Deciding Between Early Retirement or Disability Benefits

Deciding Between Early Retirement or Disability Benefits

It typically gets easier for individuals to prevail on disability benefits claims as they get older, especially when they are over the age of sixty. This is based in part on the general premise that the Social Security Administration (SSA) will consider that it may be more difficult for older workers to enter new workplaces. Even so, some elderly individuals opt to pull their retirement benefits early rather than try to apply for disability benefits for several reasons. The process to apply for disability benefits may scare some people, while others may be concerned that receiving disability benefits would reduce the amount of benefits they are entitled to receive. An experienced disability attorney can help you understand the advantages and disadvantages to applying for disability benefits.

Impact of Taking Early Retirement Benefits

Despite the concerns that individuals may have about applying for disability benefits, there are downsides to consider about taking retirement benefits early. First, if you take your retirement benefits before you reach the “full retirement age” (66 and 2 months for people born between 1/2/1955 and 1/1/1956), the amount of your future retirement benefits will be permanently reduced. The amount that your benefits will be reduced depends on how many months before the full retirement age you decide to start pulling your retirement benefits. This is known as a “reduction factor.”

Compare the above scenario to applying and receiving Social Security Disability Benefits (SSDI). If you get SSDI, you would receive a benefit equal to what you would otherwise receive at your full retirement age. In awarding you a benefit, the SSA looks at how much money you have paid to them during your lifetime to determine your SSDI. This means that if you receive SSDI before your full retirement age, your SSDI will simply convert to retirement benefits once you hit full retirement age. Unlike the former scenario, taking SSDI before the full retirement age will not reduce your future retirement benefits.

Applying for SSDI Instead of Taking Early Retirement Benefits

Elderly individuals who choose to take early retirement benefits may want to consider the potential for a “disability freeze” if they are awarded SSDI. If you receive SSDI, you will get the benefit of a “disability freeze.” This means that in order to calculate your monthly disability benefit, the SSA will not take into account any low earning or zero earning years during the time period when your disability impaired your ability to work at full capacity.

Contact Our Experienced Disability Attorneys Today

It is difficult to understand the pros and cons of taking early retirement benefits versus applying for disability benefits. The experienced Mount Pleasant attorneys at Klok Law Firm LLC can help walk you through both options and help you complete your disability benefits application.

Contact us today for a free consultation.