Tips For Navigating Social Security
- A financial advisor can help you account for the various sources of retirement income, including Social Security benefits. SmartAssets free financial advisor matching tool can pair you with up to three advisors in your area. Get started now.
- If youre applying for Social Security disability benefits, youll need to fill out form SSA-827. This provides your consent for the SSA and Disability Determination Services to view your medical records.
- Dealing with a disability, either temporary or permanent, is hard enough without considering the financial impact. Having an emergency fund in place for unpredictable things like this can be a huge relief.
Understand The Two Gotcha Questions
When you are applying for Social Security benefits, there are two questions that seem to confuse individuals. These include:
- If you are eligible to receive a retirement benefit and a spouses benefit, would you want to delay the receipt of your retirement benefit?
- When do you want your benefits to start?
There are many people who are confused by the initial question. They dont know they are eligible for multiple benefits, and others dont understand the question at all.
Keep in mind, this question only applies to individuals who are considered eligible to restrict the applications cope to spousal benefits only, or what some call filing a restricted application. This is something that only applies to individuals who were born before January 1st, 1954.
Individuals who only want to receive spousal benefits need to answer yes to this question. If you respond with no, then your own benefits are going to start.
The second gotcha question is pre-populated with the earliest date you can begin receiving benefits. If you begin to fill out the application four months before you want your benefits to begin, then you need to change the date in the field.
If you have created a strategy to claim your benefits, especially if it is coordinating retirement and spousal benefits, entering the wrong date may cost thousands of dollars or more, and ruin the strategy.
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When Disability Benefits Will Stop
There are three separate occasions when Social Security disability benefits stop. The benefits will stop:
When you are no longer disabled. If your condition changes such that your disability is no longer considered to be severe or debilitating enough to preclude you from working, your benefits will end. For instance, if you qualified for disability for cancer but you have completely recovered, expect your benefits to stop.
When you reach retirement age. When you reach the age of 65, your Social Security disability benefits stop and you automatically begin receiving Social Security retirement benefits instead. The specific amount of money you receive each month generally remains the same.
When you being to earn too much money. There are limits on the amount of income you can earn when receiving SSDI payments or SSI .
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Applying If Time Elapsed Since You Last Worked
You must exhaust your employer-granted sick, personal and/or vacation leave days before receiving a disability benefit. However, your disability eligibility is still dependent on providing evidence of disability as determined by physician exams conducted within 90 days of your last day of active teaching and subsequent annual exams if one year or more passes before you apply for TRS disability benefits. One physician is required for pregnancy and all other reasons require two physician examinations throughout the duration.
If My Disability Benefit Stops Can It Ever Be Reinstated
Yes. If your disability benefit stopped because you were found recovered either medically or administratively, then your benefit can resume only if the disability recurs and you do not exceed the 80 percent earnings limitation. If your disability benefit stopped merely because you exceeded the earnings limitation, then your benefit can resume effective January 1 after you no longer exceed the 80 percent earnings limit.
If you return to a federal position where the salary or grade is higher than the position you retired from, then you’ll be found administratively recovered and your benefit will stop. You won’t be able to return to the disability retirement without submitting a new application and current medical documentation.
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We Are With Those Who Need A Helping Hand
The Supplemental Security Income program is a program that provides income support to people with disabilities, people age 65 or older, or blind, who have low income and resources. U.S. Treasury general funds, not the Social Security trust funds, pay for SSI.
If you or someone you know may be eligible for SSI, visit to learn more and apply.
An Example Of The Fers
Thus, by way of example: Hypothetical Annuitant A: A former Postal worker made $55,000.00 per year Thus, in the first year, he receives $33,000 as his FERS annuity , and in the second year, $22,000 as his FERS annuity . Rounding off the numbers to simplify, lets say that it comes to around $3,000 per month for the first year, then $2,000 per month for the subsequent years. The former Postal worker also gets SSDI approved, and the amount comes to $2,000 per month.
How does the offset work? Well, as SSDI is primary, the Postal worker would receive $2,000 from Social Security the first year, and $1,000 from his FERS annuity , and in the second and subsequent years, he would receive $2,000 from Social Security and $800.00 from FERS . If Annuitant A works at a private-sector job and makes $1,000 per month, all well and good for, that amount would not exceed the threshold for either the FERS Disability Retirement annuity nor the SSDI allowable amount. If, however, he goes out and makes $2,000 per month, or some higher amount that violates the allowable threshold for Social Security, then he will lose the SSDI benefit, and any prior offset with FERS will be recalculated to allow for the full annuity.
