Social Security benefits are crucial for many Americans, whether through Social Security Disability Insurance (SSDI) or retirement benefits. While both types of benefits share payment dates, their eligibility requirements and benefit amounts differ significantly. Let’s cut into these differences to help you know what to expect.
Eligibility
To receive Social Security retirement benefits, you need to file at age 62 or later. Moreover, you must have worked for at least ten years. Ideally, to avoid any reduction in benefits, you should have worked for at least 35 years. This ensures that your benefits are maximized based on your lifetime earnings.
SSDI
For SSDI, you must have a qualifying disability and have worked the necessary number of years based on your age. The Social Security Administration (SSA) has specific criteria for what constitutes a qualifying disability, typically one that prevents you from performing substantial gainful activity.
Payment Schedule
Both SSDI and retirement benefits follow the same payment schedule, but when you receive your payment depends on your birthdate. Here’s how it works:
- Birthdays from 1-10: Payments are typically made on the second Wednesday of the month. For example, if your birthday falls between the 1st and the 10th, you might receive your payment on July 10.
- Birthdays from 11-20: Payments are made on the third Wednesday of the month. Thus, if your birthday is between the 11th and the 20th, you could expect your payment on July 17.
- Birthdays from 21-31: Payments are made on the fourth Wednesday of the month. Hence, those with birthdays from the 21st to the end of the month would receive their payments on July 24.
These dates apply to recipients who are not on Supplemental Security Income (SSI) and did not start collecting benefits before May 1997.
Benefit Amounts
The amount you receive from SSDI is individualized, based on your earnings history and how much you’ve paid into the Social Security system through taxes. While the maximum SSDI benefit can be as high as $3,822 per month, the average SSDI check is around $1,537. Achieving the maximum benefit is rare due to the impact of the disability on the individual’s ability to work and earn income.
Retirement Benefits
Retirement benefits also vary based on your lifetime earnings. The average retirement benefit is approximately $1,916 per month, but it can go up to $4,873 for those who have maximized their earnings and contributions. It’s worth noting that annual Cost-of-Living Adjustments (COLAs) help increase these benefits to keep up with inflation, although rising living costs can still erode the buying power of these payments over time.
Key Considerations
- Work History: The length and consistency of your work history play crucial roles in determining both SSDI and retirement benefits.
- Filing Age: For retirement benefits, the age at which you file can significantly impact the amount you receive. Filing before full retirement age can reduce your benefits, while filing later can increase them.
- Disability Qualification: For SSDI, the nature and severity of your disability must meet SSA’s stringent criteria to qualify for benefits.
In summary, while SSDI and retirement benefits may be paid on the same schedule, knowing the specific eligibility requirements and how your work history affects your benefit amounts is essential. By planning accordingly, you can maximize your benefits and ensure a more secure financial future.
FAQs
Can I receive both SSDI and retirement benefits?
No, you cannot receive both SSDI and retirement benefits simultaneously.
When should I apply for Social Security retirement benefits?
You can apply at age 62, but waiting until full retirement age or later can increase your benefit amount.
How does COLA affect my Social Security benefits?
COLA adjustments help increase your benefits to keep up with inflation, but rising costs can still impact your buying power.
What determines my SSDI benefit amount?
Your SSDI benefit amount is based on your average lifetime earnings and contributions to Social Security.
Can my SSDI benefits be reduced?
Yes, SSDI benefits can be reduced if you start earning income above a certain threshold while receiving benefits.
