Social Security Disability Rules If You Are Age 60 Or Older
If you are in the 60-64 age range, then you may qualify for SSDI or SSI if:
- You are limited to no more than light work and do not have specific skills that transfer to other skilled or semiskilled light work that is similar to your past jobs.
- You are capable of medium work but have limited education and no work history or a history of unskilled work.
Here is how the SSA defines these terms:
- A job is similar to your past work if it uses the same types of tools and work processes, and is in the same work setting or industry.
- Light work is defined as a job that involves lifting no more than 20 pounds at a time with frequent lifting or carrying of items weighing up to 10 pounds. A job is also considered light if it requires a lot of walking or standing, or it it involves sitting with frequent pushing and pulling of arm or leg controls.
- Medium work is work that requires you to stand and walk for up to 6 hours in an 8 hour day and to lift or carry 50 lbs occasionally and 25 lbs frequently.
- Unskilled work is work that requires little or no judgment, can be learned in 30 days or less, and is completed with just a few steps.
- Semiskilled work is work that requires you to have some skills but not to perform complex work duties. You may have to stay alert and pay close attention, or even inspect goods and other items. You may also have to move your feet quickly to perform repetitive tasks.
Can You Collect Social Security Retirement And Disability At The Same Time
In most cases, you cannot collect Social Security retirement and Social Security Disability Insurance at the same time. You may, however, qualify for Supplemental Security Income if you meet the strict financial criteria while drawing either Social Security retirement or SSDI benefits.
The Social Security Administration created the SSDI program to bridge the gap between when someone must leave the workforce due to a disability and when they can draw retirement benefits. For this reason, there is only one way to collect both retirement and SSDI at the same time.
Claiming Social Security After Your Full Retirement Age Increases Benefits
You can also wait as late as age 70 to start collecting Social Security benefits. Doing so boosts your retirement benefits. Theres no incentive to wait after age 70 to claim Social Security.
Heres how your benefit will increase if you wait to claim Social Security:
- If you delay claiming until age 68, your benefit will increase by 8%
- If you delay claiming until age 69, your benefit will increase by 16%
- If you delay claiming Social Security until age 70, your benefit will increase by 24%
Using this example, if you were eligible for a Social Security retirement benefit of $1,000 per month at your full retirement age of 67, the benefit would increase to $1,080 if you delay claiming until age 68 $1,160 if you delay to age 69 and $1,240 if you delay to age 70.
Once again, the delayed retirement credits accrue monthly, not annually, so every month you wait beyond age 67 will net you a slightly bigger monthly check from Social Security.
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What Do Federal Laws And Regulations Say About Age And Disability
The Social Security Administration discusses age as a vocational factor in disability claims in its regulations and internal policy documents.
Code of Federal Regulations Section 404.1563 states, in part:
We will not consider your ability to adjust to other work on the basis of your age alone. In determining the extent to which age affects a persons ability to adjust to other work, we consider advancing age to be an increasingly limiting factor in the persons ability to make such an adjustment, as we explain in paragraphs through of this section.
Commentary published with the SSAs Medical-Vocational Guidelines, also called the Grid Rules, provides additional insight:
Where age is critical to a decision, recognition is taken of increasing physiological deterioration in the senses, joints, eye-hand coordination, reflexes, thinking processes, etc., which diminish a severely impaired persons aptitude for new learning and adaptation to new jobs.
Put a different way: The Social Security Administration thinks that the younger you are, the more likely it is that you can acquire new job skills, adapt to new work, and compete with other job applicants even though you have a severe medical impairment. And the older you are, the more likely it is that you will have difficulty adjusting to new work, picking up new skills, and competing with other people when you have a severe medical impairment or combination of impairments.
Hone In On Your Expenses
Estimating your expenses in retirement is difficult and some investors actually overestimate retirement spending needs. Whether or not you’re financially able to retire is more about your expenses than your savings. Put another way, what you’re going to spend drives how much you’ll need saved so you don’t run out of money.
Here’s a simple example:
If your portfolio is $2,000,000 and you need to take out $100,000 per year , you’ll run out of money when you’re 84 assuming a 6% annual return. But if you only needed $80,000/year instead, your income could last until age 96.
