Can You Get Retirement and Disability at the Same Time?

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If you’re approaching 62, the age when you can begin claiming Social Security Income benefits for retirees, you might wonder if you can claim Social Security Disability Income at the same time as collecting Social Security retirement benefits.

In most cases, you can’t claim Social Security Disability benefits while you’re collecting retirement benefits, since SSDI would essentially become retirement benefits when you do retire. You should be aware, however, of any exceptions.

Understanding how and when you can collect retirement and disability benefits together could substantially increase your income and your financial security in your later years.

Here are three real-life circumstances where you can claim retirement and disability benefits concurrently.

You Haven’t Reached Full Retirement Age

If you haven’t yet reached full retirement age but are at least 62 years old, you can receive SSDI and retirement benefits concurrently.

Full retirement age begins at 66 for those born between 1943 and 1954. For those born between 1955 and 1960, it increases incrementally. Anyone born in 1960 or later reaches full retirement age at age 67. FRA represents the age you can collect the full amount of Social Security benefits you have earned during your working years.

If you claim your Social Security benefits any time between the age of 62 and your FRA, and also claim SSDI, your total monthly benefit cannot exceed the amount you’ll receive when you reach full retirement age.

If you’re already receiving disability benefits when you reach retirement, those disability benefits will convert to retirement benefits, usually without reducing the amount you are provided.

By delaying Social Security, you can maximize your monthly payments when you reach FRA. That’s the same reason financial experts recommend waiting as long as you can, up to FRA, to claim Social Security retirement benefits.

For instance, if you retired this year at age 62, you’d receive a maximum of $2,710 per month. Wait until age 70, and your maximum could be as high as $4,873 if the current system remains in place.

You Became Disabled at the Same Time You Reached Age 62

If you aren’t able to work and are in dire need of money, filing for retirement at 62 can provide you with cash while you wait for your disability claim’s approval. Filing for early retirement may reduce your total income in the long run, but it could be a short-term solution to cash flow issues if you become disabled with little to no savings or other investments.

When your disability pay kicks in, you’ll receive benefits retroactive from the date you filed. Combined with your SSI benefits, you’ll receive the same amount of money you would receive when you reach FRA.

You Are Receiving Long-Term Disability

If you’re receiving long-term disability insurance, sometimes called Disability Income, you can also collect SSDI benefits. LTD may be written as a group benefit, with premiums partially funded by your employer. If your employer doesn’t offer LTD as a group employee benefit, you can also write an independent policy.

In some cases, your LTD carrier will require that you also apply for SSDI benefits. You can receive these benefits concurrently. With SSDI, you must show that you’re unable to work at any job.

On the other hand, you may be able to choose an LTD policy that covers your “own occupation” rather than “any occupation.” That means if you work in a specialized field and can no longer work in that occupation because of your disability, you may still be able to collect LTD but not SSDI benefits.

You Are Receiving Retirement Income from Other Sources

Retirement income from other sources besides Social Security won’t affect your capability to collect SSDI, in most cases. For instance, if you have stock investments that pay dividends, mutual funds, annuities, a 401(k), pension or other retirement plan, you can still collect SSDI benefits.

Passive or unearned income does not apply to maximum earnings when you apply for Social Security Disability. However, if you earn money from rental properties, this may count as earned income if you actively work at repairing or maintaining the property. Similarly, if you used to work as a real estate agent and earn money from rental properties, it could affect your SSDI eligibility.

FAQ

Find out what people are asking about disability and retirement benefits.

• What happens to my retirement if I go on disability?
  • If you file a claim for social security disability, and you're already receiving Social Security benefits but have not reached full retirement age, it may reduce your Social Security payments. Your SSI benefits will be reduced by the amount of SSDI, which is equal to what you'll receive at full retirement age.
• Is it better to retire or go on disability?
  • If you have not yet reached FRA according to the Social Security Administration's definition, you can collect more money on disability than filing for early retirement. Also, filing for early retirement will reduce your lifelong SSI benefits.
  • The decision to retire early or go on disability is a personal choice that depends on your overall financial situation, your age and even the extent of your disability.
• Can a person receive both retirement and disability benefits?
  • In certain circumstances, you can receive both retirement and disability benefits. You can claim both SSDI and SSI if you haven't yet reached Full Retirement Age. Your total benefit amount cannot exceed the amount you'll receive at FRA.
• Can you collect long-term disability and Social Security at the same time?
  • You can collect SSDI and LTD or Disability Income benefits at the same time. Having an LTD policy through your employer or a private policy can help you maintain an income level similar to what you received before you became unable to work. This may help you maintain a better quality of life in your later years, even as you grapple with disability or illness.

This article originally appeared on GOBankingRates.com: Can You Get Retirement and Disability at the Same Time?