Social Security disability vs retirement at 65 - is it worth spending down inheritance assets?

There's some confusion in what you were told. SSDI (Social Security Disability Insurance) is not asset-based - you could have a million dollars in the bank and still qualify if you meet the medical and work credit requirements. SSI (Supplemental Security Income) is the program with strict asset limits. What's true is that at your Full Retirement Age (FRA), which is 66 and some months for someone your age, SSDI benefits convert to retirement benefits, but the amount stays the same. They don't convert at 65. The problem is that since you've already taken early retirement at 62, applying for SSDI now is complicated. If approved, they would essentially adjust your benefit to your full disability rate and remove the early retirement reduction. When you reach FRA, it would convert to retirement at that same rate. Whether it's worth pursuing depends on how much higher your disability benefit would be compared to your current reduced retirement benefit. The $100 difference they mentioned might be accurate in your specific case.

they totally mix up SSI and SSDI when they talked to you!! happens ALL THE TIME even with the reps who should know better! i went thru this last year. the inheritance doesnt matter for SSDI at all. BUT since you already took early retirement at 62 it gets really complicated now.

You've gotten some incorrect information. Here's what's actually happening: 1. SSDI has no asset limits (the inheritance doesn't matter) 2. Your disability benefits would NOT "cash out" at 65 - they convert to retirement at your Full Retirement Age (which is 66 and some months for someone your age) 3. Since you already took retirement at 62, applying for SSDI now creates a complicated situation If you were to qualify for SSDI now, they would adjust your benefit to eliminate the early retirement reduction you took at 62. It might result in a higher monthly amount than you're currently receiving. However, at age 64, you're facing a very tight timeline. SSDI applications often take 1-2 years to process with appeals. By the time you're approved, you might be at or near your Full Retirement Age anyway. The SSA rep was probably looking at this timeline and your specific earnings record and concluded the effort wouldn't result in a significant increase.

This is SO typical of the conflicting information you get from Social Security! I was told THREE different things by THREE different reps about my disability conversion. I couldn't get through to anyone who could give me consistent answers for WEEKS. Then I found this service called Claimyr (claimyr.com) that got me through to an actual SSA agent in about 20 minutes instead of waiting on hold for hours. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I reached was actually knowledgeable and explained that since I had already taken early retirement, applying for SSDI would potentially increase my benefit by removing the early retirement reduction - but only if I could prove my disability onset date was before I applied for early retirement. Something to consider in your situation.

u should def spend down that inheritance on stuff u actually need!! a roof and car ARE necessities not luxuries. then apply for SSI to supplement ur SS benefits. thats what i did. got rid of that 'extra money' by fixing my house which needed it anyway.

What a MESS the system is!!! I've been fighting with Social Security for 2 YEARS trying to sort out a similar situation. Every rep tells you something different and half of them don't know what they're talking about!! The asset limits are for SSI not SSDI but try explaining that to some of these people who work there! The whole system is designed to confuse seniors and deny benefits we've earned!!

To directly answer your original question: No, disability benefits don't automatically "cash out" at 65. SSDI benefits convert to retirement benefits when you reach your Full Retirement Age (FRA), which for someone your age is approximately 66 years and 4 months. Regarding the inheritance and your options: 1. Your inheritance affects SSI eligibility (which has asset limits), but not SSDI eligibility 2. You can apply for SSDI even though you're receiving early retirement benefits 3. If approved for SSDI, your benefit would be recalculated to remove the early retirement reduction 4. At your FRA, your disability benefit would convert to retirement at the same amount Whether this process is worth it depends on: - How much higher your non-reduced benefit would be - How long the application/appeal process might take - Whether you can prove your disability began before you applied for early retirement Given your age (64), you might only receive the potentially higher SSDI amount for a short time before FRA conversion. This is likely why the rep suggested it might not be worth pursuing.

My cousin went thru something similar. She was 63 and got disability. Only raised her payment like $75 a month but she said it was worth it. She got backpay too but I think that's cuz her disability started before she took retirement.