While there has been significant discussion about the number of older Americans leaving the workforce or actively preparing to do so, it's important to understand that there is still a large contingent of older workers who have no immediate plans for retirement.
Regardless of whether this decision is motivated by financial concerns or a desire to remain active, these older workers do have certain concerns that may not be as pressing to their younger counterparts. For instance, they may wonder what happens to their retirement benefits if they suddenly find themselves disabled.
For instance, consider a 54-year-old worker who suffers a serious back injury or is diagnosed with a chronic medical condition, and is able to secure Social Security disability benefits.
Will this receipt of disability benefits have any impact on the retirement benefits awarded by the Social Security Administration?
The full retirement age for retirement benefits is currently 66 for those born between 1943-1954, and is expected to rise to 67 for those born in 1960 and after. The FRA is essentially the age at which a person is eligible for the full amount of retirement benefits, meaning no more and no less.
While this is an important consideration for those planning their retirement, it isn't of much concern as far as disability benefits are concerned. Indeed, the SSA simply treats a person as having reached FRA on the date of their disability (regardless of age), relying more on their career earnings when calculating the amount of disability benefits.
Consequently, if the disabled 54-year-old worker described above continues to receive uninterrupted disability benefits until he reaches the full retirement age, he will see no change in benefits upon reaching FRA. Indeed, all that will occur is that he will be moved internally from disability records to retirement records.
It should be noted, however, that if the 54-year-old worker recovered to some degree and was able to secure some type of employment, the ensuing years of low wages and/or no wages while receiving disability benefits would not be used in calculating his retirement benefits.
To learn more about your rights and options as they relate to disability benefits, please consider speaking with an experienced legal professional as soon as possible.