HOW TO RETIRE EARLY WITHOUT LOSING SOCIAL SECURITY BENEFITS
This is the third post in my series on social security and retirement strategies to increase your benefits. I have previously discussed the "file and suspend" strategy to increase retirement benefits for retired couples, as well as the future of the "file and suspend" loophole and who might benefit from this strategy while it lasts. In this post, I will be discussing how disabled individuals can obtain their full social security benefits, even if they are forced to stop working before their full retirement age (FRA).
There are many people who are opting to take early retirement and thereby accepting less than their full monthly retirement benefits, because they just can’t wait until their full retirement age (FRA) to stop working. Some people choose to take early retirement as a lifestyle choice. Some people choose early retirement as a result of a disability that forces them out of the workforce sooner than they had planned; for those people, who leave due to disability rather than choice, there maybe a better option.
Employees who are eligible for early retirement, but who have not yet reached their full retirement age, are eligible to receive their full social security benefit if they are deemed disabled by the Social Security Administration. Age is certainly not a disability, but there are times where people choose to retire early, not because it’s a choice, but because physical limitations have made it such that they can no longer work. These folks typically lose thousands and thousands of dollars in benefits over the course of their lifetime, simply by virtue of having retired a few years early.
Where early retirement comes as a result of an individual’s inability to continue to work, then it isn’t retirement; it is disability, and by applying for disability benefits instead of early retirement, people in their 60's might avoid taking a reduced benefit. Those who are eligible for disability retirement, as opposed to age related retirement, can receive their full social security benefits even if they haven’t reached their full retirement age.
If you think you might fall into this category, even if you have already applied for early retirement, it may not be too late to submit an application for social security disability. If you file for both retirement and disability and later find that you are denied social security disability, you have lost nothing and you can rely on your reduced social security retirement benefits. However, if you apply for both and find that you are eligible for social security disability, then your retirement benefit may be converted to the higher disability retirement rate.
If you are retiring early because you are unable to work due to physical or mental limitations, you may want to contact an attorney to see if you are eligible to apply for social security disability benefits.