Does Social Security Disability Affect Retirement Benefits?


Does Social Security Disability Affect Retirement Benefits?

If you have become disabled, you might be concerned about how receiving Social Security Disability benefits might affect you in the future. Will it affect my right to apply for Social Security retirement benefits? Will taking SSD benefits now impact the amount of money I will receive in retirement benefits?

If you are considering applying for Social Security Disability, here is what you need to know about how these benefits might affect your retirement benefits.

What Is the Difference Between Disability and Retirement Benefits?

Although Social Security Disability Insurance (SSDI) and retirement benefits are both paid from the Social Security Fund, the two benefits are provided to individuals for different circumstances.

SSDI benefits are paid to an individual who has acquired sufficient work credits who becomes disabled to the point that they can no longer work, and the disability has lasted or is expected to last at least one year or result in death. So long as individuals have enough work credits, they may apply for SSDI at any age when they become disabled.

Retirement benefits are paid once a worker reaches the retirement age of 62. However, workers can increase their benefit to a 100 percent benefit by waiting until full retirement age to begin collecting retirement benefits, or they can maximize their payments by deferring retirement benefits to age 70. All eligible Social Security recipients must start collecting retirement benefits at age 70.

Can I Receive Social Security Disability and Retirement Benefits?

SSDI and retirement benefits are not paid at the same time. Instead, most applicants approved for SSDI benefits will receive benefits equal to the benefit they would receive at full retirement age. This benefit is calculated according to your lifetime earnings.

If you have already accepted retirement benefits, you usually cannot obtain disability benefits since you retired from employment. However, if you took early retirement and can show that you retired early due to a qualifying disability, you may be entitled to receive the difference between your full retirement benefit and the early retirement received as a disability benefit.

Is It Better to Retire Early or Go on Disability?

Deciding between early retirement and applying for disability benefits depends on your specific circumstances. If you have reached an eligible age for retirement benefits, you may decide to take the easier route of accepting early retirement benefits rather than going through the much more difficult process of applying for Social Security disability benefits.

That may be a more attractive option if you will not need a full or maximized retirement benefit because you will have other sources of income in retirements, such as pension benefits, annuities, or retirement investment accounts.

However, based on your financial situation, it may make more sense to pursue disability benefits rather than giving up full retirement benefits by waiting until retirement age or maximum benefits by waiting until age 70 to apply for retirement.

What Happens to My Disability Benefits When I Reach Retirement Age?

If you have been awarded SSDI benefits, your disability benefits will automatically convert into a retirement benefit when you reach full retirement age. Your full retirement age is based on when you were born. Later-born people have higher full retirement ages.

Contact Our Experienced Dade City Social Security Disability Lawyers Today

If you have more questions about the impact your Social Security Disability benefits could have on your Social Security retirement, contact us online or call The Disability Law Firm today for a free, no-obligation consultation. Our Dade City Social Security Disability attorney is ready to answer your questions and help you through the process.

Editor's Choice

Avvo Rating