Will My Social Security Disability Increase When I Turn 65?
Understand how your Social Security Disability benefits transition to retirement benefits as you approach age 65 and beyond.
Individuals receiving Social Security Disability Insurance (SSDI) benefits often wonder if their payments will increase when they approach age 65. The transition from disability to retirement benefits involves a reclassification within the Social Security system and typically does not result in an increase in the payment amount. This article clarifies the process and addresses common questions regarding this transition.
The Automatic Conversion of Benefits
When an individual receiving Social Security Disability Insurance (SSDI) benefits reaches their Full Retirement Age (FRA), their disability benefits automatically convert to retirement benefits. This conversion is an administrative reclassification performed by the Social Security Administration (SSA). There is no need for the individual to file a new application or take any specific action for this transition to occur. The change is seamless, ensuring continued monthly payments without interruption.
The benefit amount usually remains the same during this conversion because both SSDI and retirement benefits are calculated based on the same earnings record.
Understanding Full Retirement Age
For Social Security purposes, “age 65” is not the universal Full Retirement Age (FRA) for everyone. FRA is defined as the age at which an individual can receive their full, unreduced Social Security retirement benefits. This age varies depending on the individual’s birth year, and for most people today, it is no longer 65.
For those born in 1960 or later, the Full Retirement Age is 67. Individuals born between 1943 and 1954 have an FRA of 66. For birth years between 1955 and 1959, the FRA gradually increases by a few months for each successive birth year, ranging from 66 years and 2 months to 66 years and 10 months. The conversion from SSDI to retirement benefits occurs at an individual’s specific FRA. Individuals can find their specific FRA on the Social Security Administration’s website or through their annual Social Security statement.
How Your Benefit Amount Is Determined
Both Social Security Disability Insurance (SSDI) and retirement benefits are primarily calculated based on an individual’s Average Indexed Monthly Earnings (AIME) over their working career. The AIME represents an individual’s average monthly earnings, adjusted for inflation to reflect the change in general wage levels over time. The Social Security Administration (SSA) uses up to 35 years of a worker’s highest indexed earnings to compute this average. If a person has fewer than 35 years of earnings, zero earnings years may be included in the calculation.
After the AIME is determined, it is applied to a specific formula that uses “bend points” to calculate the Primary Insurance Amount (PIA). The PIA is the base amount of the benefits paid and is generally the amount received at Full Retirement Age. Because both SSDI and retirement benefits use the same calculation method, the monthly payment amount typically remains unchanged when SSDI converts to retirement benefits at FRA. The primary way Social Security benefits do increase is through annual Cost-of-Living Adjustments (COLAs). These adjustments are determined by inflation, specifically using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), and they apply to both SSDI and retirement benefits regardless of age or conversion status.
Other Important Considerations at Age 65
Beyond the automatic conversion of benefits, reaching age 65 brings other considerations, particularly concerning healthcare coverage. Individuals receiving Social Security Disability Insurance (SSDI) typically become eligible for Medicare after a 24-month waiting period from their entitlement to disability benefits. This means that many SSDI recipients are already enrolled in Medicare well before they reach age 65. For those who reach age 65 before completing the 24-month waiting period, Medicare eligibility generally begins at age 65.
Medicare is a separate health insurance program and not an “increase” in the Social Security cash payment. Medicare eligibility continues seamlessly when SSDI benefits convert to retirement benefits, with no interruption to coverage. The existing Medicare Part A (hospital insurance) and Part B (medical insurance) coverage, along with any supplemental plans, generally remain unchanged.