What Happens to Your Disability Benefits When You Retire?

Here’s a unique situation that I had never come across: what options do you have available to you when you’ve been receiving Social Security disability payments – and you’re nearing Full Retirement Age (FRA)?  A reader recently asked this question as she and her husband are facing decisions with just such a situation…

Disability Benefits at Retirement Age

As you reach FRA, your Social Security Disability Benefit will automatically convert over to a Retirement Benefit, at the same amount.

What does this mean?  Essentially, once you reach FRA, since you’re now on a Retirement Benefit, you have all of the features available to you as if you had not received any benefit prior to this point and you’re now retired.  So your spouse can collect Spousal Benefits based on your Primary Insurance Amount; Survivor Benefits are also available; and you can choose to Suspend your benefits at FRA (no need to File before suspending, you have effectively filed when your Disability Benefit converted to Retirement Benefits).

By Suspending, you can earn Delayed Retirement Credits (DRCs) of roughly 8% per year up to age 70, which will permanently increase your own benefit and your spouse’s potential future Survivor Benefit.

Obviously, there is no requirement for you to change anything at all once you reach FRA – you can continue receiving the Retirement Benefit the same as you have been receiving the Disability Benefit up to this point.

It’s an unusual situation, understandably, but something to keep in mind if you happen to be facing this circumstance.


IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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  • Hi clarify FRA is this for SS retirement only, excluding, employer retirement, that the SSID amount remains the same upon SS retirement age.

  • Mary –

    I’m not sure what you’re asking… are you nearing retirement age and planning to use your ex-husband’s record for retirement benefits? If so, that should be pretty straightforward – I’d just contact the SSA office and discuss your situation with them.

    Hope this helps –


  • Hi There, I receive two checks a month for disability (long term). I am no longer considered employed with Amherst College. The College sends one check from Standard Insurance and the State sends the second. My EX-Husbands Income has been considerably higher through the years. (we were married over 10 years) How does this work for me. So confused. Thanks, Mary

  • Hi, Roberta –

    Much the same as any insurance that you end up not using (except perhaps life insurance), your disability goes toward paying claims for other workers who have claims.

    Look at it this way: you might pay for auto insurance for years and years and never have an accident. At an advanced age, you decide to sell your car and no longer drive, so you no longer need the insurance. You don’t get anything back for all of those premiums you paid in – they went toward paying claims for other drivers, as well as to pay for the insurance company’s expenses in administering the account. Lastly, the insurance company receives a profit (sometimes) for taking on the risk.

    Hope this helps –


  • My qustion is what Happens to your state disability after you retire we pay into to it each week it is deducted from our pay check it is there but what happenes to it after we retire.I was working an got hurt The workers comp insurance denied my claim so I had to draw my state disablity until I got an Atty when we went to court the insurance had to pay back all my state disablity so my question is what happen to it once you retire

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