Can You Collect Retirement and Disability?
Navigate Social Security's rules for retirement and disability benefits. Discover how these benefits are coordinated and what to expect when eligible for both.
Understanding Social Security Benefits
The Social Security Administration manages various benefit programs designed to provide financial support to millions of Americans. These programs include retirement benefits for those who have reached a certain age and disability benefits for individuals unable to work due to a severe medical condition. This article clarifies how Social Security retirement and disability benefits interact and are coordinated.
Understanding Social Security Disability and Retirement Benefits
Social Security Disability Insurance (SSDI) provides financial assistance to individuals who are no longer able to engage in substantial gainful activity due to a medical condition that is expected to last at least one year or result in death. Eligibility for SSDI is tied to an individual’s work history, specifically the payment of Federal Insurance Contributions Act (FICA) taxes through payroll deductions. These taxes fund the Social Security system, and accumulated work credits determine an individual’s insured status for disability benefits.
Social Security Retirement benefits are available to individuals who have reached a specific age and have contributed to the Social Security system through FICA taxes during their working lives. The amount of retirement benefit an individual receives is based on their average indexed monthly earnings over their highest 35 years of earnings. Both SSDI and retirement benefits are considered earned benefits, meaning they are contingent upon an individual’s prior contributions to the Social Security trust funds. These programs are foundational components of the nation’s social safety net, providing income stability based on an individual’s past employment and tax contributions.
The General Rule for Collecting Both
As a general principle, an individual cannot receive full Social Security retirement benefits and full Social Security disability benefits at the same time. The Social Security Administration (SSA) typically pays the higher of the two benefit amounts if an individual qualifies for both. This means that if you are eligible for both disability and retirement, the SSA will not issue two separate, full monthly payments.
A significant aspect of this coordination is the automatic conversion of Social Security Disability benefits to retirement benefits once a recipient reaches their Full Retirement Age (FRA). This conversion is a re-categorization of the existing benefit, not the initiation of a new claim. For example, if an individual is receiving SSDI benefits, upon reaching their FRA—which ranges from 66 to 67 depending on their birth year—their benefit status will automatically change to retirement benefits.
The monthly benefit amount typically does not change when this conversion occurs. This is because the Social Security disability benefit is already calculated as if the individual had reached their Full Retirement Age. Therefore, the payment amount remains consistent, simply changing its designation from disability to retirement. This seamless transition ensures continuity of income for beneficiaries.
How Social Security Benefits Are Coordinated
The Social Security Administration has specific mechanisms for coordinating retirement and disability benefits, particularly when an individual becomes eligible for both. If someone is already receiving Social Security retirement benefits and then applies for and is approved for disability benefits, the SSA will review their claim. In such cases, the individual’s benefit amount will be adjusted to the higher of the two entitlements, meaning they will receive the disability amount if it exceeds their current retirement benefit.
There are also scenarios where an individual might claim early retirement benefits and subsequently become disabled. If the individual’s Social Security Disability Insurance (SSDI) benefit amount is higher than their reduced early retirement benefit, the SSA will adjust their payments to the higher disability amount. This ensures that beneficiaries receive the maximum benefit for which they are eligible based on their work record and current circumstances, effectively overriding the earlier, reduced retirement claim. The coordination rules are designed to ensure individuals receive the greatest benefit for which they qualify.