Social Security Disability Insurance (SSDI) is a federal program designed to provide financial support to individuals who are no longer able to work due to a disabling condition. The program aims to ensure that you can maintain a basic standard of living during a period when earning a wage is not possible due to your disability.
It’s often mistakenly thought that SSDI benefits end when you reach full retirement age, but this is not the case. Your benefits remain the same, but they are paid by Social Security Retirement funds rather than SSDI funds. To clear up any confusion, this article explains the connection between SSDI and Social Security retirement benefits and how your benefits will continue even after reaching retirement age.
At National Disability Experts, we have extensive experience helping the nation’s disabled individuals get the disability benefits they deserve. Our disability law attorneys and highly trained staff focus exclusively on disability law, disability benefits, and fighting for our clients’ rights through the administrative appeal process and even into federal court when necessary. If you need help preparing, filing, or advocating to get your disability benefits, contact National Disability Experts today.
Transitioning from SSDI to Retirement Benefits
One key to understanding is that when you reach full retirement age, your SSDI benefits do not simply end. Instead, the benefits you receive automatically convert into Social Security retirement benefits at the same monthly amount you were receiving under SSDI. This seamless transition ensures that your financial support continues without interruption, and you are not required to take any additional action for this conversion to happen.
Your SSDI benefits are designed to replace the income you lose when you become unable to work due to a disability. The Social Security Administration (SSA) calculates these benefits based on your highest-earning years, just as it does for retirement benefits. Therefore, when you reach full retirement age, the SSA merely shifts your payments from the SSDI program to the Social Security retirement program, while keeping your monthly benefit the same. This is why SSDI recipients often do not notice any difference in their benefit amount when they reach retirement age.
How the SSA Calculates Your Benefits
Both SSDI and Social Security retirement benefits are calculated using the same method, which is based on your 35 highest-earning years. The SSA adjusts these earnings to reflect changes in average national income during that time. After adjusting the earnings, the SSA averages them out over 35 years to determine your Average Indexed Monthly Earnings (AIME). Your AIME is the figure used to calculate your monthly benefit, whether it’s for SSDI or retirement.
In 2025, the formula used by the SSA to calculate your monthly benefit is straightforward but detailed. Here’s how it works:
- The SSA first takes 90% of the first $1,226 of your AIME.
- Then, it adds 32% of your AIME between $1,226 and $7,391.
- Finally, it adds 15% of any AIME over $7,391.
As an example, let’s say your AIME is $5,950. Here’s how the SSA would calculate your benefit:
- 90% of $1,226 is $1,103.40.
- 32% of $4,724 (the difference between $1,226 and $5,950) is $1,511.68 .
- Since your AIME is below $7.391, no amount needs to be added for the final 15% portion.
This results in a total monthly benefit of $2,615.08. If this amount does not already end in a multiple of $0.10, the SSA rounds down to the nearest $0.10. This rounding down results in a final benefit of $2,615.00.
This calculation method remains the same whether you are receiving SSDI or Social Security retirement benefits. As such, your monthly payment stays consistent once you reach full retirement age and transition to retirement benefits.
The Consequences of Claiming Early Retirement
While it is possible to claim Social Security retirement benefits as early as age 62, it’s important to consider the potential consequences of doing so. When you claim retirement benefits before your full retirement age, your monthly payments are reduced permanently. This reduction can be as high as 30%, depending on how many years you are away from full retirement age.
If you are receiving SSDI, it is typically not advisable to apply for early retirement benefits. Since your SSDI payments are already equal to your full retirement benefit, opting for early retirement would result in a significant reduction in your monthly payments. This reduction would last for the rest of your life, which could severely impact your financial stability in the long term.
For those already on SSDI, it’s more beneficial to continue receiving disability benefits until you reach full retirement age. At that point, your payments will automatically convert to retirement benefits without any reduction in the amount.
Filing for SSDI After Taking Early Retirement
Another situation to consider is if you have already opted for early retirement and later become disabled before reaching full retirement age. In this case, you may still be eligible to apply for SSDI, which would increase your monthly benefit to the full retirement rate until you reach full retirement age. Once you reach full retirement age, your payments would revert to the lower amount associated with early retirement. However, during the time you receive SSDI, you would benefit from receiving the full retirement amount rather than the reduced early retirement payments.
This option can provide a financial boost for individuals who become disabled after opting for early retirement, offering them higher benefits for a period of time.
Additional Factors That May Impact Your Benefits
There are additional factors that may influence the amount of your SSDI or retirement benefits. For instance, the SSA applies a maximum family benefit limit, which restricts the total amount payable to a family when more than one person receives benefits on a worker’s record. This situation often arises when dependents or spouses also qualify for benefits based on your earnings record. Additionally, cost-of-living adjustments (COLA) are applied to SSDI and retirement benefits, ensuring that your payments are adjusted annually to account for inflation. These adjustments ensure that the purchasing power of your benefits is preserved over time.
Getting Help with Your SSDI Application or Questions
Navigating the complexities of the Social Security system can be overwhelming, particularly when it comes to understanding how SSDI and retirement benefits interact. If you need help filing for SSDI or have questions about your existing benefits, it’s wise to seek professional assistance. Contact National Disability Experts for expert guidance. Our team of experienced professionals is well-equipped to help you through the process, ensuring that you receive the benefits you deserve and understand how your disability benefits will transition as you approach retirement age.
By working with National Disability Experts, you can feel confident that you are maximizing your benefits and securing your financial future. Whether you are applying for SSDI for the first time or need help understanding how your benefits will change as you approach retirement, their team is ready to assist you.