Early Retirement vs. Social Security Disability Benefits

By: Disability Group

If you are 50 years old and have poor physical health should you retire or file for Social Security Disability Insurance benefits (SSDI)?

If you are unable to continue to do your job because of your physical limitations you should file for Social Security Disability Insurance benefits instead of filing for early retirement.

What is Social Security Disability Insurance (SSDI)?

Social Security Disability Insurance benefits fall under title II of the Social Security Act. In order to qualify for SSDI you must have worked long enough and paid Social Security taxes. SSDI works similarly to a pension, where you pay into the plan throughout your working years.  Social Security establishes whether you have worked long enough by assigning work credits to your wages/FICA taxes you paid per year.  For grown adults you need 40 work credits. Once you have 40 work credits you have “insured status.” SSDI benefits are paid to those who have been found disabled as defined by Social Security and have “insured status.”

What is the benefit of filing a Social Security Disability claim instead of filing for early retirement?

  • If you start collecting Social Security retirement benefits early (before the age of 67, for people born in 1960 or later) your benefits are reduced for each month before you reach your full retirement age. 
  • If you receive SSDI you receive full monthly benefits and annual cost of living increases. You are entitled to Medicare and prescription drug coverage.
  • When you reach retirement age your SSDI will be converted automatically into retirement benefits.
  • When the Social Security Administration calculates your retirement benefits the years you receive disability insurance is not included and your retirement benefits will be higher because your earnings are averaged over a shorter period of time. The earnings from SSDI are considered but the number of years you were disabled is not. It ends up looking like you earned more money per year, which equals a higher monthly retirement check.

 How can a Social Security lawyer help?

If you are between the ages of 50 and 64 and you stopped working because physically you just could not do your job anymore, you may be entitled to SSDI. SSDI are benefits funded by the taxes you paid during your working years. SSDI is not welfare. A lawyer can evaluate your individual case and help you with the application process. The lawyer will represent you at your hearing in front of the administrative law judge. SSDI are benefits you are entitled to if you have a strong work history and are found disabled as defined by the Social Security Administration.