Do Social Security Disability Benefits Change At Age 62
To learn how age impacts Social Security disability benefits, it helps to understand the eligibility criteria and the programs available.
How The Social Security Administration Defines Disability
When the SSA reviews your claim for disability benefits, the key factor is whether or not you are able to work to support yourself and provide for your family. This is the basis for how the SSA defines total disability, which is the only type of disability allowed under the program. Neither partial nor short-term disability meet the criteria. The SSA expects that people will be prepared for such emergencies through short-term disability insurance, workers compensation or personal savings. The determination of total disability hinges on whether or not you can perform the same work as before, if the work can be adjusted to accommodate the condition, and the projected duration of the disability.
SSI vs. SSDI
There are two types of disability programs administered by the SSA: Social Security Disability Insurance program and Supplemental Security Income program. To be eligible for SSDI, the applicant needs to have worked and earned enough credits to qualify for disability benefits. Credits are earned by working and paying Social Security taxes. This is different than SSI, a program where the applicant must demonstrate a financial need in addition to meeting the disability criteria. Those below age 19 would apply for SSI because children would not have yet accrued credits for working.
Health Insurance Options Before Medicare
Unless your spouse is still working and you can join his or her health insurance plan, paying for health insurance on your own may be prohibitive. With Medicare eligibility beginning at 65, what are your options for health insurance if you retire at 55?
COBRA coverage generally only lasts for 18 months if you retire early, and you need 10 years. The public exchanges will usually be more affordable than private insurance, but it’s still really expensive, and the cost varies by state.
According to this calculator from the Kaiser Family Foundation, two 55-year-old adults in Boston, MA would pay a premium of $995 per month in 2020 for a silver plan, assuming they’re not eligible for subsidies. The same couple would pay $1,590/month in Jupiter, FL and $1,359/month in Houston, TX.
But Consider Your Spouse’s Needs Too
If you’re single, then the decision to claim Social Security should boil down to your needs alone. But if you’re married, then filing for benefits right away when your health is poor may not be the best move. The reason? Once you pass, your spouse will be entitled to survivors benefits. If he or she claims them at full retirement age, your spouse will be eligible to receive 100% of the amount you collected when you were alive. If you file for Social Security early and reduce your benefits in the process, you could end up hurting your spouse, especially if he or she outlives you by many years.
Going back to our example, imagine you claim your benefits at 62 and cut your monthly payments from $1,600 to $1,120. If your spouse outlives you by 20 years but is stuck collecting $1,120 a month during that time, he or she might struggle — so take that into account as you evaluate your options.
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How Do You Qualify For Social Security Disability Benefits
Disability benefits are available to qualified recipients under two programs, Supplemental Security Income and Social Security Disability Income . SSI is a means-tested program for people with disabilities who have very limited means, but SSDI is an insurance program that is available to qualified workers with disabilities regardless of their resources. As of January 2018, some 13.8 million disabled workers and their dependents were receiving SSDI benefits from Social Security.
SSDI pays cash benefits to people who are unable to work for a year or more because of a disability. Benefits continue until you are able to work again on a regular basis, or until you reach retirement age. At that point, the disability benefits automatically convert to retirement benefits, but the amount remains the same. After receiving SSDI benefits for two years, you also become eligible for health insurance coverage under Medicare. The disability program also includes a number of work incentives to ease your transition back to work.
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Who is eligible?
As with retirement benefits, you must have accumulated a certain number of work credits before you can qualify for SSDI disability benefits. However, fewer credits are required to qualify for the disability program than for retirement. You can earn up to four credits per year of employment. How many credits you need to qualify for disability depends on the age you become disabled.
Who is “disabled”?
How Long Do You Receive Disability Benefits
You’ll receive Social Security benefits as long as you remain sufficiently disabled. This means as long as your disability prevents you from working, you are eligible to continue receiving Social Security disability benefits.
The SSA will conduct periodic reviews of your case to determine whether you are still eligible for disability benefits. These reviews are called continuing disability reviews and they generally happen every few years, although the time period in between reviews depends on the severity of your condition and the likelihood that your impairment will improve. should state when to expect your first review.) You must report changes in your condition to the SSA, even if those changes would result in the cessation of your disability benefits. To learn more about these reviews, see What Is a Continuing Disability Review?
