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SSDI payments and retirement age

Many seniors look forward to retirement. It's a time where they can stop working and enjoy themselves and everything they have worked their entire lives for. They can travel, take up hobbies or spend time with friends and family. Additionally, once they reach age 66, Social Security can provide a boost in their income that provides some financial security.

However, for people who are receiving Social Security Disability Income, reaching retirement age can produce some anxiety. This is because at age 66, disability benefits convert to retirement benefits. Since retirement benefits are based on the amount of income a person has earned over 35 years, many disabled individuals fear that their payments could go down. This is because many people who have suffered with a disability for a long time may have a significantly reduced income or may not have even made it to the 35-year work history threshold.

In order to avoid creating a financial hardship for retirees who were receiving SSDI, the Social Security Administration has an exception to the 35-year rule for those who qualify for SSDI. Under this rule, if a person is receiving SSDI when the person reaches 66 years old, the person will continue to receive the same amount the person was receiving before. The funds will just come from a different source.

Additionally, people who received SSDI payments at one point, but have since returned to work, will also qualify for a "disability freeze" benefit. Under this rule, the SSA will not take the years with no income into account when determining the person's retirement benefits.

Understanding these benefits can be vital for seniors receiving SSDI. People need to make sure they continue to receive the benefits they need, even after they reach retirement age.

Source: Motley Fool, "Social Security Disability: What Happens When You Turn 66?," Dan Caplinger, Aug. 16, 2014


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