Association for Public Policy Analysis & Management

Social Security Disability Insurance (SSDI) beneficiaries have greater Social Security replacement rates than Old Age and Survivors Insurance (OASI) beneficiaries.  This finding reflects two factors: 1) differences in career average earnings and 2) actuarial adjustments for early claimers.  This project uses the 1992-2010 waves of the Health and Retirement Study (HRS) linked to Social Security Administration earnings records to decompose the differences between the replacement rates for OASI and SSDI beneficiaries into these two factors, and documents how each component of the replacement rate has changed over time.  The project also examines how the total replacement rate – which accounts for other sources of income – differs between OASI and SSDI beneficiaries to capture the difference in overall retirement security between the two groups.  Although Social Security replacement rates for SSDI recipients are unambiguously higher than for OASI recipients with the same earnings history, the same may not be true of total replacement rates, especially if SSDI recipients lean on savings as they transition from work to the disability program.