Despite the fact that Social Security disability and Social Security retirement are two different programs, those who seek benefits from these two programs may not be aware that you cannot collect both Social Security disability and Social Security retirement at the same time.
This is better understood when you realize that Social Security Disability Insurance (SSDI) is for disabled workers who can no longer continue to work at a Substantial Gainful Activity (SGA) level prior to their full retirement age. Social Security defines SGA as earning $1,040 of gross income (before taxes) or more, from work-related activities, per month.
Those who are at full retirement age (full retirement age is dependent on the year you were born) are not expected to be in the workforce any longer and thus not entitled to Social Security disability benefits.
Now that it is understood that people at full retirement age are not entitled to Social Security disability benefits, what about people who collect early Social Security retirement benefits?
At age 62 residents who have paid into Social Security are eligible to receive early Social Security retirement benefits. When someone decides they want to collect Social Security retirement benefits early they pay a penalty for doing so. Those who collect early retirement benefits beginning at age 62 will only receive about 80 percent of what their full monthly retirement amount would be if they retired at full retirement age. Even when early retirement recipients reach full retirement age they will only continue to receive their reduced monthly benefit amount for the duration of their life, with one exception.
If a person decides to collect early retirement benefits and files a disability claim, the reduced the amount of the retirement benefit they receive will be increased to the full retirement amount if the person is found disabled during the time they were collecting early retirement benefits. No doubt this can be a confusing concept so the following example is presented:
If Judy is entitled to a $1,000 monthly benefit amount upon early retirement and opts to collect early retirement at age 62, her monthly retirement benefit would be reduced to $800 per month. If Judy files a disability claim and is found disabled, she would be entitled to her full retirement amount dependent upon the date in which she was found disabled. Anyone who is currently age 62 would have a full retirement age of 66. That means that Judy would potentially be eligible for an extra $200 per month for a total of four years if she meets Social Security disability eligibility. Over four years that equates to an extra $9,600 for Judy.
If you have begun collecting Social Security early retirement benefits, or you have considered collecting early Social Security retirement benefits and believe you had to stop working because of a disability you should explore the option of Social Security disability benefits.
