Transition from Social Security Disability to Social Security Retirement

Once you reach full retirement age (FRA)—which is between 66 and 67, depending on your birth year—your Social Security Disability benefits will automatically convert to Social Security Retirement benefits.

• No Action Required: You don’t need to apply for retirement benefits or do anything special to make the switch. The Social Security Administration (SSA) automatically converts your disability benefits to retirement benefits once you reach your FRA.
• No Change in Payment Amount: Your monthly payment amount will remain the same when your disability benefits convert to retirement benefits. The amount you were receiving under SSDI is the same amount you will receive under Social Security Retirement. The only difference is that the name of the benefit changes.

How the Payment Amount is Determined

Your Social Security Disability payment amount is based on your work history and the earnings on which you paid Social Security taxes. When you reach retirement age, the same formula used to calculate your SSDI benefits will be applied to your retirement benefits.

• Disability Benefit vs. Retirement Benefit: The amount you receive from Social Security Disability is typically the same as the amount you would receive from Social Security Retirement, assuming you don’t delay claiming retirement benefits. The SSA doesn’t penalize you for receiving disability benefits prior to reaching retirement age.
• No Reduction for Early Retirement: Social Security Disability benefits are calculated based on the assumption that you are unable to work due to a disability. As such, when you transition to retirement benefits, the SSA doesn’t reduce your benefits for early retirement, even though the standard rule is that benefits are reduced for those who claim retirement before full retirement age.

Impact of Working on Social Security Disability and Retirement

The rules about working while on Social Security Disability and retirement benefits differ slightly.

• Social Security Disability (SSDI): If you are receiving SSDI benefits and continue to work, the SSA has a set of rules called Substantial Gainful Activity (SGA). If you earn more than a certain amount each month (the threshold changes yearly), the SSA may determine that you are no longer disabled and stop your benefits.
• Social Security Retirement: Once you switch from SSDI to retirement benefits at full retirement age, there is no longer an earnings limit. You can work and earn as much as you want without affecting your Social Security Retirement benefits. However, if you are receiving SSDI and have not yet reached your full retirement age, your benefits can still be affected by your earnings.

The Effect of Early Retirement on Social Security Disability Benefits

If you’re under full retirement age and you apply for early Social Security Retirement benefits while still receiving SSDI benefits, your SSDI benefits will continue without any interruption, as they are already based on your work history. However, when you claim early retirement (before full retirement age), your Social Security retirement benefits are typically reduced.

• Claiming Early Retirement: If you choose to begin receiving retirement benefits before full retirement age (as early as 62), your monthly Social Security retirement benefits will be reduced. However, you won’t experience any reduction in SSDI benefits if you’re already receiving them, as SSDI is not subject to early retirement penalties.
• How Early Retirement Affects Future Benefits: If you continue to receive SSDI and are transitioning to retirement benefits, claiming early retirement does not reduce your SSDI amount. But, if you were to start taking retirement benefits separately, you would face the reduction of benefits based on how early you apply.

Impact on Family Benefits

When you transition from Social Security Disability benefits to retirement benefits, family benefits (such as those for a spouse or dependent child) will also be affected. Both SSDI and Social Security Retirement benefits can provide for family members, but there are some differences:

• Family Benefits: If your family members are eligible for benefits based on your SSDI, they will continue to receive those benefits after you convert to retirement benefits. The conversion of SSDI to retirement benefits doesn’t change the eligibility or amount of family benefits.
• Spousal Benefits: A spouse who is eligible for benefits based on your work record can receive spousal benefits once you begin receiving retirement benefits. Spousal benefits are generally up to 50% of your monthly retirement benefit amount, depending on the spouse's age and work history.