12 Jul Am I due a higher benefit from Social Security after injury?

Q. I was working and injured my back and had to stop working at age 60. I was getting Supplemental Security Income (SSI). In the end I was awarded total disability one month before I turned 62. hday. On my birthday, Social Security told me I had to take early retirement, so I thought I would be put on Social Security Disability Insurance (SSDI) but instead they forgot all about the disability and said I would get $1,174 a month from Social Security. I feel I was cheated out of SSDI. What do you think?
— Confused

A. For starters, the details of everyone’s claim are very specific based on their personal circumstances.

If you haven’t done it already, you should speak with someone at Social Security to better understand that decision.

Your SSDI benefits are based on your lifetime covered earnings, said Jeanne Kane, a certified financial planner with JFL Total Wealth Management in Boonton.

These are the earnings that you paid Social Security taxes on up until you became disabled, she said.

Certain other benefits can shrink your SSDI benefit, she said. These include worker’s compensation, public disability benefits and pensions based on work not covered by Social Security, such as a government or foreign government pension.

In your case, Kane said, you were injured on the job.

“Are you receiving workman’s compensation another public disability benefit?” she said. “If so, this could reduce your SSDI benefit to where it makes more sense financially for you to take early social security retirement benefits.”

Kane noted that your Social Security retirement benefits are also based on your lifetime covered earnings.

You receive the full benefit at your full retirement age (FRA). FRA for people born in 1955 is 66 and two months. It gradually increases so anyone born 1960 or later.

If you file sooner than full retirement age, you receive a lower benefit, she said.

“In general, we recommend that people wait as long as possible to claim Social Security retirement benefits,” she said. “If you claim early, your benefit can be permanently reduced by as much as 30% versus what you would have received at your FRA.”

For example, a 30% reduction will turn your $1,200 per month benefit into only $840 per month, she said.

“You’ve paid into both the SSDI and SSA retirement benefit programs while working so you deserve to get the most available to you,” she said.

So again, contact Social Security to get the details on what benefits you’re eligible for.

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This story was originally published in July 12, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.