Financial advisors should know what happens to SSDI at 65 . Nothing . But your disability client assumes that at “ retirement ” they will earn more money .
Disabilty rates rise with age
Social Security Disability Insurance beneficiaries as a percent of insured workers , June 2020
17.1 %
11.4 %
6.9 %
%
4.5
0.2 % 0.5
1.1 % % 3.1 %
2.0 %
under 25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-66
Source : CBPP based on data from Social Security Administration
The risk of disability rises dramatically with age . I concentrate in the Senior market where the largest segment of the population are on disability benefits . The typical beneficiary is in his or her late 50s and …
Need to know — Once on SSDI for 24 months , they become eligible for Medicare Part B . They must pay for it , and it is not free as most assume . However , depending on income , your client may be eligible for free or reduced Part B through a program known as the Medicare Savings Plan .
Once your client has Part B , she can get a Medicare Supplement or a Medicare Advantage plan . I ’ ve always felt that people on disability are lost in the system as most do not know that they can supplement their Medicare . Most people think that they are not eligible to purchase a Medigap plan until age 65 — and they are correct . Most states do not mandate the sale of Medicare Supplements to those under age 65 , and disability members then assume they can ’ t purchase any type of product to supplement their Medicare . Medicare Advantage is available to anyone on SSDI , in all states .
What happens at 65 ?
Financial advisors should know what happens to SSDI at 65 . Nothing . But your disability client assumes that at “ retirement ” they will earn more money . Not true and …
Need to know — At Full Retirement Age ( FRA )( between 66 and 67 ; no longer at 65 ), people on disability will be switched from the disability trust fund to the retirement trust fund . This doesn ’ t impact the member at all . The amount a person is able to draw while on SSDI is based on work history . Retirement is based on that same work history , therefore , the amount usually remains exactly the same at 66 or 67 . This is bad news to your clients , who are hopeful they will get a raise . At their FRA , they no longer have annual reviews or have a cap on their earnings , but their payments remain the same .
You don ’ t have to hold the national designation of Social Security Advisors to be a great resource for your clients . Master these few items above , and you ’ ll be able to answer the majority of questions that your SSDI clients want to know . Refer them to their local Social Security office for all other questions .
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