Social Security Disability Insurance (SSDI) is indeed a lifeline for many Americans living with disabilities. However, making ends meet on SSDI income alone can be challenging. The good news is, there are several strategies you can employ to maximize your SSDI benefits.
You can maximize your SSDI benefits through a Cost-of-Living Adjustment (COLA), obtaining spousal benefits based on your record, filing as soon as possible, taking up a part-time job that falls under the substantial gainful activity (SGA) limit, and applying for back pay.
Navigating the SSDI system can be complex, but with the right information and strategies, you can maximize your benefits and improve your financial stability. Read on to learn more about each of these strategies and how they can help you make the most of your SSDI benefits.
SSDI Benefit Amount in 2023
In 2023, the maximum monthly payment for SSDI will be $3,627. However, most people receive less than this maximum amount. The average monthly SSDI payment is around $1,483.
Calculating SSDI Benefits
Approval for SSDI doesn’t guarantee a specific payment amount from the Social Security Administration (SSA). Instead, your benefit amount depends on your past earnings and the amount of taxes you’ve paid into the Social Security system.
While you can estimate your own SSDI benefit amount, the quickest and most accurate way to do so is by signing up for a free mySocialSecurity account. If you’re considering applying for SSDI, you’ll need to create an account anyway for updates. Once you have an account, you can see the exact amount of SSDI benefits the SSA estimates you’ll receive.
Comparing SSDI and Retirement Income
If you qualify for both SSDI and Social Security retirement benefits, your monthly payment will be the higher of the two. However, keep in mind that you won’t receive your full retirement benefit until you reach your full retirement age, which varies from 66 to 67 years old, depending on your year of birth.
You also have the option to take early retirement. However, compared to early retirement benefits, applying for SSDI will result in a higher monthly payment, and it includes health insurance coverage. This makes SSDI a valuable resource for those living with disabilities.
Maximizing Your SSDI Benefits
If you’re an SSDI beneficiary, it’s important to understand the various strategies that can help you maximize your SSDI income. Here are some key methods:
Cost-of-Living Adjustment (COLA)
One way to increase your SSDI benefits is through a COLA. This adjustment is made regularly for Social Security recipients, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If the CPI-W increases, the COLA will take effect in December of the following year. However, if there’s no increase in the CPI-W, there won’t be a COLA for that year.
File Your Claim Immediately
The benefit amountyou receive from the SSA can vary depending on your income and employment history. It’s beneficial to have as many productive years as possible before a disability forces you to stop working. However, if your condition worsens and causes you to miss significant time from work, it’s crucial to start the process of filing for benefits immediately.
Continue Working
You can also continue working while receiving SSDI benefits, but there are certain rules and limits to consider. The SSA allows SSDI recipients to work as long as their earnings do not exceed a certain limit known as substantial gainful activity (SGA).
In 2023, the SGA limit is $1,470 per month for non-blind individuals and $2,460 per month for blind individuals. This translates to an annual income of $17,640 for non-blind individuals and $29,520 for blind individuals. If your earnings exceed these limits, the SSA may consider you capable of SGA and you could lose your SSDI benefits. The SGA limit changes every year, so be sure to check the SSA website to ensure you are not exceeding those limits.
Spousal Benefits
If you’re married, your spouse can start receiving a spousal benefit based on your earnings history as early as age 62. However, if they start receiving this benefit before reaching their full retirement age, the benefit may be reduced to as little as 32.5% of your primary insurance amount.
They’ll be eligible for the full spousal benefit, which is up to 50% of your Social Security benefit, when they reach their full retirement age (usually age 66 or 67). If your spouse is eligible for a retirement benefit based on their own earnings and that benefit is higher than the spousal benefit, then they will receive the retirement benefit instead.
Back Pay
Almost all individuals who apply for SSDI receive back pay to compensate for the time it took for their claims to be processed and approved. If you qualify for SSDI, Social Security will pay back benefits for up to a year prior to your application date or protected filing date. The earlier you notify the SSA in writing or initiate an online application for SSDI, the more back pay you may be eligible to receive. If you delay in filing an application, the backpay may be limited.
Provide Sufficient Medical Evidence
Often, people don’t receive the full amount of SSDI benefits they’re entitled to because they don’t complete the application correctly. To qualify for SSDI, you must provide sufficient medical evidence documenting your condition from multiple medical providers. Be detailed about how your condition has impacted your life and led to unemployment.
Will My Benefits Increase if My Health Declines?
The amount of SSDI benefits you receive is not influenced by the severity of your health condition. In other words, even if your condition worsens, your SSDI payments will remain the same. This is because SSDI payments are determined by your work record, not the severity of your disability.
If your SSDI claim is successful, the benefits you receive will be equivalent to what you would have received at full retirement age. The SSA approves your claim based on its criteria for total disability. This means you have a serious medical condition that prevents you from working and is expected to last at least a year or possibly result in death. Even if your health deteriorates further, you will still be considered totally disabled.
However, if your health improves, you may risk losing your benefits. The SSA regularly reviews the health status of SSDI recipients to determine their continued eligibility for benefits. If a review finds that your health has improved to the point where you can return to work, your benefits will be discontinued.
Conclusion
There are several strategies to maximize your SSDI benefits. The most crucial step is to correctly file an application with comprehensive medical evidence. A disability attorney can assist you in this process, ensuring that you receive the full amount of SSDI benefits to which you are entitled.
