Hello. I am 61 years old. Previous SS statements indicated I would receive approximately $1,800 monthly in SS benefits upon full retirement age as was indicated upon 42 years of earnings. Started work at age 15.
Due to cancer, I changed my career to a contract court reporter and earned much less - to decrease stress. The next SS statement indicated the SS benefits would be $1,600. I think it is due to the major decrease in earnings. I was previously an IT Project Manager earning $90k annually and stressed to the max!
Due to health issues, I’ve been told by an attorney that I could receive SS disability NOW. I do not have a real pension/401k, etc. The first 3 years of earnings as a contract court reporter were very low earnings (pandemic didn’t help either). As a court reporter, this is the first year (year 4) of earnings above $40k. I plan on continuing as a court reporter while receiving SS benefits at full retirement age. I’ve decreased stress and work typically 3 days/week.
My question is: if my monthly benefit will continue to decrease due to lower earnings, should I file for disability now? It seems that the benefit may be the same amount with current lower earnings by full retirement age.
I know there is a limit to what one can earn while receiving SS.
If either way -file disability now v full retirement age - will be approximately the same, I need to know if I should file now.
Thank you for any advice you can give.
Pam
Hi Pam. Your actual benefit rate can't decrease due to a switch to a lower paying job. Additional years of earnings can only increase a person's benefit rate, they can't decrease it. What can decrease is your benefit estimate if it includes projected future earnings that don't materialize because of a change in your work.
Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings. If you change to a lower paying job and if your earnings aren't among your highest 35 years of wage-indexed earnings, then those earnings are simply disregarded when calculating your benefit rate.
It sounds like what happened with you is that your previous benefit estimate was based on the assumption that you'd continue earning $90K annually, and those projected earnings were included when calculating the estimate. But, if those projected earnings don't materialize because you stop working or change to a lower paying job, then your previous benefit estimate will end up being inaccurate. That doesn't mean that your benefit rate is decreasing, though, it simply means that your benefit amount was never actually as high as the previous estimate indicated.
If you can qualify for Social Security disability (SSDI) benefits then you'd almost certainly want to claim those benefits as opposed to filing for reduced retirement benefits. SSDI benefits are calculated at 100% of a person's primary insurance amount (PIA), which is what you'd get if you start drawing your Social Security retirement benefits at full retirement age (FRA). In other words, drawing SSDI benefits is like collecting your unreduced full retirement age Social Security benefit amount early.
However, if you file for SSDI benefits and if you're still working and earning more than the amount that Social Security considers to be substantial gainful activity (SGA), then your SSDI claim will likely be disallowed regardless of your medical condition. The 2021 SGA guideline for non-blind people is $1310 per month, and for blind individuals it is $2190 per month.
You may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to get an accurate benefit estimate and to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits.
Best, Jerry
