1. Transition to Retirement Age

2. Learning Objectives
After this training, participants should be able to:
Describe the CWIC’s role in counseling beneficiaries about transition to retirement benefits.
Describe what happens to Title II disability benefits at full retirement age.
Describe the difference between early retirement benefits and SSDI.
Describe what happens to Medicare at age 65.
Describe what happens to SSI at age 65. 2

3. CWIC’s Role in Advising Beneficiaries on the Transition to Retirement
CWIC’s primary focus is promoting employment, not retirement planning. Refer to Social Security if beneficiary has no interest in work.
If beneficiary is interested in work, CWICs should be able to explain:
Automatic changes that occur when an SSDI beneficiary reaches full retirement age.
Optional benefit changes and know when to refer beneficiaries to Social Security.
The effect of work on retirement benefits. 3

4. Retirement Terminology
Retirement Insurance Benefits (RIB)
Social Security cash benefit available to insured workers who are at least age 62.
Insured status for retirement purposes:
Full Retirement Age (FRA)
The age at which a RIB applicant may receive unreduced retirement benefits. Also, the age at which earnings no longer affect Social Security retirement benefits.
FRA Chart:
FRA Calculator: 4

5. More Retirement Terminology
Reduced Retirement Insurance Benefits (Reduced RIB)
A retirement benefit drawn before FRA, as early as age 62.
Benefit amount is reduced by the number of months prior to FRA it is started (reduction factor).
Refer beneficiaries to Social Security for questions about reduced RIB. 5

6. Annual Earnings Test (AET)
If a beneficiary works and earns over a specific dollar amount (also known as the Annual Earnings Test or Earnings Test), retirement benefits may be reduced.
The law provides for a two-tier earnings test:
One test for beneficiaries under FRA, and
One test for beneficiaries who attain FRA during the year. 6

7. More About the AET
For beneficiaries who have not reached their year of FRA, Social Security deducts $1 from benefits for each $2 earned over the annual exempt amount ($15,720 in 2016).
In the year a beneficiary attains FRA, Social Security only counts earnings before the month of attainment of FRA and deducts $1 from benefits for each $3 earned over the full annual exempt amount ($41,880 in 2016) in the months prior to FRA.
Effective 1/2000, the ET no longer applies to a beneficiary beginning in the month he or she attains FRA. 7

8. CWICs and the Earnings Test
Benefit reductions based on the earnings tests can get very complicated, depending on the beneficiary’s circumstances.
Only Social Security personnel can perform these calculations. 8

9. More Retirement Terminology
Delayed Retirement Credits (DRCs)
A person can choose to delay receipt of retirement, until as late as age 70. DRCs increase the amount of monthly benefits the person can receive. SSDI beneficiaries change automatically to RIB at FRA. No DRCs in that case.
Refer ALL questions about monthly retirement benefit amounts to the local Social Security office. 9

10. SSDI and Transition to Retirement
SSDI and FRA
Automatic change.
SSDI converts to RIB.
Benefit amount will not decrease.
No earning limit, no medical CDRs, no longer able to participate in Ticket to Work program.
If PASS in place, it can continue after FRA. 10

11. SSDI and Transition to Retirement
SSDI at 62
Optional change (unless entitled to SSI) that creates dual entitlement.
Can’t get both RIB and DIB payments at the same time.
Can change election more than once.
Considerations:
Benefit amount: RIB amount lower than DIB.
Medicare based on DIB can continue if RIB is elected (DIB remains a technical entitlement).
Work rules for RIB and DIB are different.
Worker’s Compensation offset does not apply to RIB 11

12. Application for Early RIB
There are a limited set of circumstances under which an disability beneficiary may want to consider applying for early RIB:
DIB ceased due to medical recovery.
DIB suspended or ceased due to SGA level employment.
DIB payments reduced due to receipt of Public Disability Benefits (PDB). 12

13. DWB and Transition to Retirement
DWB and FRA
Automatic change.
DWB converts to Widow(er)’s benefit (WIB).
Benefit amount will not decrease.
No earnings limit, no medical CDRs, no longer able to participate in Ticket to Work program.
If PASS in place, it can continue after FRA.
FRA for surviving spouse’s differs from the FRA for retirees: 13

