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- Disability insurance payments (your LTD) are only subject to FICA(OASDI) taxes for the first 6 months. Starting in the 7th month there will not be any withholding. If you return to work for any period of time, the 6 month clock starts again if you go back on disability. So assuming you stay on LTD long term like you expect, you will no longer have FICA withholdings. (Reference this IRS ruling letter)
- Assuming your LTD plan is sponsored by your employer, then your LTD benefit payments will be at least partially taxable. The only situation when LTD benefits would not incur income tax, is if you paid the entire cost of the plan premiums yourself, and no portion was paid by your employer. You can find more information here.
- SSDI payments may or may not be taxable, depending upon the amount of your other income. As I don't know any other specifics about your tax/family situation, I will refer you to this excellent TurboTax article on the subject.
- If you do remain on SSDI payments through your full retirement age, then your SSDI benefits should automatically convert to retirement benefits at the same amount. Please reference this resource from the SSA.
I hope that answers all your questions. Do feel free to post again if you have any further concerns.
