In 1983, Congress justified raising the retirement age from 65 up to 67 years on improvements in healthcare and increases in longevity. At that time, the average life expectancy in the United States was 74.5 years. A quarter of a century later, in 2009, the average life expectancy here increased by four years to 78.7. Last Friday, we learned that the funds for Social Security and Medicare will run out sooner than expected. The combination of continued increases in longevity and decreases in trust funds will likely result in Congress raising the retirement age again, just as it did in 1983.
How would an increase in the retirement age affect Social Security Disability (“SSD”) benefits? For those over 50, it is frequently easier to secure SSD benefits for those who do not have sedentary jobs. Essentially, those with desk jobs will subsidize to some extent those people who have more physically intensive occupations.
Regardless of the nature of one’s occupation, there is increasing uncertainty about the availability of funds to pay SSD benefits, and amount of SSD benefits to which a person may be entitled. There may even be needs testing to receive SSD benefits in the future just as there currently is needs testing to receive Supplemental Security Income benefits.
One way to mitigate the effects from the potential unavailability of SSD benefits is to purchase an insurance policy. Just as you can purchase life, health, or car insurance, you can also purchase disability insurance. Even if you are covered by a group disability policy or pension fund through work it is a good idea to purchase an individual disability insurance policy. If you are considering buying disability insurance, then make sure that you have the policy reviewed by an attorney who has experience litigating them before you make the purchase.