If you worked long enough to qualify for retirement benefits through the Social Security Administration, a disability that prevents you from working before you are old enough to retire may allow you to qualify for Social Security disability benefits. You’re probably reading this because you have questions about disability benefits, including when does SSD convert to regular Social Security?
You want to get all of the benefits that are available to you, so the information provided in this article covers common issues you may encounter with SSD and retirement benefits, including the age you’ll be when your SSD convert into regular Social Security retirement. Additional information about your benefits is available from the disability advocates at London Eligibility.
What Happens to Social Security Disability Benefits At Retirement Age?
The discussion about disability benefits converting has to begin by distinguishing between the Social Security Disability Insurance program and Supplemental Security Income. Although these two programs pay disability benefits, only SSDI converts when you reach retirement age. SSI benefits continue although you may see a reduction in the monthly SSI payment that you receive if you also qualify for Social Security retirement without previously receiving SSDI.
SSI is a need-based program for people with little or no income or assets to rely upon to pay for necessities, such as food and housing. If you receive other income, such as SSDI or Social Security retirement, your monthly SSI benefit may be reduced depending on how much other income you receive.
If you qualify for SSDI with a medically determinable physical or mental health impairment that prevents you from working and is expected to last for at least 12 months disability, your SSDI benefits automatically convert to retirement benefits when you reach your Social Security retirement age.
You do not have to notify Social Security or do anything else for the SSDI payments to stop and retirement benefits to begin without any interruption in monthly payments. As a general rule, the amount that you received each month as SSDI should remain the same after the conversion. In fact, your retirement benefit may actually be more than your disability payment. This happens when you were receiving public benefit payments, such as workers’ compensation, while receiving SSDI.
The Social Security Administration reduces SSDI benefits by workers’ compensation and other public benefit payments that you receive, but the offset does not apply to retirement benefits. Once your monthly SSD convert in regular course of reaching retirement age, removal of the offset causes your retirement benefit to be greater than you got as your monthly SSDI.
When Does SSD Convert to Regular Social Security?
A common misconception about Social Security retirement is that benefits begin when you reach age 65, which is the age you must be to qualify for Medicare coverage. The age when you are entitled to receive full retirement benefits is 67 for anyone born in 1960 or later. If you were born before 1960, you can look up your full retirement age online.
If you receive SSDI payments and were born in 1960, you will continue receiving disability benefits as long as you are disabled and otherwise eligible until you reach age 67 in 2027. However, you could qualify now for early retirement.
Early retirement is available at age 62, but it comes at a cost. Taking early retirement could have the following consequences:
- Monthly retirement benefits can be as much as 30% less from what you would receive by waiting until full retirement age.
- If you stop working when you take early retirement, it reduces your Social Security benefits because retirement benefits are computed based, in part, on your lifetime earnings.
- When you wait until full retirement age to apply for Social Security retirement benefits, there is no restriction on the amount of income you may have from full-time or part-time work as there is with early retirement.
Working while receiving early retirement benefits can be problematic if you earn more than the annual earnings limit. The earnings limit for 2023 is $21,240, and there is a $1 deduction from your Social Security payments for each $2 in earnings in excess of the annual earnings limit.
The earnings limit is different if you reach full retirement age during the year. For example, if you reach full retirement age in 2023, the earnings limit for you is $56,520 with a $1 benefit deduction for each $3 that you go over the earnings limit.
If you have health issues that prevent you from continuing to work and are too young for full retirement benefits, talk to a disability advocate before taking early retirement benefits. SSDI benefits are equal to what you would receive at full retirement age without the benefit reduction associated with early retirement.
Learn More from A Disability Advocate
The disability advocates at London Eligibility have answers to questions you have about SSI, SSDI, and disability benefits in general. Contact us today to schedule a free consultation and claim review.