If you were not born before 1937, turning 65 will not have an immediate effect on your Social Security disability benefits. However, after age 65, you will eventually reach your full retirement age based on your year of birth. Once you reach full retirement age, your Social Security disability benefits will change to retirement benefits.
Basically, no changes are made to your benefits once you reach full retirement age. Your Social Security benefits will be paid on the same date and remain tax free. Your benefit amount remains unchanged as well. One change happens in the name of your benefits. Instead of being called disability benefits, your benefits will be referred to as retirement benefits for Social Security purposes.
The Social Security administration will not change the benefit amounts paid to your family members. Each eligible family member will receive a benefit payment equal to one-half of your entitled benefit amount. Their payments might be reduced if the total amount of their benefit checks tops 150 to 180 percent of your retirement benefit amount. Any Social Security benefits awarded to your ex-spouse will remain the same as well.
One advantage of the benefit change is your ability to earn more money if you’re working. As of 2012, your Social Security disability benefits may be cut off if your monthly earnings top $1,010 per month. However, once you reach full retirement age, you’re able to earn as much money as you can, and nothing will happen to your retirement benefits.
Beware of Taxation
You expose your Social Security retirement benefits to taxation if the amount of money you make is substantial. Any taxable income you receive is added to your Social Security benefit amount. If the total combined incomes exceed income guidelines, a portion of your Social Security benefits are taxed at normal income tax rates. As of 2012, if you’re filing your taxes individually, up to 50 percent of your Social Security benefits are taxed if your annual combined income exceeds $25,000. Up to 85 percent is taxed if your annual income tops $34,000. If you’re married, 50 percent of your Social Security benefits are taxed if your household income is over $32,000. If your household income surpasses $44,000, up to 85 percent of your Social Security benefits are taxed.
- Social Security Administration: Retirement Planner -- Benefits By Year Of Birth
- Social Security Administration: Effect of full retirement age on disability benefits
- Social Security Administration: Retirement Planner -- Benefits For Your Family
- Social Security Administration: Disability Planner -- What Can Cause Benefits To Stop?
- Social Security Administration: Retirement Planner -- Getting Benefits While Working
- Social Security Administration: Benefits Planner -- Income Taxes And Your Social Security Benefits
- Jupiterimages/Photos.com/Getty Images