Deciding Between Disability and Retirement Benefits Near Full Retirement Age

My sister-in-law turned 66 on August 15, 2022 and will reach full retirement age on December 15. She is currently in a residential Mental health facility but will be released tomorrow. She has not applied for Social Security benefits and the psychiatrist is telling her to apply for Social Security disability benefits. She has PTSD and is bipolar. She has not worked since May but has only been under psychiatric care for 3 weeks. They are currently telling her she can’t get a job at this point in time. Is there any benefit to her in applying for disability benefits or is it too late considering her full retirement age is in 3 weeks?

Given that your sister-in-law is just weeks away from reaching full retirement age (FRA) on December 15, 2022, applying for Social Security disability benefits may not provide a significant advantage. Disability benefits typically come with a five-month waiting period, meaning her disability benefits would only start in November, covering one month before automatically converting to regular retirement benefits at her FRA in December.

Considering this, she could instead apply directly for retirement benefits. If she applies now, she can start receiving retirement benefits as early as November, though they would be slightly reduced by 5/9ths of 1% for starting before FRA. Alternatively, she can wait until December to apply, ensuring she receives her full retirement benefit with no reduction.

Unless she has already initiated contact with Social Security before November, any retirement benefit cannot be retroactively applied to earlier months, making it more practical to begin retirement benefits directly rather than going through the process of applying for disability at this point.

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