Ask Atticus: Should I Retire Early or Apply for Disability Benefits?

Dear Atticus,

My 62nd birthday is around the corner and I’m considering early retirement. Over the last few years, my back pain and knee pain have gotten worse and worse — to the point where it’s hard to lift anything heavy, or walk for more than a minute at a time. 

I’ve had to reduce my hours at the grocery store where I work. It’s hard to get by with how little I’m making, and I’m not sure how much longer I’ll be able to work this job at all. 

I’ve heard if I retire early, I’ll get smaller monthly checks than if I’d waited until 67. I’ve also heard getting disability is hard — and can take years. My question is this: Should I retire early and take the reduced amount or apply for Social Security Disability? I want to consider both what’s best for me now, and what’ll be best in the long run.

Sincerely, 

Ready to Rest

Dear Ready to Rest,

We understand how hard it is — and no one should have to work through the pain. At (nearly) 62, you deserve to rest and to focus on your health.

Whether you’re getting early retirement benefits (ERBs) or applying for Social Security Disability Insurance (SSDI) — it’ll make sense to stop working, or continue to cut back on hours. Working less, or not working at all, can increase your chances of getting approved for disability. And you can work while receiving early retirement benefits, but the SSA may reduce your benefit amount. 

The right decision here will depend on whether you’re comfortable waiting for disability benefits. If you have some savings, and can go without working much while your application is processed — SSDI is likely a better call. If you don’t have the time (or money) to spare, you may be better off retiring early. Just keep in mind that if you elect to take early retirement benefits but later you decide that you want to try for disability instead, you may find it harder to get SSDI and to find a disability lawyer who will help with your case.

What’s right for you: Faster money or more money?

Getting early retirement benefits is faster than getting disability benefits. If you’re confident you have enough to retire comfortably, even with the reduced benefit from Social Security, early retirement will be the quickest way to hang up your hat.

That said, as you mentioned, retiring at 62 does mean getting less from the government. Retirement age is between 66 and 67. For every year you retire early, they reduce your benefit by a percentage. Calling it at 62 means you’ll only get 70% of your primary insurance amount (that’s how much you’ll get in retirement benefits based on your average salary while you worked).

Getting SSDI takes longer — the average applicant takes two years to get approved — but it’s worth more money.

It gets calculated as if you’d already reached your full retirement age. So rather than getting the 70% you’d get with early retirement, you’d get 100%. And once you hit 67, your SSDI automatically converts to your full retirement benefit. That means you get that 100% amount in perpetuity. 

It’s also helpful to know that if you’re approved for SSDI, you’ll receive back pay. The way back pay is calculated is confusing (we did a deeper dive on back pay here). But in short, back pay is the money that the government should have been paying you while you waited to be approved. They pay you back for the months you spent waiting — so if you can afford to spend a few months waiting, SSDI still might be worth it. 

Will I get approved for SSDI if I apply?

To get SSDI in 2023, you need to have:

• Have worked and paid into Social Security enough to be eligible

• Have a qualifying disability

To check on that first point, create a my Social Security account. Once you do, you’ll confirm your eligibility. Plus, you’ll see how much per month you can expect if you get approved for SSDI. As a bonus, it’ll break down what those checks would look like if you decided to retire early instead.

You’ll also have to prove that you’re too sick to work, and that your condition will last a year or more. Working full-time will signal to the government you’re fine without benefits — so the fact that you’ve cut back on your hours will help. 

There are set medical requirements for each condition — your pain and your knee pain can be considered disabling, and are classified by the SSA as “musculoskeletal disorders.” We have a full write up of conditions that qualify for benefits, and a specific write up for back pain that you might want to peruse before moving forward. 

How much is SSDI worth if I’m approved?

The Social Security account you created earlier will give you this exact number. Generally, most people receiving SSDI get between $800 and $1,800 per month. The max amount you can get through SSDI is $3,627 monthly for 2023. The amount you’ll get depends on your work history. 

Again, once you hit retirement age, that SSDI amount converts to a retirement benefit of the same amount. In other words, if your claim for SSDI gets approved, the amount you get on a monthly basis stays the same into retirement.

A quick aside: SSI vs. early retirement

This might not apply to you, Ready to Rest, because you’ve been holding down a job. But if you’ve been making less than $943 a month, you might be able to get Supplemental Security Income (SSI). You can apply for it alongside SSDI.

In all likelihood, your SSDI check would be more than what you’d get for SSI. But if healthcare is important to you, once you leave work, it’s worth applying for both programs. There’s a waiting period to get Medicare for SSDI, and no waiting period to get Medicaid with SSI. 

Challenges you could face — and how to get help

If you have a qualifying disability, and enough money to get you through the application period, applying for SSDI will mean more money in your pocket than taking early retirement. We recommend that you either stop working entirely while you apply, or try to earn less than $250 per week.

A few other things that can help your case: First, make sure you’re seeing your doctor regularly for your pain. Your doctor’s diagnosis and prescribed treatment plan make a big difference when you’re applying for SSDI. While your doctor can’t put you on disability, their file on you can prove to the SSA that you do have a disability.

Second, work with a lawyer. A disability lawyer can help you complete the paperwork, navigate the process, and follow up with the SSA to ensure everything’s on track. 

To get free legal counsel and get connected to a lawyer who can help you, take our 2-minute intake quiz. Getting SSDI will be more work than taking retirement, but it means more money in your pocket. After years of hard —and it sounds like painful — work, you deserve that. 

All the best,

Atticus