Retirement Pay at Risk: Avoid This Costly Disability Claim Mistake

Retirement is a time for peace and financial security. What if one mistake on your disability claim can threaten your retirement income entirely?

For millions of Americans counting on Social Security Disability Insurance (SSDI), VA disability compensation, or other retirement-based government benefits, an inattentive mistake during the claiming process translates to smaller or completely denied payments—now and in the future.

In this guide, we explain the biggest disability claim error that affects your retirement benefits, how to avoid it, and how to fix it if you’ve already made the error.

The Big Blunder: Requesting Disability Without Synchronizing with Retirement Benefits

The most common and costly error?

Failure to synchronize your disability claim with your retirement benefits.

Here’s what typically happens:

• They receive SSDI or VA disability benefits close to retirement age (typically at 60 or older).
• They fail to disclose that they are also receiving or applying for Social Security retirement or early retirement benefits.
• Or, they switch to early retirement at age 62 without understanding its impact on disability eligibility and on benefit level.

Why This Is a Major Problem

1. Your SSDI or Disability Claim Can Be Denied

If the Social Security Administration (SSA) thinks you’re already retired, it may deny your disability claim, assuming you’re no longer “substantial gainful activity.”

2. Lower Monthly Payments

When you get SSDI after starting early retirement, your total monthly benefit can be lowered forever, as SSA will not provide a retroactive boost in your amount.

3. Lower Lifetime Earnings for Retirement

A disapproved disability claim costs you retroactive disability benefits, and this can cut your overall retirement benefit calculation a great deal.

Who’s Most at Risk?

• People age 60–65 considering early retirement
• Veterans who file for VA disability but also file for retirement benefits
• Disabled workers unaware of SSA coordination rules
• Survivors/Widows/Widowers filing for survivor and disability benefits
• Low-income or part-time workers who transition to early Social Security

Real-Life Scenario: Janet’s Mistake

Janet, 62, quit her job because of severe back issues. Rather than applying for SSDI, she applied for early Social Security retirement benefits to keep from waiting.

Several months later, a lawyer encouraged her to apply for disability. She was approved—but since she had already started drawing early retirement, her monthly disability payment was cut and she lost thousands in back pay.

If she had first applied for SSDI, she would have been able to receive full disability pay, and later transition to full retirement pay at age 66–67 penalty-free.

How to Avoid This Mistake

1. Always File for SSDI First If You Are Under Full Retirement Age

• If you are aged 62–66 (depending on your birth date), filing SSDI first preserves your full benefit amount.
• SSDI turns to retirement automatically at full retirement age—no benefits lost.

2. Don’t Take Early Retirement Before You Find Out SSDI Outcome

• Reting first could lock up a smaller amount.
• Consider waiting until SSDI approval.

3. Report All Income and Applications

• Notify SSA or VA if requesting any other benefit.
• Not reporting can lead to conflict, overpayment, or denial.

4. Take Guidance from a Disability Advocate or Lawyer

• Especially helpful for veterans and older employees.
• Legal help can prevent costly blunders and delays.

Impact on Retirement Planning

The incorrect step on your disability claim could cost you:

Scenario	Outcome

SSDI before retirement

Full monthly benefit preserved

Retirement before SSDI

Lower monthly benefit & missed back pay

VA disability + SSA retirement

Possible offsets unless coordinated

Coordinated filing

Maximum benefit with minimal penalties

What If You’ve Already Made the Blunder?

Don’t give up hope. Here’s what you can do:

1. Appeal or Reopen Your Disability Claim

• If rejected, request reconsideration or hearing.
• Provide complete medical records and benefit history.

2. Request a Benefit Recalculation

• SSA can recompute benefits if errors were committed in processing.

3. Obtain a Claims Specialist

• SSDI or VA disability experts can straighten it out.

Pro Tips for Future Applicants

• Maintain a disability notebook – note doctor appointments, work limitations, and symptoms.
• Learn about your “full retirement age” – sometimes it’s different than 65.
• Request a copy of your SSA earnings record – errors will lower your pay.
• Check medical certifications and dates on forms twice.

FAQ’s