When you suffer an injury or develop a medical condition that leads to a severe disability that renders you incapable of working, applying for disability benefits from the Social Security Administration gives you a means of accessing essential funds. Your disability may continue until you reach retirement age, in which case you might continue receiving benefits up to that point. But what happens to your SSD benefits after that?
Transition from Disability to Retirement Benefits
The Social Security Administration operates two disability benefits programs, including Social Security Disability Insurance, which pays benefits from the Social Security system to workers who become unable to work due to a prolonged or permanent disability. When you reach full retirement age, your SSDI benefits automatically convert into regular retirement benefits.
In most cases, you will receive the same monthly payment after conversion. This conversion happens automatically – you don’t need to file paperwork to effect the conversion. Additionally, conversion of SSDI benefits to retirement benefits has the advantage of ensuring that you continue to receive your monthly payments even if your disability ends, since retirement benefits continue for life.
Impact on Supplemental Security Income
Unlike SSDI, Supplemental Security Income provides disability benefits to low-income individuals, rather than based on an individual’s contribution to the Social Security system. As a result, SSI benefits do not automatically convert once you reach full retirement age. However, when you qualify for Social Security retirement benefits, the amount of retirement benefits you receive can affect your SSI benefits. Social Security regulations treat Social Security retirement benefits as countable income, which means any retirement benefits you receive can offset your monthly SSI benefits or put you over the monthly income threshold for SSI eligibility.
Other Considerations During the Transition
Reaching full retirement age while receiving SSD benefits can have other implications for recipients. For example, if you’ve qualified for Medicare, you’ll continue to receive Medicare coverage when your SSDI benefits convert to retirement benefits. Furthermore, when you have family members who receive additional benefits based on your disability benefits, those family members’ benefits may also change. Moreover, the transition from SSDI to retirement benefits or changes in SSI benefit amounts can have tax implications or income reporting changes. Speak with your attorney or a tax professional to get a better understanding of the full scope of the possible tax implications.
Planning for the Change
Before you hit full retirement age, steps you can take to plan for the transition or change in your benefits include:
- Review your SSDI monthly benefit statements to estimate your retirement benefits, or your SSI monthly benefit statements to determine how potential retirement benefits may affect your SSI benefits.
- Keep copies of all benefit notices, including correspondence regarding changes to your SSDI or SSI benefits or eligibility for other benefits, such as Medicare or Medicaid.
- Speak to a tax advisor to understand how changes in your benefits may affect your reporting requirements or tax liability.
- Consult a Social Security disability attorney before retirement age to discuss what may happen to your Social Security disability benefits or eligibility for other benefits once you hit full retirement age.
Contact an SSD Lawyer Today
If you receive SSDI benefits, those benefits will convert into regular Social Security retirement benefits when you reach full retirement age, with no change in monthly benefit amounts. In contrast, the continuation of SSI benefits may depend on how any retirement benefits you qualify for affect your eligibility under the income rules. Contact Crowe & Shanahan today for a free, no-obligation consultation with a Social Security disability benefits attorney to learn about what happens to disability benefits when you reach retirement age.