Will LTD payments count toward Social Security earnings limit after wife's STD ends?
I'm trying to help my wife make the right decision about her Social Security benefits. She's been on short-term disability since August and it ends this month. Her long-term disability just got approved (and she might qualify for SSDI in a few months). She turns 65 in March 2025 and already filed to start her retirement benefits then (with first payment in April). The question is - do her LTD payments count as earnings against the $23,200 earnings limit she'll have until reaching her full retirement age? If so, we're thinking she should cancel her SS application and wait until her LTD ends before starting benefits. Does that make sense or am I missing something? She's worried about potentially getting hit with an overpayment later.
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Jamal Harris
Yes, you're right to be concerned, but there's an important distinction. LTD payments themselves typically don't count toward the Social Security earnings test limit. However, if the LTD policy requires her to apply for SSDI and she's approved, there would likely be an offset where either the LTD reduces her payments by the SSDI amount or vice versa depending on the policy. What you need to watch for is if she's doing any actual work while receiving LTD - that would count toward the earnings limit.
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Zoe Stavros
•Thank you for clearing that up! So if she's just receiving LTD and possibly SSDI later, but not working at all, those benefits wouldn't count against the $23,200 earnings limit? That's a huge relief.
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GalaxyGlider
my wife was in similar situation last yr but she was 63. her Ltd did NOT count against earnings limit but her insurance company reduced her Ltd by the exact amnt of her disability when it got approved. check the fine print on her Ltd policy!!
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Zoe Stavros
•Thanks for sharing your experience. I'll have her check the policy details. Did your wife end up applying for regular Social Security retirement benefits or stay on SSDI?
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Mei Wong
The previous responses are correct. LTD payments are not considered earnings for the Social Security annual earnings test. Only actual wages from work or net earnings from self-employment count toward that limit. However, if your wife is approved for SSDI, be aware that switching from disability to retirement benefits at FRA happens automatically, and there are different considerations about when that might be advantageous. Also, if she's already applied for retirement benefits to start in March but now wants to withdraw that application, she needs to submit a written withdrawal request to SSA before benefits begin.
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Zoe Stavros
•This is really helpful information. I didn't realize she'd need to submit a written withdrawal request. Do you know if there's a specific form for that or just a letter? And are there any deadlines we need to be aware of?
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Liam Sullivan
Just went thru this with my husb. Call SSA RIGHT AWAY to cancel that retirement application if you're going to!!! We waited too long and it was a NIGHTMARE to fix. His first check had already processed and we had to repay it before they would let him withdraw the application.
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Zoe Stavros
•Oh wow, thank you for the warning! We'll call them immediately. Did you have trouble getting through on the phone?
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Amara Okafor
I experienced this exact situation last year. Tried calling SSA for weeks and could never get through - constant busy signals and disconnects. Finally used a service called Claimyr (claimyr.com) that got me connected to an agent in about 15 minutes. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Worth it for something this time-sensitive where you need to withdraw an application before benefits start. The agent I spoke with was super helpful and processed my withdrawal request right over the phone.
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Zoe Stavros
•Thank you! I've been worried about the phone issues. I'll check out that service - getting this resolved quickly is definitely a priority.
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Giovanni Colombo
You guys are making it WAY more complicated than it is. LTD isn't earnings period the end. And BTW disability benefits convert to retirement at FRA automatically so it doesn't matter anyway.
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Jamal Harris
•You're correct that LTD isn't counted as earnings, but there are important timing considerations here. If his wife starts retirement in March at 65 (before FRA), then gets approved for SSDI later, the situation gets complicated. The automatic conversion happens only if she's already on SSDI when reaching FRA. That's why understanding all aspects of the situation matters.
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Fatima Al-Qasimi
I'm a bit confused about the whole LTD/SSDI relationship. If she gets approved for SSDI, would she get both? Or does one replace the other? And does starting retirement early permanently reduce her benefit amount even if she later qualifies for disability? The whole system is so complicated!
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Mei Wong
•Great questions. Typically, LTD policies have provisions requiring you to apply for SSDI, and then they reduce your LTD payment by the amount of SSDI you receive (so the total remains the same). As for retirement vs. disability: if she takes reduced retirement at 65 and later qualifies for SSDI, SSA will adjust her payments to remove the early retirement reduction for any months she's entitled to disability benefits. If disability continues to FRA, her retirement benefit at that point would convert to the full, unreduced amount.
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GalaxyGlider
i forgot to mention this before but make SURE she talks to her doctor about the disability application becuz that makes a HUGE difference!!! my wife's first app was denied but when her doctor wrote better notes about her limitations she got approved on reconsideration
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Zoe Stavros
•That's really good advice - thank you! Her doctor has been supportive so far, but I'll make sure they understand how important their documentation is for the disability application.
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Liam Sullivan
One more thing - if she's turning 65 she needs to apply for Medicare NOW even if she delays SS benefits!!! Don't mess this up or you'll pay penalties forever!!!!!
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Zoe Stavros
•You're right! We already took care of the Medicare application, so she's all set there. Part A and B will start in March when she turns 65. Thanks for the reminder though - that would've been a costly mistake to make.
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Samantha Johnson
Just wanted to add one more consideration that might be relevant - if your wife does decide to withdraw her Social Security application and wait, make sure you understand the implications for any spousal benefits you might be eligible for. If you're close to retirement age yourself, her decision to delay could affect your options for claiming spousal benefits. Also, since she's already been approved for LTD, that's a good sign that her medical documentation is strong, which should help with the SSDI application if she decides to pursue that route. The fact that multiple people here have confirmed LTD doesn't count toward the earnings limit should give you confidence in moving forward with whatever decision makes the most financial sense for your situation.
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Mei-Ling Chen
•This is excellent advice about spousal benefits - something we hadn't fully considered! I'm 62 and was planning to wait until my FRA to claim, but you're right that her timing could affect my options. We'll need to run the numbers on different scenarios. And yes, the strong medical documentation from her LTD approval does give us more confidence about the SSDI application. It sounds like the consensus here is clear that LTD won't count against the earnings limit, so now it's really about optimizing the timing of everything. Thank you for adding that perspective!
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