Disability vs. Retirement

I agree with the recommendation to seek expert, and, hopefully, “Fee Only” Advice.

There are several factors to consider:

1. [I]”…[U]What You Need To Know When You Get Social Security Disability Benefits [/U]SSA Publication No. 05-10153, April 2011, ICN 480165

[B]When you reach full retirement age [/B]

If you are receiving Social Security disability benefits, your disability benefits automatically convert to retirement benefits, [COLOR=”Red”]but the amount remains the same…”
[/COLOR][/I] Note: I believe this is because you automatically receive the ‘normal’ retirement age pay as disability pay. Confirm this with the SSA.

Available on line at: [url]http://ssa.gov/pubs/10153.html#2[/url]

2. [I]”…[B]Receiving Medicare and disability benefits [/B]Updated 06/10/2011 03:31 PM | ID# 155

Do I automatically receive Medicare benefits if I’m eligible for disability benefits?

You will receive Medicare after you receive disability benefits for 24 months. When you become eligible for disability benefits, we will automatically enroll you in Medicare. We start counting the 24 months from the month you were entitled to receive disability, not the month when you received your first check. [/I]

3. Beware of this trap (my name for it)

“…If you are eligible for Medicare based on disability or permanent kidney failure, your initial enrollment period depends on the date your disability or treatment began… and now, the trap-

“…[U]When you first become eligible for hospital insurance (Part A), you have a seven-month period (your initial enrollment period) in which to sign up for medical insurance (Part B). [COLOR=”Red”]A delay on your part will cause a delay in coverage and result in higher premiums[/COLOR][/U]

From- [url]http://www.socialsecurity.gov/pubs/10043.html[/url] in the section entitled “Initial enrollment period for Part B

4. An even Bigger Trap- Check very carefully in both your Company Retirement and your Company Disability Plans for the “Medicare” Trigger. That means you may find[B] you are required[/B] to Apply for and Accept Medicare on the first date you are eligible.

There’s more, lots more and it falls under “Which Plan is the Primary Provider”

Good Luck

IF I had a long term company provided Disability Plan that paid Benefits, and therefore, medical, until age 65 or 66 I would do that before I quit and spent my own retirement funds.

Follow up on the part about SS Disability pays the “normal” Retirement Age pay. I felt that is what you meant when you said this,

“–Could apply for SS disability. Local SS office told me that if I did not apply for SS diability before age 62 (SS early retirement age) I would receive reduced benefit”

In addition, you need to know about this-

[B]Understanding The Benefits[/B]
SSA Publication No. 05-10024, August 2011, ICN 454930

[I]”…[B]Benefits for your family[/B]

When you start receiving Social Security retirement or disability benefits, other family members also may be eligible for payments. For example, benefits can be paid to your husband or wife:
•If he or she is age 62 or older; or
•At any age if he or she is caring for your child (the child must be younger than 16 or disabled and entitled to Social Security benefits on your record).”
[/I]
From:
[url]http://www.socialsecurity.gov/pubs/10024.html[/url]

An example of pay for different categories of workers:

Average 2011 monthly Social Security benefits
•Retired worker: $1,174
•Retired couple: $1,907
•Disabled worker: $1,067
•Disabled worker with a spouse and child: $1,813
•Widow or widower: $1,133
•Young widow or widower with two children: $2,409

Note that a ‘Disabled’ worker does not earn much less than a reired worker! $107 dollars less, is that about right?

IF I had a long term company provided Disability Plan that paid Benefits, and therefore, medical, until age 65 or 66 I would do that before I quit and spent my own retirement funds.

Follow up on the part about SS Disability pays the “normal” Retirement Age pay. I felt that is what you meant when you said this,

“–Could apply for SS disability. Local SS office told me that if I did not apply for SS diability before age 62 (SS early retirement age) I would receive reduced benefit”

In addition, you need to know about this-

[B]Understanding The Benefits[/B]
SSA Publication No. 05-10024, August 2011, ICN 454930

[I]”…[B]Benefits for your family[/B]

When you start receiving Social Security retirement or disability benefits, other family members also may be eligible for payments. For example, benefits can be paid to your husband or wife:
•If he or she is age 62 or older; or
•At any age if he or she is caring for your child (the child must be younger than 16 or disabled and entitled to Social Security benefits on your record).”
[/I]
From:
[url]http://www.socialsecurity.gov/pubs/10024.html[/url]

An example of pay for different categories of workers:

Average 2011 monthly Social Security benefits
•Retired worker: $1,174
•Retired couple: $1,907
•Disabled worker: $1,067
•Disabled worker with a spouse and child: $1,813
•Widow or widower: $1,133
•Young widow or widower with two children: $2,409

Note that a ‘Disabled’ worker does not earn much less than a reired worker! $107 dollars less, is that about right?

