Can You Get SSDI After Taking Early Retirement?

Can you apply for SSDI after taking early retirement?

Yes. Receiving early retirement benefits does not prevent SSA from finding that you are disabled, whether your disability began before or after your retirement benefits started, and SSA handles the application as a regular disability claim. The medical rules, the work history questions and the evidence are the same ones every SSDI claim runs through.

The limit is time, not the retirement check. SSDI, or Social Security Disability Insurance, is paid only while you are disabled before full retirement age, and entitlement ends the month before you reach it. At that point SSA changes the disability benefit to a retirement benefit automatically, with no new application.

In most cases SSDI begins only after a five-month waiting period, and the last possible month of SSDI entitlement is the month before you reach full retirement age. SSA treats you as reaching an age on the day before your birthday, so a birthday on the first of a month moves that month one earlier. Your disability generally has to begin at least six full months before the month you reach full retirement age: five for the waiting period and at least one month of entitlement. The waiting period does not apply to qualifying ALS claims or to some people with an earlier disability entitlement or period of disability, which can allow a later onset. Otherwise, a condition that ends your work a few months before that month may leave no month of SSDI entitlement at all.

Back to contents

What SSDI approval does to an early retirement reduction

Approval may remove some or all of the age reduction, depending on how many months of retirement came before your SSDI entitlement. If SSDI ends before full retirement age, for example after medical improvement or a return to work, SSA goes back to paying the original reduced retirement rate, plus any cost-of-living increases, until full retirement age, when the months you were entitled to SSDI are taken out of the retirement reduction. A retirement benefit started before full retirement age is cut 5/9 of 1 percent for each of the first 36 early months and 5/12 of 1 percent for each month beyond that. With a full retirement age of 67, SSA's actuaries put the cut for starting at 62 at 30 percent.

An SSDI benefit is figured another way. It equals your primary insurance amount, the base figure computed from your earnings record and explained in our guide to how SSDI is calculated. For disability, the regulation computes it as if you turned 62 at the start of your waiting period, or when your entitlement begins if no waiting period applies, before any reductions that apply.

The reduction that can survive comes from the months in between. If you were entitled to reduced retirement before your SSDI entitlement began, the disability benefit is reduced by the amount retirement would be reduced for those earlier months, under 20 CFR 404.411(b)(1). SSA's own application guidance describes it as less than 1 percent for each month of retirement received before the first month a disability benefit is due. In a simplified example, five months of early retirement benefits paid before SSDI entitlement leave a cut of about 2.8 percent (five months at 5/9 of 1 percent each); on a primary insurance amount of $2,000, that is roughly $56 a month, assuming no part of those months' benefits was withheld because of work earnings, and before any other adjustment. SSA's calculation on your own earnings record sets the actual figure. SSA says the result is usually higher than the retirement benefit, though lower than it would have been without the early retirement.

When your SSDI entitlement begins in or before the first month of retirement, no early retirement reduction carries into the disability benefit. Other reductions, such as the workers' compensation offset, can still apply.

Back to contents

What happens to your SSDI benefit at full retirement age

At full retirement age the disability benefit becomes a retirement benefit, and SSA makes one more adjustment for anyone who took early retirement. Under 20 CFR 404.412, SSA stops counting any month you were entitled to disability benefits as an early retirement month, and the increase takes effect with the month you reach full retirement age.

That adjustment has a precise reach. What SSA recalculates is not the disability benefit; it is the retirement benefit you started early, with the disability months taken out of its reduction. This disability adjustment does not remove months of retirement paid before your SSDI entitlement began, so those months can leave a reduction after full retirement age, although separate rules can exclude some months for other reasons, such as months when some or all of the benefit was withheld because of work earnings.

The decision date does not change the count. SSA counts from the month SSDI entitlement begins, not the approval date, subject to the waiting period and application rules below, so a slow decision does not by itself add reduction months.

Back to contents

How SSA sets the SSDI entitlement month and back benefits

Your SSDI entitlement month depends on the onset date SSA finds, any required waiting period, and the months your application can cover. When the waiting period applies, it runs five full consecutive months, starting in a month you were both insured and disabled, and entitlement cannot begin before the month after it ends. Expect SSA to set the onset from your medical and work evidence, which is why records showing when your condition ended your work carry so much weight here.

Two filing rules pull in opposite directions. An SSDI application can pay benefits for up to 12 months before the month you file. Your own reduced retirement benefit cannot be paid for any month before you file for it. Putting off an early retirement claim does not earn back pay for the months before you file, while putting off an SSDI claim can cost months that fall outside the 12-month window. The waiting period itself can begin no earlier than the 17th month before the month you apply, which is how the SSDI waiting period and the 12-month window fit together.

If you are 62 or older and have enough work credits for retirement benefits, you can apply for reduced retirement and receive it while SSA decides your disability claim. Retirement months paid before your SSDI entitlement begins count toward the reduction described above, unless some or all of a month's benefit was withheld because of work earnings. Retirement months from the month your SSDI entitlement begins onward do not count, so the entitlement month SSA sets, which depends on the onset date, the waiting period and the months your application can cover, decides whether taking retirement while you wait adds any reduction.

Back to contents

Medicare on SSDI compared with retirement benefits at 62

Medicare is health insurance for people 65 and older, with earlier eligibility for people who have a disability, permanent kidney failure or ALS. Retirement benefits at 62 do not, by themselves, bring Medicare any sooner than 65.

SSDI can. If you are under 65 and getting Social Security disability benefits, Medicare starts automatically after 24 months of disability benefits or at 65, whichever comes first. SSA counts every month of disability entitlement toward the 24, including months with no cash payment, and people whose disability is based on ALS generally get Medicare in their first month of disability entitlement. For someone several years from 65, the difference in when coverage starts can matter as much as the monthly amount.

Back to contents

Are you still insured for SSDI if you stopped working years ago?

You may be, if your disability began before your coverage ran out. Under the ordinary rule, you are insured for SSDI in a quarter if you are fully insured and have at least 20 work credits in the 40-quarter period ending with that quarter. Different rules apply to people disabled before age 31, people with an earlier period of disability that began before 31, and people who are statutorily blind. Once you stop working, the credits from your working years age out of that window one quarter at a time.

The last quarter you meet the rule sets your date last insured. SSA's operating manual bars setting your disability onset after that date, but a claim filed later can still succeed if the evidence shows the disability began on or before it. Your work credits and your date last insured both come from your earnings record, which is the first thing to check if you left work years before you retired.

Back to contents

What to settle before you claim early retirement benefits

The answer turns on dates more than on any general rule. Before you file for retirement, four facts shape the outcome:

• When your condition first stopped you from working, and what medical records show it.
• How many months remain before your full retirement age, since SSDI entitlement must start before it.
• Whether you were insured for disability when your condition began, based on your earnings record.
• Whether you need income now, given that each month of retirement paid before SSDI entitlement begins adds to the reduction, unless some or all of that month's benefit was withheld because of work earnings.

If you have already started retirement benefits, the same four facts apply, and the 12-month back-benefit window makes the date you file for SSDI matter. A disability lawyer can review those dates against your records before you file either application, since this decision turns on how the onset evidence, the insured status and the timing line up.

Back to contents