Social Security is designed to aid those who are unable to earn enough income to live due to certain circumstances. This monetary assistance is reserved for those who are retired or are disabled. However, many in Pennsylvania are still confused about how obtaining benefits from Social Security Disability will affect their retirement benefits.
Disability and retirement benefits are linked within the current Social Security system. When a person needs to collect disability benefits before he or she retires, it can affect how one’s available retirement benefits are calculated. The amount of benefits is calculated based upon the accumulation of benefits during a 35-year employment history. However, for those who have been disabled over a long period of time, they may not be able to obtain a 35-year employment history by the time they retire.
This results in the years not worked being counted as zeros in the calculation of available benefits. The Social Security Administration has recognized this issue and, under the current system, if a person is continuing to receive disability benefits upon retirement age, the amount of disability benefits received automatically converts into one’s retirement benefits. Essentially, this has the effect of calculating one’s retirement benefits based upon solely the work history before being disabled.
Those not disabled at the time they reach retirement age may still be able to take advantage of this alternative method of calculating retirement benefits in the same manner as Social Security Disability. In order to obtain this type of calculation of benefits in Pennsylvania and other states, one will have to apply for what is known as a disability freeze. However, many times, applying may not be straightforward, which is why it is important to understand all applicable rules and regulations when going through the process.
There are many nuances to the rules and regulations related to obtaining benefits from the various programs administered by the Social Security Administration. Receiving benefits from Social Security Disability is no exception in Pennsylvania or any other state. Millions of individuals in the United States rely on disability benefits for their daily survival. However, many may be worried about how their benefits will be affected after retirement.
Many are worried that their disability benefits will be discontinued once they reach retirement age. Although this may be the case for many long-term policies for disability in the private market, this is not so for Social Security Disability benefits. Alternatively, these benefits are automatically converted into retirement benefits once retirement age is reached. Also, the amount of the benefits received will remain the same per month as it had been before reaching the age of retirement.
However, receiving disability benefits can affect spousal retirement benefits one would normally receive once one’s spouse retires. This is important because one may be able to obtain a larger amount of benefits if the spousal benefits are more than one’s disability payments. On the other hand, it is not possible to obtain both the full amount of disability and spousal retirement benefits at the same time. Therefore, it is important to completely understand one’s options before making any decisions.
In order to fully comprehend the available paths related to Social Security Disability benefits, it will be necessary to know all applicable rules and regulations in Pennsylvania or in any other state. This understanding will allow a person to apply these rules to one’s specific situation as well as take into consideration one’s retirement goals and plans. Lastly, one will need to go through the proper legal process proscribed for obtaining desired benefits.
nasdaq.com, Social Security Disability: What Happens When You Turn 66?, Dan Caplinger, Aug. 16, 2014
nasdaq.com, Social Security Disability: How Some Couples Can Get More Money in Retirement, Dan Caplinger, Aug. 23, 2014