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Retirement and Disability Benefits

Understanding how Social Security benefits change over time can help you plan for long-term financial stability.

 

I. What Happens to SSDI as You Reach Retirement Age?

If you receive SSDI, your benefits generally continue as long as you remain eligible. When you reach your Full Retirement Age (FRA), the Social Security Administration automatically converts your SSDI benefit to a Social Security retirement benefit. The payment amount usually remains the same; only the program category changes. You do not need to take any action.

Important: This conversion happens at Full Retirement Age, not necessarily at age 65. For most people, FRA is between 66 and 67, depending on year of birth.

 

Early vs. Full Retirement Age

You may choose to begin Social Security retirement benefits as early as age 62. However, claiming benefits early will permanently reduce the monthly payment amount. If your FRA is 67, beginning benefits earlier reduces payments by approximately:

  • Age 62: about 30% reduction

  • Age 63: about 25% reduction

  • Age 64: about 20% reduction

  • Age 65: about 13.3% reduction

  • Age 66: about 6.7% reduction

 

Working While Receiving Social Security Retirement Benefits

If you begin receiving retirement benefits before reaching Full Retirement Age, Social Security limits how much you can earn from work. For 2026:

  • Annual earnings limit before FRA: $24,480. Benefits are reduced by $1 for every $2 earned above the limit.

  • In the year you reach FRA, the earnings limit is $65,160. Benefits are reduced by $1 for every $3 earned above the limit.

  • Once you reach FRA, there is no limit on earnings and work income does not reduce your retirement benefit.

Note: Social Security does not count pensions, annuities, investment income, interest, or veterans’ or other government retirement benefits. For self-employment, only net income is counted.

 

II. What Happens to SSI at Retirement Age?

If you currently receive SSI, you are required to apply for Social Security retirement benefits at age 62. This is because SSI is a needs-based program: if any other cash benefits are available to you, you must apply for them.

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Social Security will determine your retirement benefit amount. You may receive both Social Security retirement and SSI at the same time, so your overall monthly benefit may not decrease. Example: If your retirement benefit is $600, you may receive $580 (after the $20 general exclusion) as retirement and $414 as SSI to meet the Federal Benefit Rate of $994 for 2026.

 

III. If You Receive Both SSDI and SSI

Some individuals receive both SSDI and SSI (“concurrent benefits”). When these individuals reach age 62, SSDI continues until Full Retirement Age, at which time SSDI converts to Social Security retirement benefits. SSDI recipients are not required to claim early retirement benefits, which helps preserve their full retirement amount. SSI countable earnings calculations and asset limits still apply.

 

IV. Health Coverage: Medicare and Medicaid

Health coverage may continue depending on which benefits you receive:

  • SSDI recipients typically receive Medicare, which continues when SSDI converts to retirement benefits.

  • SSI recipients generally receive Medicaid, which may continue if eligibility rules are met.

  • Individuals receiving both SSDI and SSI may qualify for both Medicare and Medicaid.

 

Understanding Your Benefits Network

Before making changes to employment or benefits, it can be helpful to review all programs you currently receive. This may include income support, healthcare coverage, housing assistance, or employment services.

Consider working with a case manager, benefits counselor, or employment specialist to review your benefits and understand how different programs interact. Being proactive and informed can help you evaluate different scenarios and make decisions that support your health, financial stability, and long-term goals.

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Questions to consider:

  • Do I want to work part time and keep most of my benefits?

  • What is the income eligibility requirement for each of my benefit programs?

  • If I change my work status, what are my benefit options?

  • Which assistance programs do I need to keep working or going to school?

  • What if ‘feeling better’ doesn’t last and I can’t work?

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