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The Early Retirement And Disability Decision
Determining the timing for when to retire can often be a difficult decision and it becomes even more challenging when the individual is dealing with a medical condition that interferes with their ability to work. Most people are aware of the retirement benefits that are available to workers who have paid into Social Security, including retirement benefits between ages 65 and 67, as well as early retirement benefits at a reduced rate at age 62, but often folks who retire during that age range overlook the option of filing for Social Security disability benefits, as well.
If you have a physical or mental condition that has lasted or is expected to last at least 12 months and prevents you from being able to maintain work on a consistent basis, you may be eligible for disability benefits from the Social Security Administration. When getting ready to retire between the ages of 62 and 66, you may want to consider whether you should also file an application for disability benefits. Social Security allows you to simultaneously file for disability and early retirement benefits, as early as three months before your 62nd birthday. By doing so, you can start to collect your early retirement benefits while your disability application is being adjudicated. If your claim for disability benefits is approved after you start receiving early retirement benefits, you will be eligible to receive your full SSDI benefit amount.
I Am Having Difficulties Doing My Job
Difficulty is not a synonym for Unable to or Cant. If you have no deficiencies in your performance, conduct or attendance, then ask yourself the following question: How would I argue that I cannot perform one or more of the essential elements of my job if my own agency continues to give me stellar performance ratings? T
here is, certainly, a fourth criteria in order to become eligible for Federal Disability Retirement that of incompatibility between the medical condition and the essential elements of ones job. This can certainly happen, where a medical condition reaches a stage of acute debilitation such that a Federal or Postal employee must file for Federal Disability Retirement benefits. In such a case, however, it is imperative that one garners the support of ones treating doctor, in order to prove the incompatibility criteria.
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How Pensions Are Calculated
Nonduty disability pension calculations.
A nonduty disability retirement benefit is calculated the same as a regular service retirement. The formula multiples your years of service times 1.5 percent times your final average compensation to figure your annual pension amount.
When you apply, you can choose the straight life option, which pays you the most money but does not provide any ongoing benefits to a beneficiary when you die. Or you can elect a survivor option, which pays you less but continues pension and health insurance benefits to your beneficiary upon your death. For more information about your retirement options, see the Payment Options section.
Duty disability pension calculations.
A duty disability retirement is calculated by multiplying your credited years of service times 1.5 percent times your final average compensation, but not less than $6,000 per year .
The Doctors Will Surely Support Me
This is a classic assumption. You may have been treating with your doctor for over 10 years, and because of the longevity of the patient-doctor relationship, the assumption that your treating doctor will take the time to do the necessary paperwork is often taken as a given.
Dont assume instead, have a blunt discussion with your doctor before going down the road of a Federal Disability Retirement application.
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Fill Out The Forms And Send Them My Medical Records
This is, certainly, the basics in filing for Federal Disability Retirement benefits. Perhaps if the 1-year Statute of Limitations is about to expire in a matter of days, you may be forced to take this approach.
With the exception of such an impending circumstance, however, it is never advisable to trust that what the doctors send in to the U.S. Office of Personnel Management will necessarily help your case or that the necessary legal nexus will be established between your position description and the medical conditions described.
Be proactive in affirmatively putting together an effective Federal Disability Retirement application. Be involved in every phase of the process including compiling the proper medical documentation.
Canada Pension Plan Disability Benefits
The Canada Pension Plan provides monthly payments to people who contribute to the plan during their working years.
You may be eligible for CPP disability benefits if:
- you contributed to the CPP for a certain number of years
- you’re under 65 years old
- you have a severe and prolonged mental or physical disability
- your disability prevents you from working on a regular basis
The benefits include payments to children of a person with a disability.
Apply as early as possible if you think you’re eligible for CPP disability benefits. Quebec residents may be eligible for a similar program called the Quebec Pension Plan . It may take several months to process your application.
If you applied for CPP or QPP disability benefits and were told that you’re not eligible, you can ask to have your application reviewed or considered again.
Once you reach age 65, your CPP disability benefit will automatically change to regular CPP payments. Your regular CPP payments may be less than the CPP disability payments you got before.
If so, consider:
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Calculating Your Benefit Amount
The formula for calculating your Social Security benefits and your Disability benefits is exactly the same right up until the very end. Well get into how it diverges in the next section, but for now, well focus on the shared process.
