There is no question that aging comes with its share of physical challenges. However, what if you aren’t ready to retire completely but a disability keeps you from working. We recently had a reader submit a similar question: “Is there an age-related cap for SSDI? I am 72 years old and cannot keep working due to a medical condition. I already get regular Social Security payments.” So, is there a point where the Social Security Administration (SSA) will say you’re simply too old for disability benefits? The answer here is yes, but it’s not owing to ageism.
What many people don’t realize is that the SSA is responsible for administering both disability and retirement benefits. But one individual cannot receive payments from both programs at the same time. Once a person reaches full retirement age (FRA), if they are receiving disability, they simply transition to retirement benefits instead.
However, the age at when a person can no longer qualify for Social Security Disability Insurance (SSDI) has some potential variability.
What Age Makes Someone Too Old to Apply for Disability Benefits?
The SSA will accept SSDI applications up to one year before an individual’s FRA (after which they’ll be too old).
Currently the FRA is 66 years and 4 months for people born in 1956, and 66 and 6 months for those born in 1957. For people born from Sept. 2, 1956, through July 1, 1957, they’ll reach their FRA in 2023. Beyond that, the current FRA for people born after 1960 is essentially 67 years old.
A worker with enough employment credits over their career can apply for early retirement beginning at age 62. However, they will receive as much as 30% less than their full benefit if they do. Social Security reduces benefits by 6.67% per year for each year of early retirement.
Plus, they’ll no longer be eligible for SSDI as well. Remember, this is because one person cannot simultaneously receive both Social Security disability and retirement benefits.
In 1956, Congress put SSDI into effect for qualifying workers with impairment as a “stopgap” between a paycheck and retirement. If someone is receiving early retirement, there is no void to fill. They’re technically not too old, they’re just not eligible anymore. However, there are a few exceptions to the rule.
Is it Better to Apply for Disability or Early Retirement?
For disabled individuals between the age of 62-66 (depending on a person’s FRA date), applying for disability first makes sense. This is because if the SSA grants disability, the SSDI benefit payment will be more than early retirement.
How so? Well, the SSA will calculate any disability benefits they approve as if you were at FRA, no matter your age. This means any SSDI payments you receive will reflect 100% of the benefit amount from your lifetime earnings.
Once someone takes early retirement, however, they will receive that benefit rate reduction for the rest of their life. But if an applicant qualifies for SSDI first, when they reach their FRA, their disability will simply transition to retirement. And this will happen without any monetary loss in the interim.
Can I Apply for Both Disability and Early Retirement?
In some cases, people may choose to apply for SSDI and early retirement at the same time. The SSA does allow individuals who are three months before their 62nd birthday to do this. Usually someone applying for both will do so to insure they have some money while awaiting their disability claim decision. That’s because disability claims may take months or years to go through.
But there is some risk with this avenue. If the SSDI claim is not successful, then the applicant will be stuck with the lower early retirement rate forever. In cases where a disability is extreme, however, this may be a route to take. Especially if approval for disability is highly likely.
The reason to take this gamble, is if the SSA approves the claim, the claimant may receive retroactive pay. This only happens in cases where the disability was present before early retirement. But, when the SSA grants this, the claimant receives backpay to meet the higher rate for up to 12 months.
Plus, any early retirement reduction will only be for time the applicant was receiving benefits prior to their SSDI decision. There may still be a slight rate reduction when they finally reach FRA, but it will be less.
You’re Never Too Old to Apply for Supplemental Security Income Benefits
There is one other caveat here, and that’s Supplemental Security Income (SSI). Very low-income applicants with limited assets who are 65 years old may apply for both early retirement and SSI. This form of assistance does not look at work credits. Age, need, and disability are the determining factors, which is why someone may apply for both. However, because the financial parameters are strict, anyone receiving a decent early retirement payout may make too much to qualify.
Can I Switch from Early Retirement to Disability After the Fact?
This is very complicated to make happen. However, it might be possible in cases where someone takes early retirement and then ends up with severe disability.
For example, let’s say someone takes early retirement at 62 and a few months later gets a serious cancer diagnosis. They can file for SSDI and upon approval, they’ll get the higher rate, backdated to their disability application date. All this does is bump up the rate to full benefits, however. There will be no backpay because the disability came after early retirement. Also, there will still be some rate reduction when the person reaches FRA. But again it’ll be less since the SSA will calculate the reduction only for the months of early retirement payments.
Also, in cases where an individual later discovers they had a qualifying disability prior to taking early retirement, they may apply. If they can prove the disability was in place beforehand, the SSA may restore full benefits.
But as mentioned, these are very specific situations and anyone considering such a move should absolutely contact a disability attorney. A skilled lawyer can help with this and any other claims having to do with disability versus retirement benefits. Plus, studies show that claimants with representation are 3x more likely to win their case.
Because no, you’re not too old for disability unless you’re actually your FRA. Don’t miss out on potential benefits you deserve just because you didn’t know the rules!
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Kimberly Dawn Neumann
Kimberly Dawn Neumann is a multi-published NYC-based magazine and book writer whose work has appeared in a wide variety of publications ranging from Forbes to Cosmopolitan. She graduated summa cum laude from the University of Maryland, College of Journalism. For more, visit: www.KDNeumann.com, Instagram @dancerscribe, and Twitter @KimberlyNeumann