Our office is sometimes approached by people asking if they are able to apply for Social Security disability benefits after they have begun receiving early retirements from the Social Security Administration. The answer is yes, but there may be a “reduction factor” or a permanent reduction of the disability benefit for the months that you received your early retirement benefit before your disability began.
Early Retirement vs. Disability: The Reduction Factor Explained
Generally a Social Security disability benefit is the same as your full retirement benefit. However, if you started a Social Security retirement benefit at 62, for reasons unrelated to health, taking a reduction in benefits for filing before full retirement age (which is 66 and 4 months for people born in 1956, two months later for those born in 1957, and gradually rising to 67). If a year later, you are diagnosed with cancer and are unable to work, you can file for Social Security disability benefits.
Consequences of Filing for Early Retirement Before Disability
If the claim is approved, you will get a higher benefit, backdated to when you applied for disability. You will still not get your full retirement benefit, but the “reduction factor” for early retirement will shrink from four-plus years to just the period when you were only eligible for retirement benefits or one year. This policy is outlined in the Social Security Operations manuals at POMS RS 0615.410(A).
Understanding the Social Security System: A Quick Guide
We generally advise our clients to apply for disability benefits before taking a retirement benefit because if you opt for a reduced retirement amount while awaiting a disability benefit and the disability benefit is denied, you will be permanently locked into a reduced retirement benefit amount.
Determining Retirement and Disability Benefit Amounts
You can determine your early retirement, full retirement or disability benefit amounts by contacting the Social Security Administration at 1-800-772-1213 or making an account at www.ssa.gov under the MySSA tab.
Generally, retirement benefits are based on your 35 highest-earning years. However, some people on disability may have had much less time in the work force and so a Social Security Disability Insurance benefit is determined by your inflation-adjusted average earnings from age 21 until the year you became disabled.
Expert Advice: Navigating Your Social Security Options
This is a simplified explanation for a complex system with many different situations. We would advise you to contact the Social Security Administration to discuss your options for benefits or to speak with our office to discuss your options.
