Retired Early? Social Security Disability Eligibility
Many early retirees collect SSDI when they can no longer work.
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Many people who retire early because of health problems in their 50s and early 60s may be eligible for the Social Security Disability Insurance (SSDI) program. It does not matter whether you already get a company retirement benefit, long-term disability payments, or worker’s compensation benefits. You have a reasonable chance of approval if your health problems contributed to your decision to retire early or even if your health problems started or worsened after retirement. The Social Security Administration (SSA) will require that you:
- are working at levels below the SGA (substantial gainful activity) level
- have disabling health problems that have lasted or will last at least 12 months, and
- are still insured for the SSDI disability program.
When Are You Insured for the SSDI Program?
Most workers pay Social Security taxes on their wages or self-employment income. Older workers (60 and older) who accumulate 40 quarters of work credits (10 years of work) are “fully insured” for Social Security retirement or disability benefits. But 50-year-olds need only have 7 years of work credits to get insured.
However, you have to be “currently insured” as well. You must have worked at least 5 of the last 10 years to stay insured. SSA calls your "date last insured" your “DLI.”
You steadily worked between 1980 and 2011, earning over $20,000 per year. You retired on December 31, 2011, at age 55. You have enough work credits to be fully and currently insured for SSDI through the end of 2016, when you are 60. Your DLI is December 31, 2016.
You can contact the SSA office and ask if you are insured for SSDI and when your DLI expires.
Can You Get SSDI Benefits If You Become Disabled After Retirement?
Let's continue the example from above.
In 2014, at age 57, you are in a car accident and ultimately require a kidney transplant as a result. (The SSA automatically considers those who have had kidney transplants to be disabled for at least one year.) You were insured for the SSDI program when you became disabled because of your pre-retirement Social Security tax contributions. If your accident occurred on or after January 1, 2017, you would have to wait to collect Social Security retirement benefits instead.
Learn more about the work credits required for SSDI.
Can You File a Claim After Your DLI?
You don't have to apply for SSDI benefits before your DLI; you just have to become disabled before your DLI. If your disability started years ago, it may be harder to prove, but not at all impossible.
If your DLI is before you file your claim, you can :
- Ask your doctor to address in your medical records what your medical condition was, including your functional limitations, before your DLI.
- If you didn’t see a doctor or get a diagnosis before your DLI, ask your doctor to “infer” how long your physical or mental problems likely affected your ability to function based on your history and current findings.
- Tell the SSA about the period before your DLI expired.
- Statements from family, friends and others in the community about your problems and how they affected you before your DLI can also be used to support a claim.
- Consider hiring a disability lawyer, who will be familiar with the difficulties of filing a claim for a disability that began in the past.
Should I Just Wait for Retirement Benefits?
If you're close to 62, it can be still be worthwhile to apply for SSDI. Here's why:
- SSDI benefits can be paid up to 12 months before your application date (called "backpay," or "retroactive payments"), if you were disabled that far back.
- If you are found disabled, you are no longer penalized for taking Social Security early retirement. You will get a larger disability benefit, plus your full retirement benefit at full retirement age.
- The “disability freeze” will limit the effect of zero earnings years.
- You will get early entitlement to Medicare after 24 months of SSDI payments.
What is the disability freeze? When you retire early, multiple zero earnings years can negatively affect your Social Security retirement benefit computation. But if you receive SSDI, your earnings record is frozen. Thanks to the disability freeze, the years you are disabled and unable to contribute to Social Security will not reduce your potential Social Security benefit amount. Essentially, the SSA will exclude from its benefit calculations any zero-income or low-income quarters of earnings from a period of disability. For more information, read DisabilitySecret's article on the disability freeze.
Learn more about retiring early vs. applying for disability benefits.