You cannot generally collect Social Security benefits for both disability and retirement at the same time.
Most cases of disability benefits are available to pre-retirement beneficiaries. Retirement benefits are available for workers over the age of 62. You can’t file for Social Security disability benefits once you reach full retirement age.
There are exceptions. Early retirees can receive disability benefits to supplement their early retirement Social Security benefit if their application has been approved. Beneficiaries receive both their early retirement benefits and disability benefits in this case to increase their income. The total benefits you receive cannot exceed the amount you are entitled to at full retirement age (67 for those born after 1960).
Imagine that you apply for early retirement at 62, and your monthly early retirement benefits are $1200 per month, instead of the full retirement benefit which is $1,600. You are disabled and apply for Social Security Disability benefits. To reach the maximum benefit, disability benefits could supplement your monthly income up to $400.
What you need to know about Social Security Retirement Benefits
U.S. Every paycheck is paid into the Social Security retirement program by workers and their employers. For those born after 1960, workers can start to receive early retirement benefits when they turn 62. Full retirement benefits are available at 67 for people born between 1960 and today. The monthly benefits are lower if you file earlier, and they increase if you wait until you reach 70.
Your full income will not be replaced by Social Security retirement benefits. Retirees supplement their Social Security retirement income by taking distributions from retirement plans, such as 401(k), deferred compensation plans, workplace pensions, investment properties, or other savings. Others continue to work to supplement their income.
What do you need to know about Social Security Disability Benefits
Social Security Administration established disability benefits to help workers who are disabled and have to quit their job before reaching full retirement age. Workers who have worked for enough time to reach certain earnings thresholds and pay Social Security taxes are eligible for disability benefits.
Eligible relatives may also be eligible for disability benefits based upon your work history. This includes spouses or ex-spouses who file for spousal benefits or spouses or children who are eligible for survivors benefits. Your disability benefit amount can be shared up to 50% with family members. The total amount your family can receive if there are multiple beneficiaries is approximately 150% to 180%. The amount that an ex-spouse gets is not included in this limit, and it doesn’t impact what other family members get. )
Can a retiree file for disability benefits?
You can no longer file for disability benefits once you have reached full retirement age.
If you are over 65, you may be eligible for both disability and early retirement benefits. It can take time for disability claims to be approved. Early retirement benefits provide income while you wait. Retroactive payments will be made to you for the difference between your monthly disability income or early retirement benefits once your disability claim has been approved.
What happens to your disability benefits if you retire?
Your benefits will automatically be converted to retirement benefits if you are receiving Social Security Disability benefits and reach full retirement age. The current laws do not allow for a person to simultaneously receive both full retirement benefits and disability benefits.
You can file for retirement benefits at any age, but you cannot do so if your disability benefits are being collected. Social security disability benefits pay the same monthly amount as full retirement benefits. Your monthly payments will be permanently reduced if you file early for retirement benefits, instead of continuing disability benefits up to full retirement age.
How can collecting disability benefits impact your retirement benefits?
Your retirement benefits will be reduced if you have been receiving disability benefits for a prolonged period. You might still be eligible for other types or assistance.
Monthly Social Security benefits depend on how much you earn, your age and when you retire. When calculating benefits, Social Security takes into account the highest 35 years in income. The missing years are counted as zero if you don’t have the required 35 years of income.
Social security disability benefits don’t count towards your total Social Security-eligible income. Your total income eligible for Social Security calculation is zero if you haven’t earned income in the past year.
Check if your earned income is low to see if you are eligible for Supplemental Security income. This social security program provides additional monthly payments to people with incomes below certain levels.