If your lifestyle is relatively inexpensive, retiring at 55 may not be terribly challenging. But being able to retire early gets harder as lifestyle inflation takes over.
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Does It Matter Where I Fall Within The Age Category
Disability claimants within each age category are treated similarly in most cases.
For example, a 25-year old disability claimant is treated the same as a person who is 45 years of age. And a 50-year old disability claimant is treated the same as a 53-year old.
Because of where the SSA draws the line on age categories and how important the difference in age categories is to how your disability claim is evaluated, ages 50 and 55 are considered the most important birthdays for SSDI and SSI applicants.
Examples Of Using The Grid
Here are examples of when a person aged 55-59 can be approved based on the grids.
In one case, a 57-year-old woman applied for disability based her diabetes. She had a high school education but hadn’t worked for 25 years. The SSA determined that the claimant had the RFC to perform sedentary work only. The grids directed a finding of disabled and the claimant was approved.
- In another case, a 56-year-old man applied for disability because of mild emphysema. He had an 10th grade education and had worked his whole life as a waterman. The SSA found that despite his emphysema, he still had the RFC to do light work, but he had no transferable skills. The claimant was approved under the grids.
Here are some examples of when a person of “advanced age” would be found not disabled:
- In one case, a 55-year-old man filed for disability based on arthritis in both knees. He had a college education, and his past work was as a hotel manager. The SSA determined he had the RFC to perform sedentary work. The SSA also determined that the claimant had transferable skills, including the ability to manage groups and interact with customers. Given these factors, the grids directed a finding of not disabled.
- In another case, a 58-year-old man filed for disability based on hepatitis C. The claimant had a high school education and some college. The SSA determined that the claimant had the RFC to perform medium work. Because of his education level, the claimant was denied under the grids.
Can Too Many Early Retirees Affect Social Security
Regardless of when you retire, youll receive around the same amount of Social Security benefits over your lifetime. This is due to cost-of-living adjustments that attempt to protect seniors from inflation.
In other words, Social Security balances itself out. Early retirees receive lower monthly benefits over a long period of time while late retirees receive larger benefit amounts over a short period of time. Retiring early does not affect the Social Security programs finances because the amount of benefits available does not depend on how early or late someone retires.
Don’t Underestimate How Long You’ll Live
People are living longer. This means your retirement savings have to last you longer.
Here are some statistics according to data from J.P. Morgan:
- A 62-year-old man has a 61% probability of living until 80 and nearly a one in four chance of living until age 90
- A 62-year-old female has a 71% probability of living until 80 and one in three odds of living until 90
- As a couple, there’s an 89% chance at least one spouse will live until 80 and almost a 50% probability that one person will live until 90
Put another way, the odds of either you or your spouse living past 90 are roughly 50/50. If you retire at 55, you’ll probably spend more time in retirement than you did working. It sounds nice, but affording it requires lots of planning and a disciplined approach to saving and investing.
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How Can I Increase My Social Security Income
The following five planning tips are ones that everyone should know about in order to increase the size of their Social Security checks.
You Can Receive Benefits Before Your Full Retirement Age
You can start receiving your Social Security retirement benefits as early as age 62, but the benefit amount will be lower than your full retirement benefit amount.
If you start receiving your benefits before your full retirement age, we will reduce your benefits based on the number of months you receive benefits before you reach your full retirement age.
If you wait until age 70 to start your benefits, your benefit amount will be higher because you will receive delayed retirement credits for each month you delay filing for benefits. There is no additional benefit increase after you reach age 70, even if you continue to delay starting benefits.
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Gaining Back The Reduction In Benefits From Working
The amounts of early retirement benefits you lose as a setoff against your earnings are not necessarily gone forever. When you reach full retirement age, Social Security will recalculate upward the amount of your benefits to take into account the amounts you lost because of the earned income rule. The lost amounts will be made up only partially, however, a little bit each year. It will take up to 15 years to completely recoup your lost benefits. And remember, none of this readjustment will change the permanent percentage reduction in your benefits that was calculated when you claimed early retirement benefits .
