Maximize Your Disability Income When Nearing Retirement Age

retirement age

Just because you are nearing retirement age doesn’t mean you can’t apply for Social Security disability (SSD) benefits now. According to the Social Security Administration (SSA), your Social Security disability income will continue if your medical condition doesn’t improve and you are unable to work. One of the most frequently asked questions is: “Will my Social Security disability income change when I reach full retirement age?”

What Qualifies as Retirement Age to the SSA?

According to the SSA, your Social Security disability income continues until you reach full retirement age, which is when they automatically convert to retirement payments. The SSA determines a person’s full retirement age, or normal retirement age, by when he or she was born, as the retirement age rises from 65 for those born after 1959. Yet, according to Laurence Kotlikoff, professor of economics at Boston University and an active columnist about Social Security Disability benefits, it’s not that simple. SSA’s treatment of disabled workers changes once they reach 62, which is also called the early retirement age.

Years You May Continue To Collect Disability Income

Kotlikoff, in his column for the Public Broadcasting Service, says disabled people can receive more benefits from when they reach 62 years of age until they reach their full retirement age. He says disabled people can, essentially, receive their full retirement benefits four or five years before they reach full retirement age. Kotlikoff used a theoretical example of a disabled person about to turn 62 called Joe.

“First, Joe can continue to collect his disability benefit through full retirement age (66 in Joe’s case) with no reduction in the amount,” Kotlikoff writes. “In contrast, non-disabled workers who apply for their Social Security retirement benefits between age 62 and their full retirement age are forced to take permanently reduced benefits […] So disabled workers are, in effect, given their full retirement benefit starting four, gradually rising to five, years before they reach full retirement age. That’s 25% more than the non-disabled can get.”

According to Kotlikoff, those who receive Social Security disability benefits or are thinking about applying need to be careful, however. That’s because there are also features for excess spousal benefits and for withdrawing from automatically converting disability income to retirement benefits. How much a disabled person can collect all depends on a person’s special circumstances, so it is best to have an experienced Social Security attorney on your side if you are near 62 years of age and are considering applying for Social Security disability benefits.

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