if I receive SSDI benefits?
When you collect social security disability payments, any earned income may reduce the amount of your monthly benefits. However, when you reach full retirement age, you are no longer hindered by limits on your earned income. After reaching full retirement age, any amount you make from working does not lower your monthly Social Security benefits.
What happens to my benefits when I reach retirement age if I return to work?
If you can work before the full retirement age, there is a possibility of increasing your Social Security retirement benefits. This increase may happen if your earnings improve your Social Security monthly benefits calculations.
The Social Security Administration has a free, voluntary Ticket to Work program that helps disabled people who want to find work. Under this program, it may be possible to test your ability to work for up to nine months without reducing your SSDI benefits.
What’s required for me to make the transition to full retirement?
Transitioning from receiving Social Security disability insurance payment to collecting Social Security retirement benefits is automatic when you reach full retirement age.
Your monthly benefit payments will not change; however, you will no longer be subject to any of the rules for SSI disability payments. You will not need to have any further case reviews after reaching full retirement age. You will still get your monthly payments when you reach retirement age, even if your disability improves.
What about SSD and early retirement?
You cannot take early retirement at age 62 if you receive Social Security disability payments. You would not want to do this because your early retirement payment would be up to 30% lower than the SSDI monthly benefits, which come from the rate calculated for your full retirement payments.
You might only consider changing to early retirement pay if you lose disability status. If you lose your disabled status at age 62, you would have the option to request early retirement payments from Social Security if you qualify for them. Losing your disabled status from a case review at age 62 would be a valid reason to consider early retirement.
Your monthly check from early retirement would be lower than the amount you receive as disability benefits; however, this might be preferable to not receiving any payments. In this circumstance, you would also have the option to wait until full retirement age to receive all your benefits that match the disability payment amount you were getting before you lost your disability status. That wait may be many years.
Additionally, you have the option to delay receiving benefits to age 70 to receive an increased monthly payment from Social Security. Depending on your year of birth, your retirement benefits payments may increase by up to 32% above the full retirement pay. It may be helpful to work with a financial professional to understand these options. The best choice for you depends on your particular circumstances.
How does early retirement impact spousal benefits?
Social Security disability payments come from the amounts projected for your full retirement age. A spousal benefit paid out based on your work history record is not automatically upgraded to the level paid at full retirement age.
If your spouse applies for the spousal benefit before the spouse reaches full retirement age, then benefits will be based on the early retirement amount (up to 30% lower), which is a permanent reduction.
Can I switch from Social Security retirement benefits to Social Security disability benefits?
Yes, it is possible to switch from Social Security retirement benefits to Social Security disability benefits under certain circumstances. Suppose you filed for early retirement benefits and started receiving Social Security payments when you were only 62. Then, you became disabled.
Since you are not yet full retirement age, you may receive a higher payment if you are qualified as disabled. The difference is that disability payments would be at your full retirement age, which are up to 30% higher than early retirement payments.
In this special circumstance, it is worth evaluating if you should apply for disability for the few years between the early retirement age of 62 and your full retirement age based on your birth year that could be from 65 to 67 years old.
If you retire early and then later realize that a medical condition qualifies you for disability benefits, it is possible to claim disability payments retroactively.
Disability claims may take many months, sometimes years, for approval and might face denial. You may want to apply for early retirement benefits while waiting for your disability claim to be approved or denied to have some Social Security income in the meantime.
It is also wise to consider working with a disability attorney for a complex case. A Social Security disability attorney is a specialist in working with Social Security benefits. A disability lawyer may help if your disability claim faces a denial and the decision needs an appeal.
The rules regarding Social Security disability benefits are complex and constantly changing. It is helpful to work with a financial professional who understands the current regulations and check with the Social Security Administration website for the most recent information about Social Security disability benefits.