The Social Security Administration (SSA) oversees several social welfare programs that provide cash benefits to those who have either earned or qualified for them. If you suffer a disabling illness or accident before you retire, you may be eligible for monthly disability benefits available through Social Security’s disability insurance program.
Social Security Retirement
By paying into the Social Security system through payroll or self-employment taxes, you can qualify for Social Security retirement benefits once you reach retirement age. While it is possible to qualify for reduced benefits at the age of 62, you’ll become eligible for full benefits between the ages of 65 and 67, depending on the year in which you were born.
Social Security Disability Insurance (SSDI)
If you become disabled before retirement, you may be eligible for Social Security Disability Insurance (SSDI). SSDI pays you cash benefits each month until you reach full retirement age. After that, your SSDI converts to Social Security retirement benefits.
Supplemental Security Income (SSI)
SSI provides monthly cash benefits to disabled and elderly people who have very low incomes. While the SSA administers the Supplemental Security Income program, its funds come from general tax revenue, not Social Security funds. If you receive Social Security Retirement benefits but meet SSI income and asset guidelines, you may be entitled to receive SSI as well. SSI does not convert to retirement benefits after a recipient reaches retirement age.
If you receive SSDI benefits, you don’t have to apply for Social Security retirement benefits when you reach full retirement age: The SSA automatically converts the benefits for you. Your retirement benefit amount remains the same as your SSDI benefit.
Individuals qualify for SSDI because they are unable to earn a living due to their disability. While it is possible to earn some income through work while receiving SSDI benefits, the SSA places a strict monthly limit on your earnings: If you earn more than the earnings limits, you risk losing your benefits. After Social Security enrolls you for retirement benefits, SSDI earnings limits no longer apply. You can then work and earn as much as you wish.
Lainie Petersen writes about business, real estate and personal finance, drawing on 25 years experience in publishing and education. Petersen's work appears in Money Crashers, Selling to the Masses, and in Walmart News Now, a blog for Walmart suppliers. She holds a master's degree in library science from Dominican University.