Disability vs SS

[jkforrest]

Cliffnotes version: will be 66 in Sept. been on disability since 1991. Hubby is currently 56. After 21 yr with same co, he was laid off in 2008. Worked some in 2010. Out again and just started full time last Sept. We used ALL our 401 to stay in our home.

We really need to bldg back the 401K or IRA for his retirement however, due to breaks he says he won't ever be able to retire and he may be correct.

Will I need to do anything before they change me from disability to SS, can I collect both (from what I've read it doesn't seem so). I read here that I would make which ever was the highest amount. Where can I locate that information.

Last question: should I wait till after I turn 66 to look for part time employment (there is NO WAY I can do full time) or can I start looking now? Plus the OCT deadline for enrollment changes for medicare will be affected in what way due to any changes in Sept?

[MSW1963]

We used ALL our 401 to stay in our home.

That doesn't sound unusual. Between loss of income from the tanked economy, underwater? mortgates, disability, and/or soring medical bills, many people have found themselves in the same situation.

We really need to bldg back the 401K or IRA for his retirement however, due to breaks he says he won't ever be able to retire and he may be correct.

Many baby boomers are in a similar financial situation, due to any/all of the above, illness, job losses, medical bills, underwater mortages, etc. Sorry to say that probably more than a few BBoomers will work till they die.

I also think the traditional pension plan may have gone the way of the typewriter. Considering the fees charged for 401k's, the only people who will be able to afford to retire at a reasonable age are the plan administrators earning huge bonuses.

Will I need to do anything before they change me from disability to SS, can I collect both (from what I've read it doesn't seem so). I read here that I would make which ever was the highest amount. Where can I locate that information.

SSA should notify you when you reach SS retirement age. It is typically a status change that does't require action on your part, unless SSA states otherwise when notifying you of your status change from SSDI/SSI to retirement age SS retirement eligibliliety.

Typically, the benefit amount remains unchanged based on status changes from SSDI to SS retirement benefits.

SSA has an 800 number you can call for info about your status change.

Best of luck and take care.

[MSer102]

Will I need to do anything before they change me from disability to SS, can I collect both (from what I've read it doesn't seem so). I read here that I would make which ever was the highest amount. Where can I locate that information.

From everything I've read and heard from an SS representative, the change is basically administrative on the SS end and you don't need to do anything. Your Medicare shouldn't change either. You can confirm that by calling SS. In fact, if you'll be 66 in only 2 months, I'm surprised you haven't already heard from them about the change.

It might help to think of your SSDI/SS this way. Your SSDI benefits are your retirement benefits that you were allowed to start collecting 20+ years early because you were forced to stop working because of disability. And because it's paid out earlier than full retirement age there are some restrictions involved that regular retirement at full retirement age doesn't have.

A lot of people think that SSDI is some kind of consolation prize that disabled people get just because they became disabled. That isn't true. SSDI is "early retirement" money that a person gets to replace lost income because they can't work anymore. That's an important difference. And that's why people who haven't worked for 5 of the 10 years before disability aren't eligible for SSDI. If they weren't working before disability they weren't making an income, so there's no income to replace.

It's also why there are income restriction on SSDI. If a person can work enough to make a living, they're making income that doesn't need to be replaced by SSDI. So SSDI starts being reduced as income goes up, to the point that a person might be determined to be able to work instead of disabled. This is important for another reason I'll get to in a minute.

When you qualified for SSDI (kind of "early retirement") your benefit was calculated based on what you would have received if you had reached full retirement age and retired on that date instead of becoming disabled. So you are already receiving the highest amount of "retirement" money you are ever going to get from your own SS account. You've already been "retired" so you are not going to receive a higher amount when you reach full retirement age. As far as SSDI is concerned, you already have been at "full retirement age" for a long time. You can't get any "fuller".

Also remember that SSDI is already like "retirement". It isn't something extra just for being disabled, so it can't be "added on" to a retirement benefit. You can't collect both.

SSDI allows you to make up to about $1000 per month without having your SSDI reduced or raising questions about your disability status. If you can only work part time and your income doesn't exceed that amount, you can start working right now under SSDI. If your are going to turn 66 in only 2 months I can't imagine how this could possible be an issue for you. If you have any questions about that you can call SS and talk to a representative.

When you reach full retirement age you'll be converted to actual retirement status and the income restriction goes away. That's because when you reach retirement age the benefit isn't being paid to replace lost income because you can't work. It's truly a retirement benefit and the money isn't based on your ability to work. It's being paid because you are old enough to stop working and SS assumes that you would stop working at that age. It's paid because of age, not income, so you can make as much money as you want to without your benefit amount being reduced.

This also goes back to what I said before about SSDI replacing lost income. When a person reaches full retirement age, the structure of SS assumes that the person would retire at that age and not work anymore. If they aren't working anymore because of age they aren't "disabled" and unable to work. The question of ability to work doesn't apply anymore when the person isn't working anymore anyway.

So at full retirement age, SS no longer recognizes "disability". The category of "disabled" doesn't exist anymore. That's why SSDI stops at full retirement age and the disabled person is changed to the category of "retired". That's why a person can't collect both SSDI and a retirement benefit. At full retirement age they aren't considered disabled anymore. They're "retired".

My late husband became physically "disabled" after he retired, but that wasn't an issue with his SS because he was already retired. He already wasn't working due to retirement so there was no lost income from disability to replace so no SSDI. And really, isn't it just part of life that so many people develop infirmities in their older years after they've retired that make them physically "disabled"? They don't qualify for extra SS money because of it.

As I said before you are already getting the maximum retirement benefit you can claim under your own SS account. The only way for you to possibly qualify for a higher amount is if your benefit as a spouse on your husband's SS account is higher than your own. But you can't qualify for that until he reaches his full retirement age, which is somewhere around 66-1/2, or unless he dies or becomes disabled (given disability status and awarded SSDI) before then.

I don't know of any exceptions to any of this but there might be. If you have any questions you should call SS and get the answers directly from them.

[jkforrest]

Wow thanks so much

I wish you would be writing the government regulations as I could understand exactly what you were explaining.

It was complete, concise and very clear. Thanks you for going into such great detail to explain something than can be quite confusing if you listen to several people and then TRY to read the literature on line.

Thanks for your extra time and the concise answer it was great!!!!!!

[gomer]

I just went thru this a few years ago.

I landed on SSDI in my late 30s. When I reached RETIREMENT age the only thing that changed was from SSDI to retirement status. The amount and everything else stayed the same. I did not have to do anything or change anything.

Gomer Sir Falls-a-lot