Monday Morning Quarter-Buck 04/16/2018: Let's Have the Disability Talk


“A hero is an ordinary individual who finds the strength to preserve and endure in spite of overwhelming obstacles.” – Christopher Reeve

As I was preparing for today’s blog, I came across the above quote.  No doubt, “Superman” was a hero to many of us, and not for the role he played in the movies, but for the role he played in life and the inspiration he gave to many.   In a million years, we would have never expected him to become disabled – he was Superman – how could that happen to him?  And if it could happen to him, then it’s likely it could happen to any of us.  It’s critical we talk about these issues.  No, it’s beyond critical.
Therefore, we are going to have the “disability talk.”  Where did I come up with this?  Well, this winter I re-read the book, “The Other Talk,” by Tim Prosch.  I love the way the book is introduced - “One of the most important conversations you have with your children is euphemistically called “the Talk,” the one about the birds and bees.  But there is another equally critical time in your kids’ lives when you need to sit them down and talk about the facts of life.  I call it “the Other Talk.” This time it’s not about the beginning of life. It’s about your last years of life…” 
I think there are several “talks” we, as financial planners, need to have with our clients.  Are they uncomfortable?  Um, would you say the birds and bees conversation was one that you looked forward to?  However, both are absolutely necessary to avoid potential financial disaster.
So today, we are going to have the “disability talk.”  According to the Social Security Administration, 1 in 4 of today’s 20-year old’s will become disabled before they retire.  Often my X and Y generation clients will come to me with concerns about having enough life insurance, but where I really see one of the biggest gaps is on the disability coverage side (especially teachers!).  I’ll share with them that if you are under the age of 45 you are far more likely to become disabled. 
Think it won’t happen to you?  Well, listen to my most recent Wine and Dime episode with Gretchen Caldwell.  Gretchen was in her mid-30’s and had to have heart surgery!  Gretchen is one of the many women that I think of as an amazing role model.  She took some major lemons and made some pretty sweet lemonade.
Although we hope and pray that a disability never actually hits us, a proper plan will help us deal with it if it does.  The Council for Disability Awareness has some great tools that will get you started, including a 5-Step planning process:

  1. Remember the “B” – word I mentioned back in the March 19th edition of Monday-Morning Quarter-Buck?  Yep, it’s necessary to bring this up yet again.  How do you plan for what you need if you don’t know what you spend?
  2. The council then recommends that you “adjust your expenses.” But not only should you consider expenses that you should cut, consider that household income might decrease, and expenses might increase.  For example, will your spouse or significant other have to take unpaid time to care for you?  What about your medical expenses, will they increase?  If you have to be off work for an extended period of time, does your employer continue covering your insurance IF you have disability coverage with them?  How do the premiums get paid?
  3. Speaking of your employer, do they offer short-term and/or long-term disability benefits?   Is there an elimination or waiting period in order to qualify for the benefit? Do you have to sign up for them and pay a little for them or are they simply an employer-sponsored benefit?  What amount of income will they give you? Will it be taxable or tax-free?  How long will it last?  Will this be sufficient?  Is it “own occupation” or “any occupation” coverage?  Should you consider a personal policy?  How do all the disability benefits co-mingle?
  4. FUND THE EMERGENCY FUND!  Okay, that’s one I added to the list, but I can’t say this with enough enthusiasm.  Sorry if it seems like I’m shouting but, this is something so many people overlook.  For example, what if you have to wait for a certain time in order to qualify for benefits – then it is important to have some reserves set aside to cover expenses during that time.  This is also especially important on the emotional front.  If a disability hits your household, there is enough going on emotionally, let alone worrying about how you are going to pay the bills.
  5. Of course, staying healthy is part of the battle.  I do not think doctors are honest enough these days.  One of my favorite books by Jean Chatzky and Dr. Michael Roizen is called “Age Proof: Living Longer Without Running Out of Money or Breaking a Hip,” really digs into this issue.  It’s a whole book about the connections between strong financial health and physical health. Don’t like to read?  Do an Audiobook trial and listen to it for free; it’s worth your time.
  6.  If you’ve read this far, GREAT!  Now, take action!  How? Of course, you can call me, but if you want to give it the old college try first – I recommend that you use the resources at the Council for Disability Awareness!  They have a great Personal Financial Security Plan worksheet that you can use to get started but don’t forget to relook at this annually.  I know it’s not exactly the most exciting thing in the world to think about, but remember last week’s blog – Don’t be a financial squirrel – get organized!