Federal Taxation of Social Security Benefits

[naeem5]

Originally Posted by lenora

Naeem5,
I know I'm gonna regret this, but here goes -
I have NEVER heard of anyone's benefits decreasing when he is moved from Title2 (disability) benefits to full retirement benefits. This is why so many folks closing in on retirement choose to apply for Title2 benefits. The reason the benefits do not drop is because SSA pretends you are not only still working and contributing FICA taxes but that your pretend wages are also increasing each year you are disabled. If your predicted full retirement amount turns out to be less than what you are receiving in Title2 benefits, you will need to have the benefits recalculated. I suppose SSA could err and fail to retroactively adjust your pretend wages since it took so long for you to be awarded benefits. Also, unless you are working - or SSA radically changes its regulations, there is almost a zero chance you will be found capable of working at age 63. Please believe me on this one - I am (temporarily I hope) working for a component of a big nameless agency that conducts hearings regarding such matters.

I have NEVER heard of anyone's benefits decreasing when he is moved from Title2 (disability) benefits to full retirement benefits.
.............this is where we both may be correct. I'm not using my full retirement age of 66 in the picture. I'm using age 63 the date of my medical review. If I am eligible for full retirement benefits at age 66 and disabled, YES, I receive the larger amount, the larger of my disability benefit compared to the s.s. benefit that I would have received, (under $900) had I NEVER become disabled to begin with.

It was my understanding that if I am taken off disability, found to no longer be disabled based on medical improvement, etc., that I would lose my disability benefit which is now $1060.
Since this would be at age 63, which is before full retirement and past early retirement, my choices would be:
1. return to work
2. go ahead and apply for s.s. since I was eligible at age 62.
Based on my job history, my s.s. would be under $900.

For them to keep sending me $1060 would make the medical review a farce, it would not matter if I was found still disabled or not.

If I am found to still be disabled because there has been no marked improvement, etc. then I'd keep receiving my disability, and by age 63, there should be cost of living raises and the $1060 should be higher.
At the point, I doubt they give me another medical review after age 63.
It's my understanding, that once I reach full retirement age which for my birthdate is age 66, and I'm still disabled, I would no longer receive my disability benefit. I'd get s.s. BUT the amount would not be the "under $900", my s.s. benefit would be the same as my disability benefit, but instead of it coming out of the disability fund it would come out of the s.s. fund.



Your comments are appreciated.

[Escort Rider]

To Naeem: If it comes down to that, and if you can find work in this economic climate, I think that is your best option. Here are the advantages: First, it would probably increase your regular Soc. Sec. benefit whenever you do eventually retire, unless you've already had a lot of high earnings years in the past. Second, it would presumably allow you to put something aside to make your eventual retirement financially easier. Third, it might give you the option to consider working even a year or so beyond age 66; delaying Soc. Sec. benefits beyond full retiremet age makes them bigger.

[naeem5]

Originally Posted by Escort Rider

To Naeem: If it comes down to that, and if you can find work in this economic climate, I think that is your best option. Here are the advantages: First, it would probably increase your regular Soc. Sec. benefit whenever you do eventually retire, unless you've already had a lot of high earnings years in the past. Second, it would presumably allow you to put something aside to make your eventual retirement financially easier. Third, it might give you the option to consider working even a year or so beyond age 66; delaying Soc. Sec. benefits beyond full retiremet age makes them bigger.

good ideas.

I just wanted to make sure I understood that if taken off s.s.d. at age 63, some were saying my benefits would stay the same. That would make the medical review not needed if they were to find me no longer disabled, but still give the benefit if I moved over to s.s. instead of working.

The same amount thing would be if still disabled at full retirement, then they would automatically move me to s.s. so my benefit would come out of the s.s. fund instead of the disability fund, even though I'm still disabled.
I guess if I am found to still be disabled at 63, the disability would become permanent.
My review was the maximum of 5-7 years which means they expected little or no improvement.
My job history is poor so s.s. is going to be low. I planned to go ahead and retire at 62, then disability happened.
My father wanted me to work to 70 to get the extra couple $100 a month.
I said, I may not live to 70, so I'm taking s.s. as soon as I can get it.
Working another 8 years for $200 a month (or whatever the difference is) when life at age 70 is no guarantee, was not an option for me. It may be appropriate for others.
And you can work while on s.s. too.
They won't send me a benefit estimate because I am already getting benefits so I have to use a statement from 2002 to estimate my s.s. if taken off disability.