When approaching retirement age, many people have questions about what types of benefits they qualify for upon retirement.
With 40% of adults aged 65 and over also managing a disability, it’s no surprise that pre-retirees often ask, “Can I collect retirement benefits and disability?”
In one sense, no, you can’t.
If you collect Social Security retirement benefits, you cannot receive Social Security disability insurance (SSDI). There is more detail to this answer, which we’ll be covering in this article. But know that you are not allowed to collect both retirement benefits and SSDI.
However, depending on your income and assets, you may be able to collect Supplemental Security Income (SSI) as well as retirement benefits.
We’ll go over your options for navigating retirement and disability benefits, but first let’s go over the rules of disability and retirement benefits.
SSDI, SSI, and Retirement: What You Need to Know
There are some essential differences in how applicants qualify for disability and retirement benefits.
First, aside from having a verifiable disability, eligibility for SSDI and SSI depend on two different criteria. SSDI depends on your Social Security work credits, whereas SSI depends on your income and resources.
For SSDI, the number of work credits you have on your Social Security record determines the amount of your benefit. The recency of your work history is important as well. You must have earned work credits within the last five years to be eligible for SSDI.
The average monthly benefit paid out in 2022 is $1,358, though it is possible to receive up to $3,345 per month. In order to receive the maximum benefit for which you are eligible, we recommend working with a disability benefits lawyer when you’re ready to fill out your application.
The fact is that over 60% of disability claim applications are denied, often due to avoidable mistakes. Working with an experienced legal professional can increase your likelihood of being approved for benefits. The appeal process, if you do receive a denial, is also easier when you work with a disability benefits attorney.
The bottom line for SSDI is that you must have a solid and recent work history in order to qualify and receive benefits.
SSI, on the other hand, doesn’t require significant work credits. It is meant for those with low income and few resources who are at least age 65, blind, or disabled.
Youdo not necessarily have to be disabled if you meet the age requirement for SSI. If you are age 65 or over and have limited income and resources, you will qualify for SSI.
The SSI monthly benefit amount is much lower than for SSDI. The maximum amounts for 2022 are $841 for individuals and $1,261 for individuals with an eligible spouse.
For both SSDI and SSI, your medical condition must meet Social Security’s definition of disability.
Because we have covered the definition of disability elsewhere in greater detail, we won’t give all that information here. We encourage you to read our article about how Social Security determines disability if you want to learn more.
To quickly summarize, here are the two main points of the definition:
- You must have a verifiable medical condition that is either expected to result in death or has lasted/is expected to last continuously for at least 12 months.
- You must be unable to engage in substantial gainful activity (SGA). That is, you must be unable to work enough to fully support yourself and your family.
According to the CDC, 2 in 5 adults aged 65 and older have a disability. This means that some people who are eligible for retirement benefits may also qualify for SSI. We’ll discuss this in more detail later.
Let’s talk about retirement.
Retirement benefits depends essentially on two things:
- Whether you have the required amount of Social Security work credits
- The age at which you retired
You must have at least 40 work credits in order to receive Social Security retirement benefits. Currently, you may earn up to four credits a year. The amount of earnings required to earn a work credit may change each year.
In 2022, you earn one credit for every $1,510 in covered earnings each year. To get the maximum four credits for the year, you must earn $6,040.
Basically, you must have worked for at least 10 years while earning the maximum amount of work credits each year.
Note that, unlike disability benefits, your age impacts the amount of your retirement benefits.
The age at which you are eligible to receive your full retirement benefit amount depends on when you were born. Full retirement age for those born from 1943 to 1954 is 66. For anyone born in 1955 or later, full retirement age is 67.
If you choose to delay retirement, the amount of your retirement benefit will increase up until age 70. There is no increase in benefits after the age of 70.
Should you choose to retire early, you can start receiving benefits at age 62. However, your benefit will be reduced if you elect to collect benefits before full retirement age.
Social Security, as well as many reputable financial planners, will tell you that retirement benefits should be only one part of your full retirement plan.
If you’re a pre-retiree, it’s important to know the approximate amount in benefits you will receive from Social Security upon retirement. Knowing this information can help you better plan for your future.
You can approximate the amount in benefits you could be eligible for using Social Security’s Online Benefits Calculator. Make sure you read the instructions carefully and input your information as accurately as possible.
