The Social Security Administration provides essential benefits to its members who have paid through contributions in their payroll taxes in the system until the members meet the required Social Security credits. According to the SSA Retirement Benefits program, you can collect your retirement benefits as early as you reach the age of 62. Meanwhile, you can get your Social Security Disability Insurance (SSDI), if you are no longer capable of working due to a permanent medical condition.
Based on the rules of Social Security Administration, you cannot claim both your retirement and disability benefits at the same time. You may either draw one, or the other, but not both simultaneously. However, in every rule, there is an exception, and later on, you will learn the only way to claim your retirement and disability benefits at the same time. For now, you must know first the basics about the qualifications on how to get retirement and disability benefits.
What Qualifies You for SSA Benefits?
Well, generally, SSA is known for its two major program benefits for their workers, the Retirement Benefits and the Disability benefits. Hence, you must know how the system works and the qualifications that you must need to meet, in order to enjoy the benefits of the program.
Therefore, let’s start with your retirement benefits and its qualifications.
How Do You Qualify for Retirement Benefits
To qualify for the retirement benefit of SSA, you must earn the required Social Security credits by paying your Social Security taxes. The required number of Social Security Credits to qualify for a retirement benefit varies and will depend on your birth year. Let’s say you were born in the year 1929 or later, your required SS credits is 40 and that is equivalent to 10 years of work and contribution.
However, there are some instances that you stop working, maybe because you have been laid off from work, or you need to go back to school, and some other reasons before you meet the desired number of credits to qualify for the retirement benefits. Well, no worries since your credits will still remain on the Social Security Record, so that, if ever you have come back to work again, you are still allowed to continue and complete the required number of credits, and still, be qualified for the retirement benefit.
Remember that SSA will not give you any retirement benefit UNLESS you meet the required number of Social Security credits.
Factors that can Affect Your Benefit Amount
If you want to know how much you will receive on your retirement benefit, well, it will be based on your earnings for your entire working career. This means that if you have higher lifetime earnings, you will be paid with higher retirement benefits. However, if there are years that you had been laid off from work, or you had a low income, the benefit amount might be lowered compared to when you have steady work and income.
Another factor that can influence the benefit payment you will receive is based on the age you wish to retire. The earliest possible retirement age is 62, wherein your benefit might be lower than if you wait longer. Hence, here are the three types of retirement age.
1. Full Retirement Age
Here is a table that shows the list of the full retirement age by birth year.
|Age to receive full social security benefits|
|Year of birth||Full retirement age|
|1943 to 1954||66|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 and later||67|
|REMINDER: People who are born on January 1st of any year must refer to the previous year|
2. Early Retirement
For early retirement age, you can claim your retirement benefit as early as you reach the age of 62. However, your retirement benefit will be reduced compared when you wait until the full retirement age. For example, you turn 62 this year (2020), and then you filed for early retirement, your benefit amount will be reduced by 25% compared if you wait until the full retirement age of 66-67.
Hence, there are certain situations that force people to retire early, for example, sickness and other health problems. You may consider applying for a Social Security disability benefit since the disability benefit amount is the same as a full retirement benefit.
3. Delayed Retirement
What’s good about the retirement program of Social Security is that you can decide whether you claim your benefits early, in their full maturity age, or you can delay your benefit collection. If you do work beyond your full retirement age, your Social Security benefits will increase in the future. This means that if you work beyond the age of 67, which is the full retirement age, each extra year you work will be added to your earnings in the Social Security Record.
The higher the lifetime earnings, the higher the benefit amount you will receive.
How do You Qualify for Disability Benefits?
You may apply for Social Security Disability benefits if you are not capable of working because of a medical condition that is expected to last one year or longer, which may result in death. To see the list of impairments for Disability Evaluation under Social Security, you may check this site
The Social Security Disability program pays disability benefits in two ways: (1) the Social Security Disability Insurance (SSDI) and (2) the Supplemental Security Income (SSI).
In general, to qualify for the disability benefits, you must meet these earning requirements:
1. A latest work test that is based on your age during the time you became disabled.
Here is a table that shows the rule for requirement #1.
|If you become disabled during these quarters||You generally need…|
|In or before the quarter you turn 24 years old||1 ½ year of work during the three-year period ending with the quarter you became disabled|
|In the quarter after you turned 24 years old, but before the quarter you turn 31 years old||Work during half the time for the period beginning with the quarter after you turned 21 years old and ending with the quarter you became disabled.|
|In the quarter you turn 31 years old or later||Work during five years out of the 10-year period ending with the quarter you became disabled.|
Here are the calendar quarters:
- First Quarter: from January 1 to March 31
- Second quarter: from April 1 to June 30
- Third Quarter: from July 1 to September 30
- Fourth Quarter: from October 1 to December 31
2. A period of work test that proves you have worked long enough for Social Security
When Should You Apply and What are the Requirements?
Once you have become disabled, you should apply for disability benefits immediately since the processing of the application will usually take three to five months. You may apply online by visiting this site.
Make sure to prepare the following information:
- Your birth registration or a baptismal certificate will do
- Your social security number or any identification number such as driver’s license
- Your past employment history
- A copy of your latest W-2 Form
If you are self-employed:
- Your federal tax returns for the previous year
Your past medical history:
- Personal information of the doctors, other health care workers, hospital or clinic that took care of you
- Your past medical records that include lab results
- Details of the all the medications you take such as the brand and generic name, the dose, and the dosage form
- Record of the dates of your hospital visits
Therefore, you already know the basics of retirement benefits and disability benefits. Unfortunately, you cannot claim both of these Social Security benefits at the same time. It’s either one or the other, but as I said a while ago that there is an exception to this rule, which you will find out below.
How Can You Get Retirement and Disability Benefits at The Same Time
If you become disabled once you reach your full retirement age, Social Security will just close your case and renames your disability benefit to “retirement.” In fact, you do not have the choice and as the rule per se, you cannot withdraw both benefits.
Neither you cannot keep your disability benefits, nor you can keep it and wait for your retirement benefits to increase. However, there is a way on how you can get retirement and disability benefits simultaneously. Remember the early retirement age you have read above? Well, this is how it works.
You need to apply first for Social Security Disability Benefits. In this way, it will establish your protected application date and the putative onset date of your disabling condition. You may refer to the above guidelines on what are the requirements to qualify for the disability benefits.
Once you have applied your application for Social Security Disability Benefits, you may now move on with the next step, which is to file for early retirement. The SSA will accept your application for early retirement once you have met the required Social Security credits, which is 40. Once your application has been processed, you will now start receiving your retirement benefits at a reduced rate since withdrawing early retirement will cost you 25% of the full retirement amount.
Just wait until your Social Security disability benefit is approved so that you can enjoy the full and unreduced retirement benefit amount. You will also be receiving back pay from Social Security disability benefits for the entire time you are qualified. This means you will be receiving your full retirement for the months you didn’t receive any retirement payments and the deducted 25% of your retirement amount since you have initially received a reduced payment due to early retirement. The same goes as well for your disability benefits.
Moreover, your retirement benefits will be adjusted; therefore, you will still enjoy your full retirement benefits once you reach your full retirement age.
Deciding When is the Right Time to Retire
Deciding when is the right time to retire is a personal decision to make. Regardless of the age you retire, it is recommended to contact your local SSA office beforehand, to know and prepare your life choices so that you have made the right decision.
This is because choosing what month to retire can affect the benefit amount you will receive, it may be higher benefit payments or it may be reduced. Therefore, it is still best to consult a finance lawyer to help you in assisting your financial option, so that you can make the most out of your benefits.