Can I apply for Social Security disability benefits at age 64 or 65?

Question: I was laid off at age 63 and haven’t been able to find work since then due to a bad back, diabetes, bursitis of the knee, and carpal tunnel in both wrists. Can I apply for Social Security disability? I haven’t needed to apply for retirement benefits because I was collecting unemployment benefits.

Answer: You can’t apply for Social Security disability if you have already reached full retirement age, which is currently 66. But until that time, if you are disabled according to Social Security definition, you can either collect Social Security disability or retirement benefits (but not both).

There is a common misunderstanding that you have to be under 65 to collect Social Security disability, but it isn’t true. In fact, it can be easier for those over 65 to get disability benefits, thanks to some special rules. For instance, Social Security examiners and judges must actively look for age-related impairments, such as hearing or memory loss, even if they are not mentioned on your application. In addition, Social Security is less likely to deny you because your condition might not last 12 months, since medical conditions are less likely to resolve themselves quickly after you reach age 65. (Also note that, if you have low income and assets, you can qualify automatically for SSI when you’re 65, without having to prove you’re disabled.)

There are several advantages to applying for disability benefits before you reach full retirement age, even if you are close to it. First, the amount you’ll receive for disability is higher than what you’d receive for early retirement. If you can qualify for disability benefits, you can essentially receive your full retirement amount before reaching full retirement age (the disability benefit equals your full retirement amount).

Second, you will avoid Social Security’s early retirement penalty. For people with disabilities, Social Security disability insurance is like an early retirement program without the penalty for collecting benefits early. If you aren’t familiar with it, the early retirement penalty will lower your current and future retirement benefits whenever you collect retirement benefits before age 66. If you collect retirement benefits at age 63, for example, your benefits will be reduced about 20% for the rest of your life.

Third, the years you have been unable to work due to disability, or unable to work at your full potential, won’t be included in the calculation of your normal retirement benefit. This can lead to a higher retirement benefit, but it’s true only if Social Security finds you officially disabled.

Because it can take years to get a decision on disability benefits, some folks apply for early retirement benefits and Social Security disability benefits at the same time. This is perfectly okay with Social Security, and allows you to collect your retirement benefits while waiting (sometimes up to a year or two) for a decision on your disability application.

If you are later approved for disability benefits, you’ll start receiving disability benefits rather than early retirement benefits. And if Social Security finds that you were disabled the whole time you were collecting early retirement benefits, it will pay you the difference in benefit amounts for those months. If you’re still collecting disability benefits when you turn 66, they will automatically be converted to retirement benefits. In addition, your future retirement benefits won’t be reduced for collecting earlier retirement, since you should have been receiving disability benefits.

However, there’s no guarantee you’ll be found disabled if you apply for both disability and retirement. If you are denied, you’ll be stuck collecting early retirement benefits and your full retirement age benefit will be permanently reduced due to collecting early retirement. Of course, if you need the money, you may be comforted by the fact that the closer you are to retirement age, the less the penalty is (if you’re 65, the penalty is only 6.67%).

Lastly, you mentioned you were collecting unemployment benefits. If you still are, this may raise an issue with Social Security regarding whether you’re disabled. I’ll address this in the next post.