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One thing not being taken into account is that the amount you recieve for Disabilty is close to equal to your FRA benefit. It is one reason that if you are 62 or older but not yet FRA and are disabled you should file for both your SS retirement and for Disablity at the same time.
you would start receiving a reduced retirement benefit, while the Disabilty claim works through the system, then IF your claim is approved, they would raise the amount you were receiving to the FRA amount and pay you retroactively the difference from the time you filed.
One thing not being taken into account is that the amount you recieve for Disabilty is close to equal to your FRA benefit. It is one reason that if you are 62 or older but not yet FRA and are disabled you should file for both your SS retirement and for Disablity at the same time.
you would start receiving a reduced retirement benefit, while the Disabilty claim works through the system, then IF your claim is approved, they would raise the amount you were receiving to the FRA amount and pay you retroactively the difference from the time you filed.
IMHO, unless an applicant is desperate for funds, I would not advise anyone to file for both entitlements.
IMHO, unless an applicant is desperate for funds, I would not advise anyone to file for both entitlements.
And to expand, filing for both benefits prior to FRA will result in permanently reduced benefits with no other options as I mentioned in my previous post.
And to expand, filing for both benefits prior to FRA will result in permanently reduced benefits with no other options as I mentioned in my previous post.
RVcook
That is not true in the situation I mentioned. If you are disabled and going to apply for disabilty, SSDI, you can and should file for your regular retirement at the same time. you will start getting your retirement checks, yes reduced, but your disabilty claim will continue through channels. If at the end of that process you are determined by SS to be disabled an to qualify for SSDI then your benefit will go up to what it would have been at FRA and you will get an adjustment to that amount for the time you have been collecting SS retirement.
That is not true in the situation I mentioned. If you are disabled and going to apply for disabilty, SSDI, you can and should file for your regular retirement at the same time. you will start getting your retirement checks, yes reduced, but your disabilty claim will continue through channels. If at the end of that process you are determined by SS to be disabled an to qualify for SSDI then your benefit will go up to what it would have been at FRA and you will get an adjustment to that amount for the time you have been collecting SS retirement.
Perhaps we're splitting hairs here but what you suggest may not always be the best strategy.
When you are awarded SSDI benefits, those benefits are based on your average income over the number of years worked Disability Planner: You're Approved
When you are awarded SS benefits, those benefits are based on a special formula.
From: "Your Retirement Benefit: How It Is Calculated" We base Social Security benefits on your lifetime earnings. We adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or “primary insurance amount.” This is how much you would receive at your full retirement age—65 or older, depending on your date of birth.
If both benefits are awarded, depending on when a person chooses to take them, they are permanently reduced. For someone who has NO choice however, filing for both would be a given; reduced or not (depending on age).
But...in the case of a lower wage earner who is married but still able to work, it would make no financial sense to take the reduced SSDI benefit if their spouse made significantly more income. In that instance, if the disabled person, who was already receiving SSDI benefits determined that they would receive a larger benefit (by filing for either a survivors, spousal or divorced spousal benefit) at a later date, they would be unable to file for those benefits unless they paid back all the SSDI money they had previously received. That is the loophole that is being closed.
Like I said, we may just be splitting hairs here, but I think it's always worth a good hard look at all the facts before doing something that can't be undone.
You are correct Lenora about the automatic conversion. And you are also correct that Social Security has already claimed that this is NOT a rule change, just a clarification. However, in the past one could "withdraw" their claim for SSDI benefits and basically just switch to (claim) their spousal benefits at FRA. Now, that has all changed to close that loophole you referred to.
As it stands now, one can claim their own SSDI benefits and then also reduced widow's benefits. These two amounts, when added together result in a double reduced amount.Contrast this scenario with a person who is not disabled, claims reduced widows benefits at 60 and then at FRA (or 70) claims her own benefit that is allowed to grow. In essence, she is swapping out her reduced widow's benefit for her own [U]FULL[/u] FRA benefit. Those receiving SSDI are not given this choice. They are out of luck, too bad, so sad, see ya! They have no other options...unless they want to pay back all the SSDI money they have received because if they "withdraw" their disability claim for benefits, they are saying they are not disabled.
Ridiculous!
RVcook
This may be a dumb question, but doesn't SS benefits only increase from age 62 to age 70 if the person is working and their wages are large enough to increase the amount average amount of income in their top 35 years of income? If the person is not a wage earner from age 62 to age 70 SS will increase only slightly (because it is started 8 years later)?
This may be a dumb question, but doesn't SS benefits only increase from age 62 to age 70 if the person is working and their wages are large enough to increase the amount average amount of income in their top 35 years of income? If the person is not a wage earner from age 62 to age 70 SS will increase only slightly (because it is started 8 years later)?
Not really a dumb question at all.
If the person continues to work, their benefit amount increases accordingly. By the same reasoning in reverse, as long as a person gets in their 40 quarters of work, while eligible to receive benefits, those benefits would be reduced due to how the benefits are figured and indexed (as stated in a previous post). So yes...if the person is not a wage earner from age 62 to 70, SS will only increase slightly, but it will still increase.
RVcook
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