Does Disability Pay More Than Social Security?

Applying for disability benefits has a reputation as a time-consuming and inefficient process. Consequently, many people entering their 60s who could potentially qualify for disability benefits may opt to just elect for Social Security a couple of years early to avoid the hassle. However, this strategy has the potential to cost you a lot of money in the long run. Whether opting for disability will be the more beneficial strategy depends on your age. A financial advisor can help you weigh the best options for your retirement goals. 

How Much Does Disability Pay?

Disability benefits in the U.S. typically refer to payments from Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).

SSDI is available to individuals who have worked and paid into Social Security but can no longer work due to a qualifying disability. The amount SSDI pays depends on a person’s average lifetime earnings before becoming disabled.

SSI, on the other hand, is a need-based program for individuals with limited income and resources, regardless of work history.

The maximum SSI payment in 2025 is set at $967 per month. However, the average monthly SSI payment for all recipients in January 2025 was just $714. Meanwhile, the average SSDI benefit was more than twice as much – $1,439 – according to the Social Security Administration.

How Much Does Social Security Pay?

Social Security retirement benefits are determined by an individual’s earnings history and the age at which they choose to begin receiving benefits. As of January 2025, the average monthly benefit for retired workers is approximately $1,978.

The amount you receive varies based on your retirement age. If you retire at the full retirement age in 2025, the maximum benefit is $4,018 per month. Choosing early retirement at age 62 reduces the maximum benefit to $2,831 monthly. Conversely, delaying retirement until age 70 increases the maximum benefit to $5,108 per month.

Calculating Your Social Security Benefit Amount

The formula for calculating your Social Security benefits and your disability benefits is exactly the same right up until the very end. We’ll get into how it diverges in the next section, but for now, we’ll focus on the shared process.

The first step is calculating your average indexed monthly earnings (AIME). The Social Security Administration (SSA) will consider your 35 highest-earning years. For each of those years, it will index your income for inflation and include it up to the taxable maximum (the point at which you stop paying Social Security taxes). For the tax year 2025, this point is $176,100 (up from $168,600 in 2024).

Next, the SSA will add up these totals and divide them to get your AIME. If you have more than 35 earning years, your lowest-earning years will be excluded. If you have fewer than 35 earning years, the SSA will include a $0 in the calculation for every year you’re short.

The last step is to calculate your primary insurance amount (PIA) from your AIME. To calculate your PIA, the SSA will take a percentage of three different chunks of your AIME. The exact amount of these portions will differ slightly depending on the year you become disabled or turn 62.

When Does Disability Pay More Than Social Security?

Your PIA is the amount you’d receive if you were to qualify for disability benefits. It’s not that simple with Social Security benefits, however. While you’re technically eligible to begin taking Social Security benefits at age 62, you won’t receive your PIA until your full retirement age (FRA), which will fall somewhere between 66 and 67. For example, a person whose FRA is 67 would only receive 70% of their PIA if they claimed their benefit at age 62.

Full Retirement Age

This means that between 62 and your FRA, your disability benefit would be higher. And there’s an additional benefit to taking disability: By electing for disability instead of Social Security, you allow your Social Security benefit to continue growing.

When Does Social Security Pay More Than Disability?

Social Security retirement benefits can surpass disability benefits once you reach your full retirement age (FRA). At that point, all disability payments convert to standard retirement benefits.

Additionally, delaying Social Security past your FRA results in increased monthly benefits due to delayed retirement credits. These credits increase your benefit by 0.67% for each month you wait beyond your FRA, up to age 70. By delaying benefits, you can receive a maximum increase of 24% over your full retirement amount.

Consider a hypothetical scenario: You are eligible for SSDI at age 60, with a monthly disability payment of $2,000. Your FRA is 67, at which point you could start receiving a full Social Security retirement benefit of $2,500 per month. If you’re able to continue working and delay benefits until age 70, your retirement benefit would increase by 24%, reaching $3,100 per month.

Bottom Line

It’s easy to get lost in all the different acronyms and calculations that come along with Social Security benefits. However, if you’re wondering if disability would pay more, just ask yourself where you are relative to your full retirement age. If you’re under it, disability will be higher. If you’re above it, Social Security will be higher. Just like with any other Social Security issue, the way you can optimize your experience is by thoroughly understanding all of your options.

Tips for Navigating Social Security

• A financial advisor can help you account for the various sources of retirement income, including Social Security benefits. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• If you’re applying for Social Security disability benefits, you’ll need to fill out form SSA-827. This provides your consent for the SSA and Disability Determination Services (DDS) to view your medical records.
• Dealing with a disability, either temporary or permanent, is hard enough without considering the financial impact. Having an emergency fund in place for unpredictable things like this can be a huge relief.

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