Should I Choose Early Retirement or Apply for Disability Benefits?

The age at retirement can be greatly influenced by a disability.  If you have a disability, you may be considering early retirement or applying for disability benefits from the social security administration. First of all, you need to ensure that you are eligible for Social Security Disability Insurance (SSDI). The Social Security Administration (SSA) has strict eligibility requirements as they want to make sure that you are truly disabled and cannot work in your previous employment or find other work in order to prevent fraud. 

There are disadvantages for early retirement benefits social security as you will receive only 75% of the amount on your social security check that you would get if you waited to retire at the full retirement age.

Early Retirement and Disability Benefits 

Before you even consider the choice between early retirement and disability benefits you need to ensure that you are at retirement age for social security and meet the eligibility requirements for disability benefits. Typically, the retirement age for early retirement is 62 years old if you meet all of the work credit requirements. The application for early retirement can be done online and is relatively straightforward.

To be eligible for disability benefits, you must have a condition that has lasted, or is expected to last, over a year or result in death that prevents you from continuing your employment or finding other work that you can do. The application requires you to supply substantial medical evidence to prove your disability. If you are considering filing for disability benefits and are unsure if you meet the eligibility requirements, disability lawyers in Houston are there to assist you in determining your eligibility and can help you apply, ensuring the best chance of receiving your disability benefits.

In general, a person cannot collect both SSDI and retirement benefits at the same time. Once you reach full retirement age, normal social security benefits take over for SSDI. However, there is one exception, if you took became disabled after you were eligible for early retirement, you may be eligible for both SSDI and normal retirement benefits. 

What is the Retirement Age for Social Security?

The Social Security Administration has what is basically a tiered system for retirement ages. As of 2023, the retirement age for full social security benefits is 67 years old for people born after 1960. However, social security benefits will go up if you wait until 70 to retire. 

Nevertheless, the social security retirement age can be younger if you choose to retire early. You can choose to retire as early as 62 years old. When you retire at 62 years old, the amount of your social security check will be around 75% of what it would be if you waited until 67 to retire. The amount of your social security will go up with each year you wait to receive your retirement money early. So, for example, if you wait until 64 to retire, your check will be higher than it would be if you took early retirement at 62. The decision to retire will really be based on your financial situation.

Scenario of Early Retirement and SSDI

The only scenario for taking early retirement and SSDI is if you became disabled after you were eligible for early retirement.  As early retirement at the age of 62 only provides 75% of the amount of money as waiting until full retirement age, there may be some advantages of applying for SSDI after taking early retirement. 

Let’s look at a hypothetical situation where applying for disability benefits would be beneficial if taking early retirement. If you took early retirement at 62, you are receiving less on your social security check than you would have been if you waited until full retirement age. Some unforeseen illness or injury makes it where you meet the eligibility requirements for disability benefits. 

If you apply and are approved for disability benefits, you will start receiving the difference between your early retirement check and the full benefit amount thus receiving what amounts to full retirement benefits. Additionally, you will receive back pay from the time you became disabled and continue to receive the full amount for the rest of your life. As you can see, applying for SSDI if you become disabled after taking early retirement can be extremely beneficial and result in you getting more money. 

Can I Apply for Disability and Early Retirement at the Same Time?

Remember that to be eligible for both SSDI and early retirement benefits, your disability must have occurred and prevented you from working after you became eligible for early retirement. So, while you can apply for both early retirement and disability benefits at the same time, the best practice is to apply for disability benefits first to establish your disability date.

You can then apply for early retirement, and as long as you meet the work credits requirements and the early retirement age, you will start receiving your early retirement benefits while your disability claim is processed. If you are approved for disability, you will start receiving full retirement benefits, plus back pay to when your disability occurred, and will have full benefits for the rest of your life. 

However, there is always a risk that your disability benefits could be denied. If this happens and you took early retirement, you will be stuck with receiving the early retirement check amount for the rest of your life. 

Plan for Your Retirement Income Needs

As you can see, applying for both early retirement benefits and disability benefits can become very complicated. You will need a plan for your retirement income needs. This will require you to look at your financials and see how much money you need each month to pay for the necessities and enjoy your retirement. This might require you to enlist some help. A qualified disability attorney can help you understand what benefits you are eligible for from the Social Security Administration and any other form of benefits that are available.

On top of that, a disability attorney can help you determine if you should take early retirement and disability benefits. Once that is determined, they can help you apply for both and guide you through the process making it much easier and a less stressful experience for you. And if for some reason your disability claim was denied, a qualified disability attorney can help you appeal that decision. The appeals process for disability claims can be complex but your attorney knows how this process operates and can guide you through it. 

With the help of a skilled disability attorney, you will know what to expect from the Social Security Administration and be on your way to getting your benefits and enjoying your retirement as much as possible.