If you are earning disability benefits, whether they are from supplemental security income (SSI) or social security disability insurance (SSDI), it’s important to understand the way that your current work situation may affect your future retirement plans. When you apply for and receive SSI or SSDI, it’s because your disability has impacted your ability to work and provide for yourself and your dependents. This could mean that you cannot work at all, or that you cannot work in the same capacity and earn the same amount of income that you were doing previously. However, this period in your life can impact the benefits that you receive once you retire, because showing that you worked less during your pre-retirement years can lead to reduced pension after you reach retirement age.
However, there is one way to avoid this negative effect – a disability freeze. This is a period of time when the your low (or no) disability earnings are not counted by the Social Security Administration, so your work record is essentially “frozen”. This means that you can maintain “insured status” while ensuring that your future SSA benefits, including upcoming disability payments or future retirement income, will not be affected by periods of disability-related unemployment.
Furthermore, some who are nearing retirement age and also suffering from a disability may consider filing for early retirement, but in this case, a disability freeze can actually be more beneficial. This affects people starting from around 62 years of age, who don’t think that they can work at all and would rather receive early retirement benefits instead of SSDI. However, early retirement while disabled will still be counted as a period of “low work record” when considering your future retirement benefits, while going on SSDI – and receiving a disability freeze – will not.
Most disability freezes are granted automatically when an individual receives SSDI benefits. However, if you are not currently receiving benefits but would still like to have a disability freeze (to ensure that this time period, affected by your disability, is not counted as “low earnings”), you need to file a request for the SSA to grant you this special status.