How Social Security Disability (SSDI) Affects Senior Care Planning and Retirement Decisions
Older adults rely on Social Security and other financial savings to support themselves in retirement. But what happens when an individual must manage a disability?
Social Security Disability Insurance (SSDI) can provide critical support, but individuals will need to clarify its financial impact to plan for the future, including potential long-term care options.
Read on to learn how SSDI can impact senior retirement decisions.
What Is SSDI?
Not all individuals can work full-time or at all due to medical conditions. SSDI gives these individuals an income source as long as they have paid Social Security taxes while working.
As seniors near full retirement age (FRA), which generally is age 66 or 67, seniors can turn to SSDI to help cover the gap if they have a disabling condition that leaves them unable to work as much.
Once an individual reaches FRA, SSDI transitions to normal Social Security retirement benefits. In other words, if a senior experiences a medical challenge that leaves them with a disability prior to hitting FRA, they won’t pay the price for retiring earlier.
Even so, seniors would be wise to consider how SSDI can impact their ability to qualify for Medicare and other benefits that come as they age. SSDI and retirement go hand in hand, but seniors should work with a reputable attorney or financial planner to understand how to support their retirement years financially.
What SSDI Means for Long-Term Care
With SSDI, seniors can gain early access to Medicare, which provides coverage for typical doctor appointments as well as hospitalizations. Seniors won’t need to pay for private insurance once they qualify for Medicare. And they won’t necessarily need to wait two years before applying.
But, at the same time, seniors can’t always depend on Medicare alone to cover elderly care or nursing home costs. Seniors will need other sources of financing, like Medicaid, to cover extensive long-term care costs. And if they are receiving SSDI, they’ll need to be careful about timing. Applying for Medicaid at the wrong time could nullify SSDI benefits.
The Importance of Calculating Benefits
How many years an individual works and how much they earn will determine SSDI benefits. To get the most financial help, seniors will need to time their SSDI claim well. Applying for retirement before the FRA will lower monthly income, but SSDI can offset this, helping their monthly income stay higher.
Seniors should understand that they have options beyond SSDI, as well. Supplemental Security Income (SSI), for instance, can support individuals with limited means, no matter what their work history looks like. Tapping into multiple benefits streams is critical for seniors as they face looming healthcare costs, like in-home care or assisted living.
Focusing on Senior Financial Planning
SSDI has a direct impact on a senior’s financial picture, and careful planning is key. Seniors must be clear on eligibility timelines and coverage choices to determine the right options for their needs.
Working with a Social Security attorney can help demystify confusing jargon and help seniors arrive at a plan that keeps their assets safe while offering the best support for their retirement years.