My husband begins collecting private disability insurance benefits this month at age 64 from two work policies. Our plan is to defer our respective SS retirement benefits until age 70.5 to maximize monthly benefits (I plan to work until that point). However, one of the disability insurers is requiring my husband to apply for SS disability now, which we understand will be paid to the insurer during the 4 years it is paying benefits. 1) is it true that this will effectively convert SS income benefits at age 65 and require him to forever receive the lower SS benefit, thus thwarting our plan to wait till age 70 to collect SS, and 2) is he required to pursue this, I.e., is there a way to avoid this unintended consequence of receiving private disability payments? Thank you.

Hi,

If your husband is approved for Social Security disability (SSDI) benefits, his SSDI benefits will convert to regular Social Security retirement benefits when he reaches his full retirement age (FRA), not at age 65. However, when he does reach FRA he can voluntarily suspend his benefits until age 70, which would result in him being paid the same benefit rate at age 70 as he would have received if he had simply waited until age 70 to file. By the way, voluntary suspension requests must be submitted in advance, so to get the maximum age 70 rate your husband will need to contact Social Security to request suspension no later than the month prior to the month he reaches FRA. Whether or not your husband could continue receiving his private disability insurance while his Social Security benefits are suspended would depend on the terms of his policy.

Most private and employer disability insurance policies have conditions that require claimants to also file for SSDI benefits. In other words, they are intended to work as a supplement to the person's SSDI. If filing for SSDI is a condition in your husband's policy, then he'll likely either have to file for SSDI or not claim the private disability payments.

Best, Jerry