The short answer is no.

When you reach normal SS Retirement Age your status will change from SS Disability to SS Retired WITH NO CHANGE in the amount you are paid. Annual cost of living increases and Medicare Part B Premium deductions not included. The amount of disability pay you are collecting now will not change. Refer to the SSA for accurate and current information. Disclaimer- this is only my intrepretation. Seek qualified expert advice.

If you go to the Quick Calculator Benefit Estimates here-

[url]http://ssa.gov/planners/benefitcalculators.htm[/url]

choose the “Quick Calculator” AND leave the retirement date blank, you will see something like this:

[I]”…Information you submitted Date of birth: 6/15/1950
Current earnings: $40,000.00
Benefit in year-2011 dollars

Retirement Benefit Estimates Retirement age Monthly benefit amount Note 1

62 and 1 month in 2012 $877.00
[COLOR=”Green”][B]66 in 2016 $1,226.00 [/B][/COLOR]
70 in 2020 $1,693.00

Note1: Assumes no future increases in prices or earnings.

We have calculated your benefits by making certain assumptions about your past earnings. Please look at these earnings to see if they appear reasonable to you. You can change them and see the effect on your benefit estimates!

——————————————————————————–
Disability/Survivor
For disability and survivors estimates,[COLOR=”SeaGreen”][B] we assumed that you became disabled or died today[/B][/COLOR]. We did not use future earnings in calculating those estimates.

Disability Monthly benefit amount
[COLOR=”Green”][B]You $1,154.00 [/B][/COLOR]

Your spouse and children may also qualify for benefits.
Survivors Monthly benefit amount
Your child $869.00
Your spouse caring for your child $869.00
Your spouse at normal retirement age $1,159.00
Family maximum $1,987.10 [/I]

Therefore, there is that ratio again: $1154 Disability pay vs. $1226 Retirement Pay (age 66).

The big deal difference(s)? You collect $1154 from the Date of Eligibility to the termination of the program. And, your spouse will collect the earlier (and greater) disability amount, when eligible. Greater compared to 1/2 of your early retirement in the event your spouse does not have their own earnings record.

Reminder, your spouse qualifies when eligible, your ex-spouse qualifies for half, if you were married long enough and widowers and widows and spouses with school age kids all can collect under certain circumstances.

Another almost useless tidbit-

“…[I]If You Do Not Qualify Under These Rules

Certain aged people who do not qualify for Medicare hospital insurance under these rules may be able to get it by paying a monthly premium. They also must always enroll in medical insurance (Part B) to get this coverage. Certain disabled people who lost premium-free hospital insurance because they work [COLOR=”Red”]can get Medicare hospital insurance again by paying a premium[/COLOR].

Medicare Medical Insurance (also known as Part B)

Almost anyone who is 65 or older or who is under 65 but eligible for Medicare hospital insurance can enroll for Medicare medical insurance by paying a monthly premium. [COLOR=”red”]Anyone aged 65 or older does not need any Social Security or government work credits to enroll in this part of Medicare…[/COLOR]”[/I]

This means that you can ‘buy’ Medicare Part A and Part B without ever having worked a single eligible quarter!

Please contact the SSA for current and accurate information.

😀 That is good news GH-CIDP (good for you. good for me :rolleyes: )

For those of you who are lucky enough to still be working, find out if your employer offers a long term disability plan.

Then, find out if that plan is for 5 years or if you have to pay extra to sign up for disability to age 65.

Approaching retirement? Don’t wait for somebody to hold your hand and walk you through it. It ain’t gonna happen.

Go to SSA.GOV and do your homework. Got a question? Review all the category FAQ’s. If you must, send them an e-mail. Here-

[url]http://ssa-custhelp.ssa.gov/app/ask[/url]