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Options For Approval When The Grids Say Not Disabled
Even if the grids say you should be denied benefits, you can still win your claim by showing your limitations actually prevent you from doing the kind of work the SSA says you can do.
One way to win is to prove you cannot even do a sit-down job. For instance, if the SSA denied you benefits because you had a sedentary RFC, a college education, and transferable job skills, you could appeal and prove that your inability to use your hands and fingers don’t allow you to do any sit-down jobs. For more information, see our article on not being able to do sedentary work.
If the grids say that you have transferable skills but your functional limitations prevent you from using them, you can “reverse” the grid’s determination. For more information, see our article on proving you don’t have transferable job skills.
You can also be approved if you can show that you have a combination of exertional and non-exertional limitations that prevent you from working. For instance, if you have an RFC for light work, but you can’t stoop or reach overhead, you won’t be able to do many light jobs. Non-exertional limitations also include mental limitations such as difficulty with memory or understanding directions. For more information on how to win a claim using this strategy, see our article on combining exertional and non-exertional limitations to show disability.
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.
How Much Is The Supplement
EXAMPLE: Joe is retiring at his Minimum Retirement Age of 56. He has 30 years of service and cant afford to retire on his pension alone. Joe finds out he will qualify for the Supplement because he has attained Minimum Retirement Age and has served 30 years. Joes Social Security statement shows he will receive $1,200 at age 62. The formula to calculate his Supplement is as follows:
|Years of Service:|
Joe now applies the above percentage to his Social Security at age 62 and will receive a Supplement of $900 a month from his Minimum Retirement Age until age 62. Once he turns 62 he will draw his normal social security check of $1,200.
How Much Money Do You Need To Retire
The amount of money you need to retire depends on your sources of retirement income and your planned retirement spending. Some experts say you should have enough saved to have about 80% of your pre-retirement salary available annually. Social Security and pensions will help, but you’ll likely need to set aside additional funds so you have enough money for the duration of your retirement.
How Much Income Do You Need
Let’s do some informal, back-of-the-napkin calculations to get a ballpark idea of how much income is required to make the dream come true.
Jot down the amount of money you spent last year. If you spent $35,000 to maintain your lifestyle, then you need $35,000 a year starting at age 56. If you spent $100,000, $200,000, $250,000, or some other amount last year, then that is the number you will need.
This simply assumes that the lifestyle you want next year is the same lifestyle that you enjoyed last year, so you need adequate savings and other income sources to pay your bills once you reach full retirement age at 66.
But it doesn’t take into account things that might affect your expenses in a major way, either pleasant or unpleasant .
It also ignores the insidious effects of inflation.
Why Did The Full Retirement Age Change
Full retirement age, also called “normal retirement age,” was 65 for many years. In 1983, Congress passed a law to gradually raise the age because people are living longer and are generally healthier in older age.
The law raised the full retirement age beginning with people born in 1938 or later. The retirement age gradually increases by a few months for every birth year, until it reaches 67 for people born in 1960 and later.
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Gen Z And Millennials: Too Early To Tell Or Worry
Experts say its too early for millennials and Gen Zers to worry about Social Security cutting benefits.
You are too young to confidently guess how Social Security will pay benefits, notes Mantell. Half of you dont even yet have your 40 credits for eligibility. So, your focus will be well-served to be on you.
Elsasser shares that point of view: Though its important for everyone, particularly if you are under 40, your focus should continue to be on improving your skills, education and training in order to maximize your earnings potential through your peak earnings years, he advises. Saving consistently in vehicles you wont touch until retirement is important as well. At minimum, be sure to take advantage of any company matches or incentives.
Figuring Out If 55 Is Too Early To Retire Requires Financial Planning
At any age, you’ll want to make sure you’ve fully thought through your retirement plan before retiring. Retiring early requires even more planning as the traditional sources of retirement income aren’t available and new challenges, like health insurance, arise. Here are some financial planning tips for executives looking to retire at 55.
