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Understanding the Impact of SSDI on Retirement Benefits

Understanding the Impact of SSDI on Retirement Benefits

 If you have a disability, you may be worried about how collecting Social Security Disability benefits may impact you in the future. Will it have an impact on my ability to request Social Security retirement benefits? Does receiving SSD benefits now affect the amount of retirement benefits I will eventually receive?

People who meet the SSA's definition of a disability—a physical or mental health issue that prevents one from working and engaging in Substantial Gainful Activity (SGA)—are granted SSDI benefits. The qualifying condition also had to have persisted or be anticipated to have lasted for at least one (1) year (or, failing that, to end in that person's death).

What Sets Disability Benefits Apart from Retirement Benefits?

Retirement benefits and Social Security Disability Insurance (SSDI) are both paid from the Social Security Fund, although they are given to people under different conditions.

Those with enough work credits who become disabled to the point where they are unable to work and whose disability has lasted or is anticipated to last at least one year or results in death are paid SSDI benefits. When someone becomes handicapped, they can apply for SSDI at any age as long as they have a sufficient number of work credits.

Once an employee reaches the retirement age of 62, retirement benefits are paid. However, employees can maximise their payments by delaying retirement benefits until age 70, or they can increase their benefit to a 100% benefit by waiting until full retirement age to start receiving retirement benefits. At the age of 70, all Social Security beneficiaries who are eligible must begin receiving retirement payments.

Can I get Social Security retirement and disability benefits?

Retirement benefits and SSDI are not paid together. Instead, those who are approved for SSDI benefits will typically receive payments that are on par with what they would have at full retirement age. Your lifetime earnings are taken into account when determining this benefit.

You typically cannot receive disability payments if you have previously received retirement benefits since you have already left your job. The difference between your full retirement benefit and the early retirement you got may be paid to you as a disability benefit, though, if you took early retirement and can demonstrate that you did so owing to a qualifying disability.

Is It Better to Retire Early or Go on Disability?​

Depending on your particular situation, you may want to choose between taking an early retirement and requesting disability compensation. You might choose to accept early retirement benefits if you've achieved the retirement age eligibility threshold rather than going through the far more challenging procedure of filing for Social Security disability benefits.

That might be a more appealing choice if you have other sources of retirement income, such as pension benefits, annuities, or retirement investment accounts, and you won't need the full or maximum retirement benefit.

Nevertheless, depending on your financial situation, it might make more sense to apply for disability benefits as opposed to delaying retirement until retirement age or applying for retirement at age 70 in order to receive maximum benefits.

When I reach retirement age, what happens to my disability benefits?
When you reach full retirement age if you have been granted SSDI benefits, your disability benefits will immediately change into a retirement benefit. Your entire retirement age is determined by the year of your birth. People who were born later can retire earlier.
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Friday, 02 June 2023