14. DWB and Transition to Retirement
DWB at 60 (widow benefits begin as early as 60, not 62)
Optional change (unless entitled to SSI) that creates dual entitlement.
Can’t get both RIB and DIB payments at the same time.
Can change election more than once.
Considerations:
Benefit amount same for DWB and reduced WIB.
Medicare based on DWB can continue if WIB is elected (DWB remains a technical entitlement).
Work rules for DWB and WIB are different. 14

15. CDB and Transition to Retirement
No change to CDB in transition to retirement age. There is no way to qualify for retirement benefits based on a parental earnings record.
Medical CDRs continue.
Title II disability work rules continue to apply.
Medicare continues based on CDB entitlement.
If PASS in place, it can continue after FRA.
Participation in Ticket to Work (if in effect prior to age 65) can continue. 15

16. Medicare and Transition to Retirement
At age 65
Medicare entitlement switches from disability to based on age.
New period of Medicare entitlement.
Any premium penalties for Part B and/or D are eliminated.
New initial enrollment period for Part B, Part C (Medicare Advantage), and Part D.
No need for Medicare work incentives. 16

17. SSI and Transition to Retirement
SSI at 62 or 60
If individual is insured for retirement status on own record, MUST take reduced RIB.
Could also be eligible for and MUST take:
Reduced RIB on spouse’s work record as early as 62;
Widow(er) as early as 60; or
Disabled widower as early as 50.
Social Security will process retirement benefit first and supplement with SSI if eligible. 17

18. SSI and Transition to Retirement Age
SSI at 65
Benefit does NOT convert to RIB.
FBR the same, regardless of eligibility category.
Person may become eligible for Medicare.
SSI can be based on age, disability, or blindness once 65. There are differences in the work incentives for SSI based on age and disability/blindness. Beneficiaries can choose which eligibility category is best. 18

19. SSI and Transition to Retirement Age
SSI based on age
Not subject to medical CDRs.
Only basic SSI deductions used (GIE, EIE, ½ disregard).
IRWE, BWE, 1619(b) NOT an option.
PASS permitted if individual received SSI based on disability/blindness the month before turning 65.
SSI based on disability or blindness
Subject to medical CDRs.
Can use GIE, EIE, ½ disregard, IRWE, BWE, 1619(b) and PASS (if individual received SSI based on disability/blindness the month before turning 65). 19

20. Medicaid and Transition to Retirement
Medicaid eligibility based on receipt of SSI can continue at age 65 (1634 and SSI-criteria states).
1619(b) does NOT apply if SSI is based on age.
State may have other Medicaid eligibility groups for those who are age 65 or older - be sure to explore those options.
Research whether Medicaid Buy-In in your state can be used if age 65 or older. 20

21. Remember Your Role!
As a CWIC you are not trained to be a retirement planner. Be careful how far you go when counseling beneficiaries.
But – beneficiaries who are pursuing work and nearing retirement age will require some basic information. Be sure to hit the most important points and refer to Social Security. 21

22. The Important Points SSDI DWB
At age 62 individuals may apply for reduced RIB – refer to Social Security to explore this option if beneficiary has questions.
At FRA DIB will automatically convert to RIB and there will be no earnings limit.
DWB
At age 60 individuals may opt for reduced WIB – refer to Social Security to explore this optionif beneficiary has questions.
At FRA DWB will automatically convert to WIB and there will be no earning limit. 22

23. More Important Points CDB Medicare
No change during the transition to retirement.
Medicare
At age 65 Medicare automatically is based on age, rather than disability.
New period of Medicare entitlement. 23

24. Important Points Continued
SSI
At age 60 could become eligible for reduced WIB, at age 62 could become eligible for reduced RIB.
At age 65 eligibility category can be based on age.
If based on age – fewer work incentives.
Medicaid
If SSI eligibility continues, Medicaid can continue (SSI criteria and 1634 states).
1619(b) won’t apply if SSI based on age.
Find out if Medicaid Buy-In can continue once 65. 24

25. Final Words
Be prepared to provide basic summary information about the transition to retirement.
Recognize that each Social Security cash benefit has optional and automatic changes.
Be aware of the Medicare and Medicaid transition points.
If beneficiaries want/need help deciding whether to switch benefits during one of the optional change points – refer to Social Security. 25