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Survivors Benefits If You Are Divorced
An ex-spouse is eligible to receive the same benefits as a current spouse if they were married to the deceased worker for at least 10 years and are not currently married. However, if the living ex-spouse remarries before age 60, they forfeit their right to their deceased former spouses Social Securityunless that subsequent marriage ended in death, divorce, or annulment. If the living ex-spouse remarries after age 60, this rule doesnt apply.
How much a spouse or former spouse receives depends on several factors including when they file for benefits and whether they are still working and earning money.
Social Security Disability For Claimants Age 55 And Older
Many people applying for Social Security disability are age 55 or older, and have worked hard for their entire adult life. But now, due to a medical condition, they cannot do their job any longer. Many of these workers are denied benefits when they apply for disability, despite a lifetime of paying into the Social Security system.
The Social Security Administration has special rules for claimants age 55 and over. If you can no longer do the sort of work you have done in the past, then Social Security must take your age into account when considering whether or not you can do other work. These rules are embodied in the Medical-Vocational Guidelines, which are used by the SSA to determine disability at step 5 of the sequential evaluation.
If you are 55 or older and are limited to unskilled light exertional work, Social Security will presume that you are unable to transition to other work due to your age. An experienced attorney can use these presumptions to help win your disability case.
It is very important to remember that you do not get the benefit of these rules until step 5 of the disability evaluation process. So it is critical to rule out your past relevant work at step 4.
I prefer to be involved as early as possible with a disability claim of a worker over age 55. Ideally, I am consulted before the claim is filed. In many cases, my help with the initial application pays off with a fully favorable decision, without the necessity of a hearing.
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Do Social Security Benefits Start The Month Of Your Birthday
When To Enroll in Retirement BenefitsThe choice to begin accepting benefits as early as allowed versus delaying until full retirement age or later is a personal one. Regardless of the age you choose to collect, the payment schedule hinges on the month of your birthday. In the case of family survivors, the point of reference is the birthday of the deceased who earned enough credits for the family to be eligible for survivor benefits.
Schedule of SS paymentsSocial Security benefits are not prorated. They start the month following the birthday. The schedule, according to AARP, follows this rule: When the birth date falls between the 1st and 10th of the month, the payment is issued on the second Wednesday of the month following the birthday month. For birth dates between the 11th and 20th of the month, expect to be paid on the third Wednesday after the birthday month. For birth dates from the 21st through the last date of the month, recipients will have to wait until the fourth Wednesday of the month that follows the birthday.
Consequences of Early RetirementThe reason people struggle with the decision of whether to collect at age 62, full retirement or 70 is the exponential difference in benefits. Contrary to what some believe, 66 is not always the full retirement age as defined by the SSA. Retirement age varies with the beneficiarys year of birth, ranging anywhere from age 65, for retirees born in 1937 or earlier, to age 67 for those born in 1960 or later.
Social Security When A Spouse Dies: Survivor Benefits Guide
If your spouse dies and you have reached full retirement age, youre eligible for 100% of their benefits.
- If your spouse dies and you have reached full retirement age, youre eligible for 100% of their benefits.
- If your spouse retired before full retirement age, they received a reduced retirement benefit and you will receive reduced survivors benefits.
- Children up to age 18 and dependent parents may also be eligible for survivors benefits.
Losing a spouse is one of the most stressful events you can go through. In addition to the emotional turmoil and grief, youll also have to figure out finances. When a spouse dies, the surviving spouse is eligible to receive survivor benefits from the Social Security Administration . In this article, well go over the rules and exceptions for receiving these benefits and enable you to build a plan for your survivors benefits.
How Your Spouse Earns Social Security Survivors Benefits
Social Security work credits are based on your total yearly wages or self-employment income. You get one credit quarterly for every $1,470 dollars you earn in 2021, and you can earn up to four credits. Most people make more than $5,880 a year, but four credits is the maximum applied to Social Security benefits. You accumulate benefits your entire working life until you reach full retirement age , or FRA. You can start collecting benefits before your full retirement age, but theyll be reduced.
Social Security survivors benefits are based on a percentage of your spouses benefits. If the deceased started collecting reduced benefits before reaching full retirement age, your survivors benefits would be reduced as well. If the deceased died before he/she was eligible to collect, the benefit is based on what they would have received when they retired.