Mester, Grabow & Miller, LLC a Hartford Connecticut law firm

Mester, Grabow & Miller is a general practice law firm based in Hartford, Connecticut.

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Disability vs. Early retirement---which way should I go?

At age 62 you are eligible to start your Social Security retirement benefits, but the benefit amount you receive will be substantially less than your full retirement benefit amount.  If you apply for disability and are granted you will receive your full retirement benefit amount as if you retired at full retirement age.

    If you start your retirement benefits at age 62 your monthly benefit is reduced by about 30% of what it would be if you retired at full retirement age (66 to 67 years of age depending on your year of birth).  If you have no health issues and have had no medical treatment your only option will be to take early retirement. If your reasons for retiring early are tied to health related issues you may be a candidate for social security disability. If you are granted disability you will receive your full benefit amount as if you retired at full retirement age.  Sometimes your disability amount can be more than your full retirement amount.  This can happen because with disability benefits they look at a shorter period of past work compared to the 35 years of highest wages considered for retirement. Most people are earning more later in life compared to when they first started working in more menial positions. If your early low paying years are not calculated into your monthly payment you will have a higher payment.

    You can apply for social security disability even if you are already receiving a retirement through your former employer, a pension, or a worker's compensation payment.  If your retirement was due to health problems or even if your health problems started when you retired but have worsened since retirement you are a strong candidate for social security disability.  If you apply Social Security will require that you are not working or you are working at a level that is considered below substantial gainful activity (SGA). SGA is currently defined as a non-blind person making less than $1,090 per month (including taxes).  Social security will also look to see that your health problems have lasted or will last at least 12 months and that you are still insured for the social security disability insurance program.

    You must be insured under the social security program in order to receive your disability benefits.  In order to determine if you are insured social security considers the number of quarters of coverage you earned.  You earn quarters or credits based off your wages and you can earn no more than four quarters of coverage per year.  The amount of credit you need to be insured is covered thoroughly in the article Social Security Disability Work Credits.  If you have not worked enough you are only eligible for Supplemental Security Income which is a need-based program and only available to those with limited assets (less than $2,000).

    If you have worked enough and you are insured you still need to be wary of your date last insured (DLI). DLI is the last day you meet insured status.  Social security uses a complicated calculator to determine your DLI.  Basically you need to be aware that once you stop working you will eventually no longer be insured. This means waiting to apply after you stop working could make you lose your insured status. Be aware that even if your DLI has passed there is still a possibility of being eligible for disability. You would need to prove through medical evidence that your disability started prior to your DLI date.

If time is an issue you can apply for early retirement online and your payments will start after review of your application.   Applying for Social Security Disability on average takes longer.  Average wait times vary from social security office state to state but a rough estimate would be 6 months for an initial application decision, if you are denied be prepared for another 6 months at least for a reconsideration decision and if that is a denial it can take 12 months or more for a hearing to be scheduled and decided before an administrative law judge.  If you can wait out the process it will be worthwhile because you will received your back pay for the time you waited during your application and you will be receiving the full retirement benefit amount per month instead of the lower early retirement amount.  

    Another option would be to apply for disability and start your early retirement benefits at the same time, so that you receive the early retirement payments if you need money immediately. If you elect to do this you must be aware that there is no guarantee you will be granted disability and you will be stuck collecting less than your full retirement rate for the rest of your life.  You must also be aware that If you elect early retirement, you must establish that you are disabled prior to the date of the election, or there will be no change in your rate.  You will be stuck with the lower early retirement amount.  If you do prevail in your case your monthly payments will increase to the full retirement/disability rate but your back pay will be offset from the money you have already received. Or in other words you would only receive the difference between your new payment and your old payment per month for the months of retroactive pay you are due.
    At age 62 or older you are considered under special rules by the social security disability administration. A person age 60 or older is categorized as a 'person closely approaching retirement age' and their age is considered to be a significant factor in their ability to adjust to other work .   Please see our article on disability after age 55 to better understand how your age makes a favorable difference in your chances of being approved for disability.



Richard B. Grabow

Practice Areas

Hartford Social Security Disability Lawyers