Early Retirement vs. Disability - What You Need to Know
Posted December 16, 2014 by Kari Dickson
Older workers felt the impact of the Great Recession perhaps more than anyone. Many saw their retirement savings lost or growing so slowly they are working well past their planned retirement age. This can be difficult because, in contrast to their younger counterparts, aging workers are more likely to find that a long-standing illness is getting worse, or to develop new health problems that keep them from working.
It certainly is true that it is financially far better to nail down a disability benefit than to accept a reduced retirement benefit, but that is far from the end of what’s important for working people to know. There is a tremendous bias against such a claimant and certain questions must be dealt with head on. The people in the SSA field office have many, many things they need to know and understanding the difference between the right to make a claim and the practicalities of it all is far outside their expertise. Ditto with the “nationwide” and regional alleged representatives trolling for your contact info on the internet.
Nash Disability Law (“NDL”) recently successfully represented a 62-year-old man from Palos Hills who worked his entire life as a union painter. He had back surgery in the 1990’s and always had back pain after that. As he aged, his back pain became unbearable and he was forced to stop working. This was not the sort of back pain the presidential candidate Rand Paul sneered at when he falsely suggested recently there are many loafers on disability getting lucky, just running around saying they “have back pain or anxiety”, and then stumbling into a check. That does not happen and it will not happen for you, your loved one, your patient, or that hard worker with pain/depression a given reader may be counselling.
Our client supported his family members who lost their jobs during the economic downturn, and therefore he had little in savings, all the while toughing it out with very real issues on the job. He filed for early retirement at age 62 to support himself because the underlying evidence was strong he could no longer work. When media outlets tout disability benefits as some sort of easy peasy new dole for the unemployed (not as industrious as they supposedly should be) or folks looking to maximize their money with an early duck from the work force, nothing could be further from the truth when you become involved in the claim process. What are your facts, who will understand them and help them be understood?
Many experienced workers find themselves in the same position as our client. Like our client, older workers can apply for retirement at age 62. If they do this, an actuarial reduction will be applied, meaning that their benefit will be reduced - for the rest of their lives. For workers who are forced to stop working early because of physical or mental impairments, it can indeed be a wise idea to consider applying for Social Security Disability benefits as well. But how do things really work, will such a project really work for you? The answer depends upon many medical and non-medical facts and the real insight is going to come from an experienced local law firm which lives and breathes those facts and sees how they play out every day in the greater Chicago metro area.
If you are approved for Social Security disability benefits, you will likely be entitled to retroactive payment for certain months when you could not work because of severe physical or mental illness. Additionally, your monthly retirement benefit would likely be increased if you are found disabled. This happens for a few reasons. First, your retirement benefits won’t be subject to a reduction because you are collecting “early retirement”; you will have been found to genuinely meet tough disability criteria. Your benefits may also increase because Social Security will “freeze” your earnings record. When Social Security calculates your benefit amount, it will not average the years where you had no income because you were disabled against the years you were healthy and earning money.
If you are an older worker who has to stop working before you hoped because of a physical or mental illness, the easy part is to consider applying for Social Security disability benefits. Yes, succeeding with the disability claim will provide the greatest protection for the retirement benefit you worked so long and hard to earn. But you need to know how your facts size up. Call today.