Specifically, will SSDI stop when you get Social Security?
If youre nearing retirement age, those fears may become more pronounced.
So what exactly happens to your SSDI when you reach retirement age?
The good news is you wont lose those monthly checks.
Read on to learn what happens to Social Security disability when you retire.
Essentially, SSDI benefits follow a similar formula as the one used forSocial Security retirement benefits.
(In Social Security jargon, primary insurance amount means 100% of your retirement benefit.)
Retirement benefits are calculated using your highest 35 years of earnings.
Disability benefits are based on your average earnings before you became unable to work.
In a nutshell, Social Security calculates your disability benefit as if youd reached full retirement age.
Thats when you get your primary insurance amount, or 100% of your benefit.
For anyone born in 1960 or later,full retirement ageis 67.
So lets say you become disabled at 55.
Social Security would still give you the benefit youd normally get at full retirement age.
Your earnings tend to rise over time, so disabled workers often miss out on those higher-earning years.
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Will SSDI Stop When You Get Social Security?
When you reach full retirement age, your disability benefit will automatically convert to your retirement benefits.
Since youre already getting your full retirement benefit, typically your monthly checks will be for the same amount.
But a lot of people take retirement benefits long before their full retirement age.
Youre eligible for Social Security retirement benefitsas early as age 62, though you get a reduced amount.
Because youre already getting your full benefit, your monthly checks would shrink.
Suppose you start benefits at 62 but continueworking while collecting Social Security.
Then you become ill at age 64.
If your disability claim is approved, your benefit would increase to your full retirement benefit.
Then, if their disability claim is approved, theyll switch to the higher amount.
Be cautious about pursuing this strategy, though.
If your claim is denied, youll have to live off of a permanently reduced benefit.
Its a good idea to talk to a Social Security attorney before you proceed.
Can You Collect SSDI and Social Security at the Same Time?
Most of the time, these two benefits will be the same.
But there are a few circumstances where one benefit could be higher than the other.
For example, if you receive workers compensation, youll often qualify for less money from SSDI.
In that case, you could expect to receive more from your retirement benefit.
Can You Increase Your Social Security Benefit When You Reach Retirement Age?
This applies whether you were already receiving benefits or if your SSDI converted to retirement benefits.
Youll earn 8% retirement credits for each year you delay.
Then your benefit will max out at age 70.
Suppose youre receiving disability payments of $2,000 per month and you turn 67, your full retirement age.
You call Social Security and voluntarily suspend your benefit.
When you reinstate your benefits one year later, youd get $2,160 a month, plus anycost-of-living adjustment.
Youd have the same option if youre already taking retirement benefits.
Once you reach full retirement age, the rules about working get a lot more flexible.
Social Security also wont withhold a portion of your retirement benefits if you work past full retirement age.
Chances are, this will be a non-event for you.
Your check amount will stay the same, and you wont be any better or worse off from it.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
She writes the Dear Penny personal finance advice column.
Send your tricky money questions to[email protected].
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