The good news is that the amount of your benefits will not change simply because of your age. However, there will be an automatic shift in how your benefits are categorized by the Social Security Administration (SSA). Understanding this transition can help you plan for your financial future and avoid unnecessary confusion.
Many people assume that 65 is the key milestone for retirement, but that is no longer the case. In 1983, Congress enacted a significant change to the Social Security system to extend its long-term stability. As part of this reform, Full Retirement Age (FRA) was gradually increased beyond 65, depending on the year of birth. Today, FRA ranges from 66 to 67 for individuals born in 1943 or later. (That group of people now includes everyone under the age of 82.)
So, if you are receiving SSDI, your disability benefits will automatically convert to Social Security retirement benefits once you reach your FRA, not necessarily at age 65.
Your SSDI Benefit Amount Will Stay the Same
The transition from SSDI to Social Security retirement benefits does not affect the amount of money you receive each month. SSDI is designed to provide you with the same monthly benefit as your full retirement benefit would be if you had reached FRA. When your benefits switch from disability to retirement, it is simply a change in classification. The SSA automatically processes this transition, and you do not need to take any action.
Since SSDI already provides the full retirement benefit amount, there is no reduction in payments when the switch occurs. For this reason, individuals who qualify for SSDI before reaching FRA generally receive a financial advantage. If you were to apply for Social Security retirement benefits early—such as at age 62—your benefit amount would be permanently reduced. However, SSDI recipients receive their full benefit amount without this reduction, making it a preferable option for those who qualify because of a disability.
The attorneys at the GCC Law Firm have extensive experience helping individuals understand the complexities of SSDI and Social Security retirement transitions. If you are unsure about how these changes may affect you, our team is prepared to guide you through every step of the process.
What Happens at Full Retirement Age?
Once you reach your full retirement age, the SSA automatically changes your benefits from SSDI to retirement benefits. This transition happens seamlessly, with no gaps or delays in payments. While your benefits will continue at the same amount, there are a few administrative differences you should know about:
- No More Disability Reviews: When receiving SSDI, the SSA periodically reviews your medical condition to confirm that you still meet the disability requirements. Once you reach FRA and your benefits switch to retirement, these reviews stop.
- Medicare Coverage Continues: If you have been receiving SSDI for at least two years before turning 65, you are likely already enrolled in Medicare. Regardless of whether or how long you were on disability, at age 65 you are eligible for Medicare benefits. Medicare benefits will continue, though you may have additional coverage options once you reach FRA.
- Work Incentives End: SSDI includes certain work incentives, such as trial work periods that allow you to test your ability to return to work. Once your benefits convert to retirement, these incentives no longer apply because retirement benefits are not tied to work capacity.
The Advantage of Applying for SSDI Before Full Retirement Age
If you have a qualifying disability and are approaching retirement age, applying for SSDI can be a smarter financial decision than simply filing for early retirement benefits. When you claim Social Security retirement benefits before reaching FRA, your reduced benefit is permanently reduced. The reduction can be as much as 30% if you begin receiving benefits at age 62 instead of waiting until your FRA.
By contrast, SSDI pays the full retirement benefit amount, allowing you to receive more money each month without a penalty. If your application is approved, you not only avoid the reduction in benefits but also gain access to Medicare earlier than you would with early retirement benefits. These factors make SSDI a better option for many individuals who qualify.
Filing for SSDI can be complex, but the experienced attorneys at the GCC Law Firm focus exclusively on helping disabled individuals win their Social Security claims. We understand the process inside and out, and we are committed to securing the benefits our clients deserve.
What If You Are Receiving Supplemental Security Income (SSI)?
SSI is different from SSDI because it is a needs-based program for individuals with limited income and resources. If you receive SSI, turning 65 may change how your benefits are calculated. At 65, you may qualify for SSI under the aged category rather than the disability category. However, the overall eligibility requirements—such as income and resource limits—will still apply.
Additionally, if you receive both SSDI and SSI, your SSI benefits may be adjusted when your SSDI converts to retirement benefits. This is because SSI benefits are based on financial need, and any changes in other income sources can impact the amount you receive.
Planning for Your Transition
If you are currently receiving SSDI, there is no need to worry about a decrease in benefits when you reach 65 or FRA. Your benefits will continue at the same amount, just under a different classification. The key takeaway, as we stated above, is that SSDI already provides the full retirement benefit, ensuring that you do not face the reductions that come with claiming retirement benefits early.
If you are not yet receiving SSDI but have a disabling condition that prevents you from working, you should seriously consider applying for disability benefits before you reach retirement age. This will provide you with monthly payments equal to your full retirement benefits earlier than you would otherwise have qualified. And there is no benefit reduction applied, even if you are well short of your full retirement age.
Understanding these rules can help you make informed decisions about your Social Security benefits. If you have questions about your eligibility, filing an SSDI claim, or how your benefits might be affected by age, GCC Law Firm is ready to assist you. With a strong focus on disability law and a commitment to helping disabled individuals navigate Social Security complexities, our attorneys will work tirelessly to secure the benefits you need. Contact us today to learn how we can help.