At some point in your life, you may you need the help of the Social Security disability program, which is insurance against the loss of work due to serious illness or injury. Social Security is not a welfare program; it is insurance that you paid for in the form of payroll taxes throughout your working life. If you are approaching retirement age, the question then arises: apply for disability benefits or just wait for Social Security retirement?
Retirement Benefits at 62
At age 62, you have reached early retirement age. You can file an application with Social Security, and if you have paid in to the system you will begin drawing monthly benefits. However, early retirement benefits amount to about 75 percent of what your full retirement would be, and they stay at the lower early-retirement level for the rest of your life. If you wait until you reach full retirement age, then you will collect full benefits; you will receive a premium if you wait until the age of 70.
If you apply for disability benefits, and are approved, you will earn the same as you would at full retirement age. Social Security uses a complicated formula to figure the amount of your disability/retirement benefits, depending on the level of your annual pay in the years you were earning wages and paying Social Security taxes. In 2011, the average disability benefit was about $1,100 a month; in addition, those on the Social Security disability program are eligible for Medicare, no matter their age.
Disability at Early Retirement
If you are between the ages of 62 and your full retirement age, and have suffered a medical disability, you are better off applying for the disability benefits. You may be entitled to back benefits up to 12 months before your date of application (with a five-month waiting period then applied). And if you have already taken early retirement, Social Security will make up the difference between your retirement benefits and your full disability benefits, if you are approved for disability.
Maximum Family Benefit
You should be aware that Social Security applies a guideline known as the maximum family benefit (MFB). If you apply for disability, and anyone else in your household is drawing benefits on your own work record, then the combined total cannot exceed the MFB, which also depends on your earnings record.
Full Retirement Age
When you do reach full retirement age, your benefits simply continue as retirement benefits, and your disability case is closed. You cannot apply for disability after you have reached full retirement age, nor can you draw benefits from both programs at any time.