Social Security Disability and Retirement are paid from the same funds and you cannot receive both payments at the same time
If you are 65 years old or younger, you may be eligible to receive Social Security Disability Insurance (SSDI). If you are approved, you will receive monthly payments dependent upon your Primary Insurance Amount (PIA). Once you reach your full retirement age, your benefits are automatically converted to Social Security Retirement (SSR) benefits. Since SSDI and SSR are both funded through FICA taxes, you will not receive both payments. SSDI is merely an option for those who become disabled before they are eligible to retire.
Social Security Early Retirement
Early retirement is available to all workers who have paid FICA taxes and have earned enough work credits over their work history (generally 40 credits, or 10 years of work). You become eligible to receive these benefits as early as age 62. However, drawing your benefits early will reduce the monthly benefit amount you receive by about 25%.
If you have applied for, or are receiving, Social Security Early Retirement (SSER) benefits, and are also eligible to receive Social Security Disability Insurance, your benefit amount will be supplemented so you can receive your full retirement amount. In order to be eligible to increase your SSER amount with the addition of SSDI benefits, you must be able to prove you became disabled before you filed for SSER.
If you were found to be disabled prior to receiving your SSER benefits, Social Security will make up the difference between your early retirement and full retirement benefits.
This means that for the months you were receiving SSER, you will receive retroactive payments to make up for the difference in the two amounts (generally a 25% increase). Once you have been approved for SSDI, your benefit amount will equal your full retirement amount without being penalized for filing for retirement early.
This can also be helpful for those who understand the often lengthy wait period associated with getting approved for disability benefits. However, there is no guarantee you will be approved. Be sure to understand Social Secuity’s definition of being disabled and whether or not you qualify under their rules.
For more information about your disability and retirement benefits, contact us now. We are standing by to help!