Disability Retirement: 101
By Lucas Wapinsky
So people generally have concerns when applying for Disability Retirement. They can range anywhere from "how long will it take before receiving my benefit" to "what will my benefit amount be." Hopefully after reading this you will have a better understanding of what you are getting into when applying for Disability.
First we will start at the beginning. When debating if disability retirement is right for you there are a few things needed to know. How long it will take and what is the process. As far as how long it will take, that is going to vary a little bit on how cut and dry your case is. For most people I would recommend to expect it taking anywhere from 6 months to a year.
Now if you think that you would be able to wait that long then you are ready to start the process. The process is fairly simple but a little time consuming. In order to apply for your disability retirement you must first start with an application for social security disability. After the application is submitted to the social security office, then you are able to submit your application for disability retirement.
If you plan to continue to work while applying, you should expect your social security disability case to be rejected from the start because your income will be to high. If at anytime during the application process you separate from work, it might be advisable to reapply for social security disability because you may become eligible.
After you applications have been submitted then it is just a waiting game. Like I said before this can take up to a year to complete. For those out of work, there is a chance you can start receiving social security disabilities prior to your retirement benefits, which can help with the wait.
So now that you are waiting you need to know what you are waiting for. The calculations are fairly easy but something to know is your benefits will change during your retirement. First when you begin to receive your disability retirement income you will begin receiving 60% of your high-3 salary. After the first 12 months that will change to 40% of your high-3 salary. Then finally at age 62 your disability retirement income will change to a normal pension calculation of 1% of your high-3 salary for every year worked as well as every year on disability.
This income is also affected by your social security disability income. So if you never are approved for ssdi then above is what you recieve. If approved for ssdi then there is an offset of income based on what you receive from ssdi. The thing to remember is you will always receive the full amount of ssdi if approved and that your medical retirement income is what is being reduced. So for the first year while receiving 60% of your high-3 your benefit is reduced by the full amount of your ssdi. After that when your benefit is at 40% of your high-3 salary it will be reduced by 60% of your ssdi benefit. Then at 62 when disability retirement income will change to a normal pension calculation of 1% of your high-3 salary for every year worked as well as every year on disability, there will no longer be any other reductions.
Please remember to contact me if you ever have questions about this. There is a lot of information, and even more than what I can fit in this short post. If you are considering it, feel free to reach out for a free consultation, and I will let you know if it is something that could work for you based on financial well being and overall chances of approval.