The amount of Social Security Disability Insurance (SSDI) benefits you are entitled to if you are found to be completely disabled by the Social Security Administration (SSA) is based on the full amount of retirement benefits you are eligible for. You can not receive both disability benefits and retirement benefits at the same time. If you qualify for disability benefits, your benefits will automatically be changed to retirement benefits when you are old enough for full retirement.
In some cases, however, you can apply for Social Security Disability benefits and simultaneously take an early retirement, if you’re old enough. While this works out well for those who are eventually approved for Social Security disability benefits, it can have long term negative effects on your income if you are not ultimately approved for disability benefits.
Here’s how it works: You need to apply for Social Security disability benefits first. This establishes your protected filing date and an alleged date of onset for your disabling condition. As with anyone else who applies for Social Security disability benefits, you must have a disabling condition which has lasted or is expected to last a year or longer (or to result in your death).
After you have applied for Social Security disability benefits, you apply for early retirement. The SSA will accept your application for early retirement as long as you have sufficient credits to retire. When your application is processed, you will begin receiving Social Security retirement benefits at a reduced rate. Opting for early retirement costs you 25% of your full retirement benefit amount. For instance, if your full retirement amount would be $1,000, your reduced retirement benefit is $750.
If your disability claim is eventually approved, you will be entitled to start receiving your full retirement amount immediately (albeit in the form of Social Security disability benefits). You will also be entitled to back pay for the entire time you were eligible for Social Security disability benefits. This means you would be paid your full retirement/disability amount for any months during which you didn’t receive retirement payments and the other 25% of your retirement amount for the months in which you received a reduced payment. Additionally, your retirement benefits would be adjusted so that you would receive full retirement benefits when you reach full retirement age.
Before making the decision to apply simultaneously for early retirement and Social Security disability benefits, however, you should consider the effects it could have on your retirement benefits. If, for example, you are ultimately denied Social Security Disability benefits, your retirement benefits would be kept at the reduced rate permanently. Before making any decisions, consider consulting an experienced Social Security disability lawyer to make sure that you have a solid case for Social Security disability benefits.
Consulting a Social Security disability lawyer won’t cost you anything unless he or she takes your case and your disability claim is approved. Even then, he will only charge you a percentage of the back pay to which you are entitled. Your ongoing benefits will be unaffected. Since the decision to apply for both disability and retirement benefits could have permanent effects on your retirement, you don’t want to make the decision without the advice of a qualified Social Security Disability attorney.