I turned 62 on June 29, 2016. I have prepared my on-line request for SS and SSDI. I was injured in an auto accident in 2012. I was terminated from my job June 30, 2015. Due to my disability I have not been able to work full-time. I am ready to file for early retirement at a rate of $1,673/month and if I receive the disability I will receive $2,231/month. Using my calculations just for the early retirement vs waiting to age 66 or 70 based todays monthly benefits without any cost of live and multiplied by a 4% investment rate the following results were found: Based on life expectancy of age 90:

Age 62 accumulation $1,001,000 age 66 $1,040,000 age 70 $1,041,000

I feel that it makes sense to file today for early retirement and for SSDI at the same time. Do you agree?

Thank you, Tim

Hi Tim,

You should not be making ANY calculations based on life expectancy. You are not going to die on time, i.e., at your life expectancy. To figure out the value of your benefits under any collection strategy, given lifespan uncertainly, you need to form the discounted present value of what you'll received in all future years right up to your maximum age of life. That's why our software asks our users about their maximum, not their expected age of life

Do not file for your retirement benefit and your disability benefit. File just for your disability benefit. The amount you get will be the same as your full retirement benefit. If you file for your retirement benefit and disability benefit at 62, you'll get your reduced retirement benefit plus your excess disability benefit. This excess disability benefit will equal your disability benefit (again, equal in amount to your full retirement benefit) less your reduced (because you took it early) retirement benefit.

The total amount will be the same as if you just applied for your disability benefit, BUT, if at full retirement age, when your disability benefit ends and you just receive retirement benefits and you choose to suspend your retirement benefit and restart it at a roughly 32 percent higher value, Social Security will suspend your reduced, not your full retirement benefit if you took your retirement benefit early. As a result, your age-70 benefit when you restart your retirement benefit will be larger by roughly 32 percent of your age-62 retirement benefit, not roughly 32 percent of your full retirement benefit.

The difference between these two age 70 amounts would be 25 percent. I.e., filing for your retirement benefit now could cost you 25 percent of every dollar you receive from Social Security from age 70 on.

In general, you don't want to ask Social Security for more than one benefit at a time.

best, Larry