Will My Disability Benefits Change when I Turn 65?

Published on: March 15, 2023

Social Security Disability Insurance (SSDI or SSD) provides financial support to workers or former workers who are prevented from working due to a non-work-related disability. The program is designed to help people maintain a basic standard of living while they cannot earn a living wage. However, there is a common misconception that SSDI benefits end once an individual reaches their full retirement age. This is simply not true, and it is important to understand why.

Social Security Disability and Social Security Retirement Benefits are Equal.

Understanding the difference between SSDI and Social Security Retirement benefits is important. SSDI benefits are paid to individuals who have worked and paid Social Security taxes but who have become disabled and cannot work for at least 12 months.

Social Security Retirement benefits, on the other hand, are paid to individuals who have reached at least age 62 and have worked and paid Social Security taxes for long enough to accumulate the required number of work credits. While the two programs are related, they are separate and distinct programs.

Once an individual reaches the age of 65 or their respective full retirement age, SSDI benefits do not automatically end. Instead, payments in an equal amount are sent to the benefits received from the Social Security Retirement program instead of the SSD program.

The same Formula Is Used to Set SSD Benefit Amount and Retirement Benefit Amount

The amount of your monthly Social Security Disability benefits payment is based on the amount of taxable income you earned during the 35 highest earning years in your employment history.

The Social Security Administration uses those 35 highest income figures as a starting point in the process of setting your benefit amount. First, the government uses an index to increase the 35 annual incomes selected to reflect a balance with each year’s national annual average income.

Once the figures are indexed, the Social Security Administration adds the 35 incomes together and divides them by 35 to arrive at your average annual income. Then it divides that number by 12 to reach an important figure called your Average Indexed —Monthly Earnings (AIME).

This process is exactly the same one used to determine the amount of your Social Security Retirement benefits. This makes sense because when a worker suffers a long-term disability, either through illness or injury severe enough to prevent them from working, it is very possible they will never return to work. Therefore, the benefit reflects their retirement payments, just earlier than they would have received them had they continued to work.

The Benefit Formula

To determine a disabled worker’s SSD benefit amount, their AIME figure is applied to the following formula, which produces their Primary Insurance Amount (PIA). That’s their benefit payment amount:

  • Add 90 % of the first $1,115 of the worker’s AIME, plus
  • 32 % of the amount between $1,115 and $6,721, plus
  • 15 % of any amount above $6,721.
  • Then A round down to the nearest $0.10 unless the figure is already a multiple of 10. 


Suppose a disabled worker’s Average Indexed Monthly Income (AIME) is $5,950.

  • Add 90 % of the first $1,115 of the worker’s AIME = $1,003.50, plus
  • 32 % of the AIME between $1,115 and $6,721 = ($4,835 - $1,115 = $3,720 x .32) = $1,190.40
  • 15 % of the AIME above $6,721 = $0.00 (The $5,950 AIME is below $6,721). $1,003.50 + $1,190.40 + $0.00 = $2,139.90
  • rounding down is unnecessary because .90 is already a multiple of

Early Retirement When Social Security Disability Benefits Cuts Benefit Amount

Workers are able to file a claim for Social Security Retirement benefits when they reach age 62. However, the Social Security system assumes every worker will not retire until they reach their full retirement age, from 65 for some workers to 67 for other younger workers.

When a person files for retirement benefits early, they forfeit up to 30 % of their full retirement benefit for the rest of their life.

For this reason, anyone who is receiving Social Security Disability benefits should never file for early retirement benefits. If they do, their SSD benefit (which is equal to their full retirement benefit amount) will be reduced by a significant percentage, depending on how early they file their claim.

Note, though, that someone who claimed their Social Security Retirement benefit early, perhaps at age 62, could become disabled before they reach their full retirement age. They are able to file for SSD benefits if their disability is severe enough. If approved, they would receive an SSD benefit payment equal to their full retirement benefit until they finally reached their full retirement age.

At that time, their SSD payments would switch back to the Social Security Retirement program and return to the lower benefit payment they invited by claiming early retirement. If you need help filing for SSD benefits or you have questions regarding your disability benefits.

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