Introduction
At the Law Offices of Christopher Le, we guide clients through the often-confusing process of securing Social Security benefits. If you are approaching age 62 and living with a disability that prevents you from working, you may be weighing your options carefully. One strategy that many people consider is filing for early retirement benefits at the same time as submitting a Social Security Disability Insurance (SSDI) application. While this approach is not right for everyone, it can offer unique advantages depending on your situation.
This article explains why filing early retirement with your SSDI application could make sense, what benefits it provides, and the potential drawbacks you need to keep in mind.
Understanding SSDI and Early Retirement
SSDI provides monthly income to workers who have paid into Social Security but can no longer work due to a medical condition expected to last at least one year or result in death. Importantly, SSDI benefits are calculated as though you had reached your full retirement age (66–67 for most people), meaning you are not penalized for claiming them early.
By contrast, Social Security early retirement benefits allow you to begin receiving payments at age 62. However, those benefits are permanently reduced—sometimes by as much as 30%—compared to waiting until full retirement age. The trade-off is that you gain access to income sooner, which can be crucial when disability prevents steady employment.
The Challenge of SSDI Processing Times
One of the biggest issues with SSDI is the long wait for approval. Initial applications can take 12–18 months for a decision, and most are denied at first. Appeals may stretch the process even further, often lasting years. During this waiting period, many applicants struggle to cover basic living costs without a reliable source of income.
Filing for early retirement benefits while waiting for an SSDI decision provides a financial bridge that can reduce the stress of these long delays.
Advantages of Filing Early Retirement with Your SSDI Application
1. Immediate Access to Income
Unlike SSDI, which has a mandatory five-month waiting period after disability onset, early retirement benefits can start within a month or two of approval. These payments can help cover rent, groceries, and medical expenses while you wait for the SSA to review your disability claim.
2. Backpay and Adjustments if SSDI Is Approved
If your SSDI application is approved, the SSA will adjust your benefits. You will begin receiving your full SSDI amount—without the early retirement penalty—and you may also be eligible for backpay. This lump sum represents the difference between the reduced retirement payments you already received and the higher SSDI amount for the same period. In effect, early retirement serves as a temporary financial safety net until the larger SSDI benefits begin.
3. A Safety Net if SSDI Is Denied
Because SSDI claims are often denied at first, having early retirement benefits in place ensures you are not left without any income. Even if your disability claim is unsuccessful, you will continue receiving monthly retirement benefits, providing some measure of stability while you consider appealing or exploring other support options.
4. No Harm to Your SSDI Eligibility
Applying for early retirement does not affect the outcome of your SSDI claim. Disability determinations are based on your medical evidence and work history, not on whether you are receiving other Social Security benefits. Many applicants file both without issue.
Drawbacks to Consider
While this dual-filing approach offers advantages, there are potential downsides:
- Permanent Reduction if SSDI Is Denied: If your SSDI claim is ultimately unsuccessful, you will be locked into the reduced early retirement amount for life.
- Slight Reduction for Overlap Period: There may be a small adjustment (less than 1% per month) for the period you received early retirement before your disability onset date.
- Complex Rules on Retroactive Pay: SSA regulations about backpay and onset dates can be complicated, and missteps may impact the amount you ultimately receive.
Because these factors can affect your long-term financial security, it is important to consult with a professional before making a decision.
When This Strategy Works Best
Filing for early retirement with your SSDI application is often most effective if you:
- Are at least 62 and facing financial hardship due to disability.
- Have strong medical documentation supporting your SSDI claim.
- Want a backup plan in case your disability case is delayed or denied.
If you are younger than 62, this option is not available, and focusing on SSDI—or Supplemental Security Income (SSI)—may be more appropriate. Reviewing your estimated benefits through a My Social Security account can help you understand your specific numbers before making a decision.
Final Thoughts
Filing for early retirement benefits alongside your SSDI application can provide immediate relief, a smoother transition to higher benefits if approved, and a safety net if your disability claim is denied. However, the strategy involves important trade-offs that should not be overlooked.
At the Law Offices of Christopher Le, our team can review your case, guide you through the application process, and help maximize your benefits. Contact us today for a free consultation to explore whether this approach is right for you.
