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Your retirement benefits versus Social Security disability

If you become disabled and are unable to work, you will most likely qualify for Social Security disability. How does disability affect your retirement plans? Can a pension impact your rights to collect Social Security? It is important to have a clear understanding of your rights as well as to best plan to maximize your benefits.

Once you qualify for Social Security disability in California or nationwide, a pension won't impact your disability like earned income; however, it may impact how your benefits are taxed. Depending on your income bracket and whether you are married, your benefits will be subject to different taxes.

In the U.S, full retirement age is based on birth. For those born between 1943 and 1954, full retirement for Social Security purposes is 66-years-old. For those born later, age increases two months per year until the retiree is 67. You can retire before you reach retirement age, however, your benefits will be reduced a certain percentage.

If you are collecting Social Security disability benefits and reach full retirement, the only change is that your benefits will be called retirement benefits rather than disability benefits. This is an automatic switch handled by the Social Security Administration. It is probably not in your best interests to switch from Social Security disability benefits to early retirement benefits because usually disability benefits are paid as if you are at full retirement age, no matter what age you are.

Knowing your options and rights under Social Security disability law is important to maximize benefits now and into retirement. An experienced attorney can review your case and help you devise the best plan to apply and collect the benefits you need.

Source: News Observer, "Social Security disability benefits versus retirement benefits," Holly Nicholson, Aug. 26, 2012

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