Can I Receive Both SSDI and Early Retirement Benefits?
Many people facing health issues as they approach retirement age wonder if it’s possible to receive both Social Security Disability Insurance (SSDI) and early retirement benefits. Understanding how these benefits interact is important for making informed decisions about your financial future. Here, we’ll explore some common questions about receiving disability benefits alongside early retirement.
Can I apply for SSDI if I’m already receiving early retirement benefits?
Yes, you can apply for SSDI after you have started receiving early retirement benefits. If you qualify for SSDI and are approved, your benefit amount could be adjusted to the higher SSDI rate rather than the reduced early retirement rate.
How do SSDI and early retirement benefits interact?
Early Retirement: If you choose to take early retirement, which you can start as early as age 62, your retirement benefits are permanently reduced based on the number of months you receive benefits before you reach full retirement age.
SSDI: SSDI benefits are calculated based on what your full retirement benefit would be at your full retirement age, without any reduction for early retirement. This means if you are approved for SSDI after starting early retirement, your SSDI benefits will typically be higher than your early retirement benefits.
What happens to my benefits if I am approved for SSDI after taking early retirement?
If you are approved for SSDI after starting early retirement benefits, your benefits will generally be increased to the full disability rate retroactively from the start of your disability or from the date you began receiving early retirement benefits. This adjustment can provide significant financial relief.
Will my SSDI benefits convert to retirement benefits later?
Yes, when you reach full retirement age, your SSDI benefits will automatically convert to retirement benefits. However, the amount will generally remain the same as your SSDI benefit. Typically, this transition is seamless and does not require any action on your part.
Is it better to wait for SSDI or start early retirement if I’m disabled?
This decision depends on several factors:
- Financial Need: If you need immediate income, starting early retirement benefits might be necessary, but be aware your benefit amount could be reduced for life.
- Strength of Disability Claim: If you have a strong disability claim with substantial medical evidence, it might be worth it to apply for SSDI first.
- Preferred Method of Filing: If you’re already collecting early retirement, you typically must file your disability application through the Social Security Administration; therefore, if you desire representation it’s best to apply for disability benefits first.
What should I consider before applying for early retirement or SSDI?
Before making a decision, consider:
- Financial Impact: Understand the permanent reduction in benefits associated with early retirement compared to the potential higher benefit of SSDI.
- Health Status: Evaluate how likely it is that your SSDI application will be successful based on your medical condition.
- Consultation: It may be beneficial to consult with a disability attorney to help navigate these decisions based on your specific circumstances.