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SSDI Retirement Benefits
Social Security benefits replace a percentage of your earnings when you retire, become disabled or die. Your benefit payment is based on how much you earned during your working career. Higher lifetime earnings result in higher benefits. If there were some years when you did not work or had low earnings, your benefit amount may be lower than if you worked steadily.
Choosing when to retire is one of the most important decisions you will make in your lifetime. If you choose to retire when you reach your full retirement age, you will receive your full benefit amount. But if you retire before reaching full retirement age, you will receive reduced benefits. The following chart lists the full retirement age by year of birth.
Full retirement age
If you were born from 1943 to 1960, the age at which full retirement benefits are payable increases gradually to age 67. If you were born in 1944 or earlier, you already are eligible for your full Social Security benefit. The following chart will guide you in determining your full retirement age.
Year of Birth Full Retirement Age
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 or later 67
NOTE: Although the full retirement age is rising, you should still apply for Medicare benefits three months before your 65th birthday. If you wait longer, your Medicare medical insurance (Part B) and prescription drug coverage (Part D) may cost you more money.
If you choose to delay receiving benefits beyond your full retirement age, your benefit will be increased by a certain percentage, depending on the year you were born. The increase will be added in automatically each month from the time you reach full retirement age until you start taking benefits or reach age 70, whichever comes first. The percentage of the increase is based on when you were born. For more information on delayed retirement credits, go to the Retirement Planner.
You may start receiving benefits as early as age 62. However, if you start your benefits early, your benefits are reduced. Your benefit is reduced about one-half of 1 percent for each month you start your Social Security before your full retirement age. For example, if your full retirement age is 66 and you sign up for Social Security when you are 62, you would only get 75 percent of your full benefit.
NOTE: The reduction will be greater in future years as the full retirement age increases.
If you work and get benefits
You can continue to work and still receive retirement benefits. Your earnings in (or after) the month you reach full retirement age will not reduce your Social Security benefits. In fact, working beyond full retirement age can increase your benefits. However, your benefits will be reduced if your earnings exceed certain limits for the months before you reach your full retirement age.
If you work but start receiving benefits before full retirement age, $1 in benefits will be deducted for each $2 in earnings you have above the annual limit. In 2011, the limit is $14,160.
In the year you reach your full retirement age, your benefits will be reduced $1 for every $3 you earn over a different annual limit ($37,680 in 2011) until the month you reach full retirement age.
Once you reach full retirement age, you can keep working, and your Social Security benefit will not be reduced no matter how much you earn.
For more information about how work affects your benefits, ask for How Work Affects Your Benefits (Publication No. 05-10069).
NOTE: People who work and receive disability or Supplemental Security Income payments have different earnings rules. They immediately must report all of their earnings to Social Security no matter how much they earn.
Retirement benefits for widows and widowers
If you are receiving widow's or widower's benefits, you can switch to your own retirement benefits as early as age 62, assuming your retirement benefit is more than the amount you receive on your deceased spouse's earnings. In many cases, you can begin receiving one benefit at a reduced rate and then switch to the other benefit at the full rate when you reach full retirement age. The rules are complicated and vary depending on your situation, so talk to a Social Security representative about the options available to you.
For more information about retirement benefits, ask for Retirement Benefits (Publication No. 05-10035).
If you cannot work because of a physical or mental condition that is expected to last at least one year or result in death, you may be eligible for Social Security disability benefits.
Our disability rules are different from those of private plans or other government agencies. The fact that you qualify for disability from another agency or program does not mean you will be eligible for disability benefits from us. And having a statement from your doctor indicating you are disabled does not mean you will automatically be eligible for Social Security disability benefits. For more information about Social Security disability benefits, ask for Disability Benefits (Publication No. 05-10029). You can apply for Social Security disability benefits at Apply Online For Disability Benefits.
People with disabilities, including children, who have little income and few resources, also may be eligible for disability payments through the Supplemental Security Income (SSI) program. For more information about SSI, ask for Supplemental Security Income (SSI) (Publication No. 05-11000).
If you become disabled, you should file for disability benefits as soon as possible, because it usually takes several months to process a disability claim. We may be able to process your claim more quickly if you have the following when you apply:
• Medical records and treatment dates from your doctors, therapists, hospitals, clinics and caseworkers;
•Your laboratory and other test results;
•The names, addresses, phone and fax numbers of your doctors, clinics and hospitals;
•The names of all medications you are taking; and
•The names of your employers and job duties for the last 15 years.
Your benefits may be taxable
Some people who get Social Security will have to pay taxes on their benefits. Less than one-third of our current beneficiaries pay taxes on their benefits.
You will have to pay taxes on your benefits if you file a federal tax return as an "individual" and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. For more information call the Internal Revenue Service's toll-free number, 1-800-829-3676.