Now that you understand the requirements for disability and retirement benefits, let’s unpack why Social Security doesn’t pay out retirement and SSDI simultaneously.
Why Can’t I Receive Retirement and SSDI at the Same Time?
What’s important to note first is that Social Security’s definition of disability requires that an applicant’s medical condition prevents him or her from working at full capacity.
Essentially, for those of “working age” (18-66 in 2022), a medical condition is considered a disability when it forces someone into an unwanted “early retirement”.
That’s where Social Security disability insurance (SSDI) comes in.
SSDI was originally created to provide disability benefits to those who become unable to work but have not yet reached retirement age. At first, the program was for workers aged 50-65, but the age range has since expanded.
If your disability prevents you from working, SSDI is supposed to hold you over until you reach the age where you can start receiving full retirement benefits.
So, how does this work? Let’s discuss disability and early retirement to clarify how these Social Security benefits are paid out.
Retiring Early and Disability Benefits
If you’ve reached the age of 62, there are a few things you should know about early retirement and disability.
Say that you’ve opted for early retirement fully knowing that your benefit amount will be less than if you’d waited for full retirement age. Not long after your retirement, you develop a disability. What are your options?
You could continue to collect your retirement benefits. However, your early retirement benefit amount will be less than SSDI.
The second option would, then, be to apply for disability benefits, specifically SSDI. If your disability claim application is approved, Social Security will start paying you disability benefits rather than retirement benefits.
Remember, you cannot receive both SSDI and retirement benefits.
In the above scenario where you opt for early retirement and subsequently become disabled, Social Security will not pay full retirement benefits once you reach age 66 or 67. You will continue to receive the reduced retirement benefit because you elected to retire early.
The situation is different if you claim early retirement but were disabled prior to that decision.
You apply for disability benefits and Social Security agrees that your disability began prior to retirement. In that case, you’ll start receiving disability benefits and Social Security will make up the difference between your early retirement payments and the full disability benefits for those months (up to 12 months) you were disabled and received early retirement benefits.
Again, you do not receive SSDI and retirement benefits at the same time. SSDI payments replace the retirement payments you were initially receiving.
In this situation, once you reach full retirement age, you will be awarded the full amount of retirement benefits as though you never opted for early retirement.
Depending on your financial situation, it may be best to hold off on retirement until you reach full retirement age so that you can collect the full amount of your Social Security benefit.
If you have a disability and are contemplating early retirement, apply for disability benefits first. As mentioned before, the SSDI benefit amount is always greater than the early retirement benefit amount.
Collecting SSI and Retirement Benefits
Though you may not collect SSDI and retirement benefits at the same time, people eligible for retirement benefits who have low income and few resources may also qualify for SSI.
You may receive more in benefitsif your state adds money to the federal SSI payment. But if you have other income such as wages, pensions, or other Social Security benefits, you may receive less.
It’s important to note that any other Social Security benefit—including retirement—you receive is counted as income when Social Security determines your SSI benefit amount.
The other fact to keep in mind is that even the maximum SSI benefit payment is quite modest. Again, in 2022, the Federal Benefit Rate (FBR) for Supplemental Security Income (SSI) is $841 per month for individuals and $1,261 per month for couples.
In order to be eligible for SSI, your total monthly income cannot exceed the Federal Benefit Rate, and your resources must be valued at less than $2,000 for an individual or $3,000 for an eligible couple.
To be very clear, if you have any other type of countable income, your SSI amount will most likely be less than the FBR.
Know that it’s also possible to collect SSDI and SSI benefits at the same time. You can read more about collecting both types of benefits in our article on that topic.
Getting Disability Benefits Assistance
With more awareness of the options available to you, perhaps you’ve decided that your next step is to determine whether you’re eligible for disability benefits.
This is a really important step, but not everyone does their homework on it.
Social Security’s definition of disability is very specific, and it can be a headache to figure out whether your medical condition meets the criteria. You also need to gather information about your work history and financial situation to determine eligibility.
You can cut down on overwhelm and errors by getting an online disability case evaluation.
By getting a disability case evaluation first, it can take less time to determine whether you qualify for disability benefits. And if you don’t qualify? You can put your energy toward considering other options.
At BenefitsClaim.com, we offer a free online disability case evaluation. All you have to do is fill out our 1-minute survey and fill in your contact information.
Someone from our team will get in touch with you about next steps. If you have other questions, feel free to reach out at email@example.com.