With one rare exception, you cannot collect retirement and disability benefits from Social Security at the same time. Social Security retirement benefits are for people who have worked all their lives and reached full retirement age, which is 66 1/2 years as of 2019. Social Security disability is for people who become disabled and are forced to stop working before reaching full retirement age. It is effectively a benefit program for those forced into early retirement because of injury or illness.
The single exception applies to cases in which a person becomes disabled, applies for Social Security benefits, and in the meantime takes early retirement from Social Security, which you can do starting at age 62. Early retirement pays less than full retirement or full disability. If the person is approved for disability after having drawn early retirement for some time, Social Security will pay them the difference between early retirement and full disability for that period.
How the Early Retirement Exception Works
The Social Security Administration (SSA) sets the age at which a person may collect a full retirement benefit. Historically, this age was 65 years old. But as longer lifespans and lower birth rates have created a situation where we have fewer working-age people funding a growing number of older adults in retirement, the SSA has nudged the retirement age upward in recent years. As of 2019, it stands at 66 1/2 years.
But if you do not want to wait until age 66 1/2 to draw Social Security, you can declare for early retirement as young as 62. The catch is that you get a lower benefit when you declare early — the reduction in your monthly retirement pay when you declare at 62 versus 66 1/2 is approximately 25%. And you receive that lower amount for the rest of your life.
Disability Plus Early Retirement
So, how might early retirement create a situation in which a person collects both disability and retirement benefits from Social Security? If a worker gets injured or becomes ill between the ages of 62 and 66 1/2, they can file for disability and then take early retirement. Since early retirement is a guaranteed benefit at that age, they will start receiving checks right away, but a Social Security disability decision usually takes months.
If the person ultimately gets approved for disability, they will begin collecting the full benefit instead of the reduced benefit they were receiving in exchange for taking early retirement. But what about all those months they were disabled but collecting a lower benefit while waiting for a decision? The answer is that as long as the SSA determines their disability began before they took early retirement, it will compensate them for the difference covering those months.
Example of Concurrent Benefits
To illustrate the situation described above, suppose you suffer a back injury on your 62nd birthday and immediately file for disability. Unable to return to work, you also declare for early retirement to have some income coming in. Based on your work history, your full benefit would be $3,000, but since you declared at 62, you receive 25% less, or $2,250. You receive this amount for six months and then get approved for disability.
Once approved for disability, you start collecting the full $3,000 per month rather than the lower amount. But for six months, you were officially disabled but receiving $750 less than your full benefit. Therefore, the SSA would make up the difference by paying you $750 times six months, or $4,500, to cover that period.
Becoming Disabled After Declaring for Early Retirement
Now consider a similar situation but one in which you suffer an injury shortly after declaring for early retirement. That is, you submit all your paperwork for early retirement and then get hurt soon after that.
In this scenario, you would not be eligible to recover the difference between your early retirement and full benefit amount. Since you took early retirement before becoming disabled, you would receive the reduced benefit for the rest of your life, though if a private disability plan still covered you at the time of your injury, you could file a claim with your insurer and potentially receive a benefit.
A Social Security disability lawyer from Disability Advantage Group can review your situation and help you maximize the benefits for which you are eligible.
For a Free, No-Risk Case Evaluation, Call the Social Security Team at Disability Advantage Group Today — 866-628-8179
The Social Security disability lawyers at Disability Advantage Group can help you make the most of your benefits. We connect deserving Americans with the disability benefits they deserve, and we want to put our resources to work for you. To receive a free consultation with a member of our team, call us today at 866-628-8179.