The Case for Disability And Early Retirement

It seems like we spend all our lives planning for retirement, but when the time comes, we realize that making the right choice at the right time is far more complicated than expected.

In order to plan effectively, there are several factors to consider. First, do you want to retire early? Maybe you do not want to, but are you dealing with a condition that will not allow you to keep working? Second, do you know your benefits? As you can see, determining if it is the right time to retire is a completely personal choice.

How to decide if you want to retire early

Most people have a hard time trying to identify if they should or should not retire early. They are concerned because they do not know if they can, if they are ready, if their medical condition would qualify, or if they even have any benefits. As with everything, it is a matter of preparation and gut feeling. If you have prepared, then you will retire whenever it feels right.

Here are some key aspects you need to consider:

  • Are you debt-free?
  • Do you have savings?
  • Can you live on a budget?
  • Do you want to enjoy a new plan ahead?

Despite that, there is still one relevant matter to consider: your health condition!

The Disability Route

Health conditions are the primary reason for senior citizens to leave their work. When you have a disability and you can no longer perform at work, the glaring choice, and probably the most logical one, is retirement, right? Sometimes, there is no other choice but to retire. Workers are afraid of filing for early retirement due to disability because they do not know whether they can, whether they would be eligible or whether they would lose benefits.

Most people are aware of the benefits that workers get if they paid into Social Security. In short, these Social Security retirement benefits from the Social Security Administration are given to qualified workers based on their earnings’ record or for those individuals who paid Social Security taxes while working. Normally, full retirement age, the age when you will be able to collect your full retirement benefit amount, depends on your birth year. The full retirement age is 66 if you were born from 1943 to 1954 and it gradually increases depending on your birth year up to an age of 67. For anyone born 1960 or later, full retirement benefits are payable at age 67. What most people miss, is the fact that the early retirement benefits are offered at age 62, although they are paid at a reduced rate.

Some people who retire early don’t normally file for Social Security disability benefits, but if you have been suffering from a physical or mental condition for the last 12 months or anticipate having one due to a progressively deteriorating condition that will prevent you from doing work, then you may very well be eligible for those disability benefits.

There are some factors that you should be aware of when applying for early retirement due to disabilities:

If you decide to retire early, before the age of 62, you will see a reduced amount of benefits, lowering up to 30%. Another important factor is that the benefit amount does not increase to a full retirement amount. This is a vital fact to be aware of for your future financial planning.

In addition, the Social Security application process includes an evaluation of your submission to ensure that you meet some basic requirements, including:

  • How You Qualify? – whether you worked at Social Security covered jobs and have a medical condition that meets Social Security’s definition of disability.
  • Work Needed – This is referring to work credits. Normally, 40 credits are needed, with 20 earned over the last 10 years.
  • Meaning of Disability – Social Security has a strict standard that does not pay for partial or for short-term disability.
  • Determination of Disabled – this is determined through a 5 step- evaluation process that includes whether: 1) you’re working?; 2) you have a “severe” condition; 3) You have a disabling condition according to their list; 4) You’re precluded for doing your previous work; and 5) you are capable of doing alternate work.
  • Special Situations – include some other categories, that if exist, may help you become otherwise qualified.


But wait, there is more!

You might be asking if there is any way to have extra benefits? The answer is yes! You may be entitled to retroactive benefits if the Social Security Administration determines that you became disabled before you started to receive benefits from early retirement. In addition, you may be able to add a second layer of advantages if you can prove you were disabled before you were eligible for early retirement due to disability. This is known as a disability freeze and it will add up when your benefit amount is calculated.

However, if they determine that your disability did not preexist before receiving the benefits, then you will not receive the retroactive payments. Instead, early retirement benefits will transform into disability benefits.

There are many roads a person can take when filing for Social Security benefits, and the decisions made must be adapted to each profile. If you are considering or need to apply for disability, then you really should consult with an attorney that’s seasoned with these matters who will help you to make a substantive claim to the Social Security Administration. Contact the Lundy Law Group, LLC if you have any questions.

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Paulette Lundy

Attorney Paulette Lundy is the Founder of P.A. Lundy & Associates, LLC, a law firm in Columbia, Maryland, Howard County. P.A. Lundy & Associates was established out of Paulette’s love, passion and life’s purpose to assist people to become better stewards of their resources through proper legacy development, planning, organizing and effective implementation. Paulette’s life is devoted to educating people about the pleasures of planning your legacy “Your Way” and securing your family’s peaceful future in your absence.

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