Retirement Age

In 1983 Congress enacted legislation to increase the full retirement age from 65 to 67.  If you will be retiring in 2016, your full retirement age is 66.  If you were born after 1960, then your full retirement age is 67.

(see https://www.ssa.gov/planners/retire/agereduction.html for complete retirement age info)

However, Congress did not change the early retirement age of 62.  Therefore, if you will be 62 years old in 2016 and choose to take early retirement benefits, you will receive a reduced amount of 75%.  (see https://www.ssa.gov/planners/retire/1943.html#&sb=0 for complete table of reductions)

Early Retirement and Disability Benefits

So, if you filed for Social Security disability insurance benefits (DIB) and you either are receiving early retirement benefits or are contemplating filing for early retirement benefits, keep in mind your early retirement benefits will affect your disability benefits. NOTE: This does not apply to Supplemental Security Income (SSI) benefits.

Remember, your disability benefit monthly amount is determined by your earnings over your life time. You can access your earnings record at www.ssa.gov; click on the “My Social Security” tab. You will need to create an account if you have not logged into this site before.   Once there, you can view your earnings statement and see the amount you would receive per month if you are found disabled.

Without any early retirement benefits, if you would receive $2,000 per month for Social Security disability insurance benefits, you would get a lump sum payment for your past due benefits based upon this monthly amount. So if you file for your disability benefits and it takes 2 years before you are awarded benefits, then you would receive $48,000 in past due benefits.

(NOTE: There is a 5 month wait period before you are paid your DIB payments . See 20 C.F.R. 404.316). Once this period ends you are entitled to receive benefits; this is called the “entitlement date”.

When the early retirement benefits are in play, if you would receive $2,000 per month for Social Security disability insurance benefits, but you are receiving $1,500 in early retirement benefits, you would only get $500 per month in past due benefits over the same time period listed above. So your past due award would only be $12,000.

When you receive disability insurance benefits, you may receive them until you reach full retirement age, then the benefits just change into retirement benefits (see 20 C.F.R. 404.316).

If you receive early retirement benefits and then receive disability benefits, you would receive your past due disability benefits as noted above, but then you would receive your full retirement amount when you reach full retirement age rather than the reduced amount. It’s as if you never took early retirement.

CAUTION: Just because the retirement age was increased, the age for selecting Medicare benefits did not. If you do not take your Medicare benefits around age 65 you may pay higher premiums later.