Becoming disabled before retirement could be a tremendous financial setback. In addition to being forced to cope with lost income and medical bills, Northwestern Mutual states that two-year impairment at age 50 can reduce overall investment accumulation by 30% in the period of retirement. The Social Security Administration (SSA) says that three out of every ten workers will end up too disabled to work before they reach retirement age. Additionally, 7.8 million people received Social Security disability benefits in recent years according to SSA in its publication “Workers Covered for Social Security Benefits, 2010.” For most of US, understanding that disability benefits are provided by SSA is an ease. Few of us, nevertheless, understand if we are in need of help, who’s insured, how this safety net is financed, or how to apply for benefits.
Where do disability benefits come from? SSA pays disability benefits from SSI, SSDI – two similar sources. Generally speaking, for those who therefore are dealing with a serious impairment that keeps you from working and have worked and paid to the Social Security system for the necessary amount of quarters, it is possible to apply for SSDI benefits. You pay “premiums” for disability coverage with each paycheck earned over your working life. But for those who haven’t worked for quite a while, your “coverage” can lapse. Should it, you must submit an application for SSI as you may no more qualify for SSDI.
SSI recipients will not be covered by SSDI. For example, like gravely disabled individuals who just cannot work, young folks who failed to work long enough ahead of the start of their disability to qualify for SSDI, and individuals who quit working for any reason and permitted their coverage to lapse prior to applying for disability benefits. After retirement, payments are continued under Old Age, Survivors, and Disability Insurance (OASDI).