Michigan lawyer discusses workers’ comp settlement and retirement options.
Many of our clients want to retire while on workman’s comp benefits. This is a natural reaction because illness or injury often prevents them from continuing in their careers. Retirement is supposed to be a reward for a lifetime of hard work, but it often turns into a financial necessity. Here is some information about workers’ comp settlement and retirement. Please remember that every case is different, so it is a good idea to speak with a lawyer about your own individual situation before acting.
Employees can trade workman’s comp benefits for a cash payout. This money can be used for any purpose including paying off debt, getting additional medical treatment, education, or retirement. The amount paid is going to depend upon length of disability and future medical needs. Watch out for insurance companies who use retirement to offer a low ball amounts.
Will quitting my job impact a workers’ comp settlement and retirement?
Employees who quit their jobs are considered to have removed themselves from the labor market. This means workman’s comp benefits can be stopped by the insurance company and the value of any payout goes way down. Most employers do not bring people back to work with restrictions and getting terminated for this reason is much better for a case. We do not recommend quitting a job unless a payout has already been negotiated.
Can I get a workers’ comp settlement and retirement pension?
Employees who get a workers’ comp settlement can also get a retirement or disability pension when available. However, the insurance company can sometimes use coordination to reduce what it must pay for benefits. This could even be a dollar-for-dollar offset. It is important to find out about any pension consequences before accepting a workman’s comp payout. Speak with the pension administrator or a union representative to find out what is available.
Can I take money out of my 401K or IRA?
Employees can take money out of their 401K or other retirement accounts in accordance with federal law. However, the insurance company might try to coordinate these disbursements to the extent the employer made contributions to a pension plan and it was rolled over into a retirement account. This means a person could lose out on workman’s comp benefits just because they took money from a retirement account. It is very important to speak with a lawyer about options before acting.
Is there an offset with a workers’ comp settlement and Social Security retirement benefits?
Employees who are receiving workman’s comp benefits can apply for Social Security retirement benefits. However, they could see a reduction in benefits. This reduction will equal 50% of the total monthly amount paid by the Social Security Administration. This could end up wiping out all benefits and reducing the amount of any potential payout.
Watch out for insurance companies who coordinate both Social Security retirement benefits and take a credit for old age (65+). Insurance companies can only choose one method of coordination and they frequently try to double dip. We recommend trying to negotiate a payout before retirement benefits start.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.