Top Five Challenges To Retiring At 5:
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Early Retirement: Before Age 65
Let’s be honest, leaving your job can have some nice perks. By the time some workers reach their 50s and early 60s, they’re starting to feel burned out, so retiring before the traditional age of 65 can feel invigorating. Men retire at an average age of 64.6 years, while for women, the average retirement age is 62.3 years. So whether it’s traveling, taking up new hobbies, or simply finding a part-time job with less stress, it’s your opportunity to recharge.
While there is research to show that working longer keeps you healthier and happier, there’s also evidence for the opposing view. The National Bureau of Economic Research, for example, found that “retirement improves both health and life satisfaction,” in part by factoring in the number of people who are forced to retire due to health issues. However, there’s a major caveat here. Relatively few people have the financial resources to support an extended retirement.
Should I Take Survivor Benefits At 60
If You Haven’t Applied for Retirement Benefits Yet If both payouts currently are about the same, it may be best to take the survivor benefit at age 60. It’s going to be reduced because you’re taking it early, but you can collect that benefit from age 60 to age 70 while your own retirement benefit continues to grow.
Age 55 Is The Magic Age: Social Security Disability Rules If You Are Between The Ages Of 55 And 59
For many of my clients, age 55 is often the key age that separates approval and denial of disability benefit claims.
This is because once you reach age 55 you can receive SSDI or SSI benefits if:
- Your medical impairments limit you to light or sedentary work and you do not have skills that easily transfer into new jobs or recently completed education that provides for direct entry into skilled work. Sedentary work is work that requires lifting no more than 10 pounds at once and no more than 3 hours walking or standing in an 8-hour workday.
- Your medical impairments limit you to medium work and you have limited education and no work history or a work history that includes only unskilled work.
If you are 55 or older, the only way you will be denied disability benefits if you are limited to light or sedentary work is if your past jobs gave you skills that easily fit into a less physically demanding job with little difficulty and allow you to perform the new job the same way you performed your old jobs.
Can I Retire At 55 And Collect Social Security
Social Security retirement benefits can be an important part of your financial puzzle. These benefits are designed to provide monthly income in addition to any income you have from qualified retirement accounts, taxable investment accounts, annuities or other sources.
So can you retire at 55 and collect Social Security? The answer, unfortunately, is no. The earliest age to begin drawing Social Security retirement benefits is 62. But theres a catch. Taking Social Security benefits prior to reaching your normal retirement age results in a reduction of your benefit amount.
Your benefits can also be reduced if you start taking them at age 62 but are still working in some capacity. So, say you retire at 55 from your full-time job but you want to do some consulting work on the side. Once you turn 62, you could claim Social Security retirement benefits but your earnings from consulting work could affect how much you collect.
The flip side to Social Security is that you can be rewarded with a larger benefit amount by waiting to claim them. If you wait until age 70 to take Social Security, for example, you can receive a monthly payment thats equal to 132% of your regular benefit amount.
So if youre asking, can I retire at 55? its important to know that you wont have Social Security as a source of income for a few years. And that if you decide to take those benefits as soon as youre able to, theyll be less than what youd get if you waited until full retirement age instead.
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Can I Retire At 55 And Withdraw Money From A 401k Or Ira
You can save money in a 401 or Individual Retirement Account to help you fund your early retirement goals. However, you might encounter a problem if you want to withdraw money from these accounts before the age of 59 1/2.
The Rule, age 55, is the first. This IRS rule states that if you are fired, laid off, or quit your job within the year you turn 55 you can withdraw money from either your current 401k or your 403(b without penalty.
You cant tap money from 401 plans that you have at your former employer without a penalty. This can be avoided by rolling your old 401k or 403b into your current one before retiring.
Unless you are eligible for some exceptions, you cant withdraw money from a traditional IRA before you turn 59 1/2. You can withdraw your original contributions tax-free and without penalty with a Roth IRA. To do this, your
Roth IRA account must be open for at least five consecutive years. If you are not eligible for an exception, you will need to wait until you turn 59 1/2 before you can withdraw your earnings.