As you approach traditional retirement milestones while receiving disability benefits, it's natural to wonder what changes—if any—you should expect and how to prepare for this transition.
In this article, we'll cover:
- What happens to SSDI when you reach age 62
- How SSDI converts to retirement benefits at full retirement age
- Why switching to early retirement at 62 is usually a bad idea
- How SSI works differently as you age
- Medicare and Medicaid considerations during the transition
SSDI at Age 62
If you receive SSDI, reaching age 62 doesn't automatically change your benefits. You'll continue receiving SSDI until you reach your full retirement age (FRA), which is 67 for anyone born in 1960 or later. At that point, your SSDI automatically converts to retirement benefits.
You might wonder whether you should switch to early retirement benefits at 62. Generally, this isn't advisable. SSDI typically pays more than early retirement benefits would, and there's no advantage to making an early switch. Stay on SSDI until your benefits convert automatically.
SSDI at Full Retirement Age
When you reach your full retirement age, Social Security will automatically convert your SSDI to retirement benefits. The good news is that your benefit amount will remain the same—you won't see a reduction. The change is primarily administrative.
You'll also notice that Medicare, which you qualified for through SSDI, will continue without interruption. Your coverage simply shifts from disability-based Medicare to standard Medicare for seniors.
SSI and Aging
SSI works differently because it's a needs-based program rather than an insurance program. There's no automatic conversion to another benefit type when you reach 62 or 65. However, you may become eligible for additional programs.
At 65, you become categorically eligible for SSI based on age rather than disability. This doesn't change your benefit amount, but it may simplify future reviews since you won't need to prove continuing disability.
Coordinating Multiple Benefits
Many people receive both disability benefits and eventually Social Security retirement benefits from their own work record or a spouse's record. Understanding how these programs interact is crucial for maximizing your income and maintaining any means-tested benefits you rely on.
Navigating benefit transitions is easier with the right tools. Purple's checking account is designed for disability benefit recipients, with features that help you track resources and stay compliant throughout every stage of life. Open your Purple account.