The first step is calculating your average indexed monthly earnings . The Social Security Administration will take your 35 highest-earning years into consideration. For each of those years, it will index your income for inflation and include it up to the taxable maximum . For tax year 2020, this point is $137,700.
Next, the SSA will add up these totals and divide to get your AIME. If you have more than 35 earning years, your lowest years will be excluded. If you have less, the SSA will include a $0 in the calculation for every year youre short.
The last step is to calculate your primary insurance amount from your AIME. To calculate your PIA, the SSA will take a percentage of three different chunks of your AIME. The exact amount of these portions will differ slightly depending on the year you become disabled or turn 62. If you do either in 2021 the SSA will take 90% of your first $996, 32% of the amount between that and $6,002 and 15% of anything that remains. The total is your PIA.
Understanding Social Security Disability Benefits
Some general financial issues may be partially offset by government Social Security disability benefits, which are for people whose medical condition will totally prevent them from working for at least a year or will result in death. For this, there are two programs: Social Security Disability Insurance and Supplemental Security Income .
SSDI is for workers who have accumulated enough work credits to qualify, whereas SSI is for people with low income who haven’t worked enough to qualify for disability insurance. Both programs have the same medical requirements.
The programs pay the equivalent of the non-disability Social Security benefits you would receive at full retirement age, even if you qualify for benefits and retire before you reach that age. When you reach full retirement age, your disability benefits then become Social Security retirement benefits.
Full retirement age is when Social Security considers you eligible for 100% of your benefits based on lifetime earnings. If you want more information about Social Security disability benefits, you can visit the Social Security website.
In addition to providing your disability and retirement income, Social Security disability may pay benefits to some of your family members based on your work. Eligible family members include:
- A spouse aged 62 or older
- A spouse of any age caring for a child who’s under age 16 or disabled
- An unmarried child under age 18 or still in high school and younger than 19
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When Does Disability Pay More Than Social Security
Your PIA is the amount youd receive if you were to qualify for disability benefits. Its not that simple with Social Security benefits, however. While youre technically eligible to begin taking Social Security benefits at age 62, you wont receive your PIA until your full retirement age , which will fall somewhere between 66 and 67. At 62, your benefit amount would be only 70% of your PIA, increasing gradually until you reach your FRA.
This means that between 62 and your FRA, your disability benefit would be higher. And theres an additional benefit to taking disability: By electing for disability instead of Social Security, you allow your Social Security benefit to continue growing.
This disparity is even greater if you happen to become disabled after you turn, say, 63. The reason here is that your Social Security benefits will be determined by your PIA for the year you turn 62, while your disability benefits would be calculated with your PIA for the next year. Provided your AIME is the same or higher, then your PIA for the later year will be higher.
Can I Qualify For Ssi While Collecting Social Security Retirement Benefits
While you cannot collect Social Security retirement and SSDI at the same time to increase your benefits beyond the full retirement amount, there is a program that may allow you to collect additional income.
SSI is a Social Security program that helps seniors and those with a disability who have an extremely low income. To qualify for SSI, you need to meet strict income qualifications and have only a minimum amount of resources. Under this program, your retirement or SSDI checks count as unearned income. According to the SSA, the average retirement benefit in 2017 is $1,360 per month. However, many people receive well below this average.
To qualify for SSI, there is a 2017 limit of $755 per month on unearned income. The limit for couples is $1,123 per month. You also need to meet other financial qualifications to receive these benefits.
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Should I Just Wait For Retirement Benefits
If you’re close to 62, it can be still be worthwhile to apply for SSDI. Here’s why:
- SSDI benefits can be paid up to 12 months before your application date , if you were disabled that far back.
- If you are found disabled, you are no longer penalized for taking Social Security early retirement. You will get a larger disability benefit, plus your full retirement benefit at full retirement age.
- The “disability freeze” will limit the effect of zero earnings years.
- You will get early entitlement to Medicare after 24 months of SSDI payments.
What is the disability freeze? When you retire early, multiple zero earnings years can negatively affect your Social Security retirement benefit computation. But if you receive SSDI, your earnings record is frozen. Thanks to the disability freeze, the years you are disabled and unable to contribute to Social Security will not reduce your potential Social Security benefit amount. Essentially, the SSA will exclude from its benefit calculations any zero-income or low-income quarters of earnings from a period of disability. For more information, read DisabilitySecret’s article on the disability freeze.