Will I lose disability benefits when I get older?

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Q. I have heard that when you get disability benefits, you can lose a portion of it when you turn 60. Is that true?
— Disabled

A. Disability payments are treated differently if your benefits are through a private disability policy or if you’re talking about Social Security Disability Insurance (SSDI).

SSDI benefits would be reduced or eliminated if you go back to work, no longer meet the definition of disabled or if you switch to your Social Security retirement benefits, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

She said the earliest that you can claim Social Security retirement benefits is at age 62, and you cannot claim both benefits at the same time.

“Once you have achieved your full retirement age (FRA), the Social Security Administration will automatically convert you to your retirement benefit,” she said.

Your FRA depends upon the year that you were born but is between the ages of 65 and 67, she said.

“If you have claimed retirement benefits before your full retirement age due to your disability and inability to work, and are subsequently deemed disabled for this purpose, then the Social Security Administration will increase you retirement benefits up to your FRA,” D’Agostini said.

It’s different if you are on SSI, or Supplemental Security Income, which is needs-based, D’Agostini said. Your eligibility goes away if you begin to earn too much in income or acquire more assets in your name.

If you have more than $2,000 of assets, then you can lose the benefits, she said, so be careful about any unexpected inheritance or gifts that may be given in your name. In 2019, eligible persons receive $771 per month, but that can be reduced if you earn too much, she said.

If you have a private disability insurance policy, the policy will dictate to what age it pays benefits.

“Older policies pay until age 65, but newer policies may be extended to age 67,” D’Agostini said. “If you are still working at these ages, and become disabled, some policies will continue to pay for a finite period after the age”

Check your policy to see its specific terms.

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This story was originally published on Dec. 10, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

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