Financial Planning with a Disability: How to Prepare for Future Care

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Guest article: Ed Cart from AbleFutures.org

People take part in financial planning for a variety of life scenarios, such as having a child, buying a home, or retirement. On the same note, as a person with a disability, this is a life scenario you must plan for to ensure you are able to adequately take care of yourself financially and afford the care you need. The following are a few ways you can start preparing now for whatever disability-related expenses the future may hold.

Understand Your Current Financial Situation

When creating a financial plan, the logical first step is to dig into your current financial status to determine not only how financially secure you are, but where changes (if any) can be made to increase savings. Map out your cash flow, including your source of income and where it ends up. Be sure to include any income received from disability insurance or government programs such as Social Security and Medicare. You may notice ways you can reduce spending such as eating out only twice a month or shopping around for a better rate on utilities.

Most importantly, you need to consider what disability-related expenses you may incur now or in the future. Will you need long-term care? If so, a private room at a nursing facility averages about $250 per day, or more than $7,700 per month. Will you need special equipment? Adaptive features like stair lifts can help you age in place, but you’ll need to plan for the one-time investment of $3,000 to $4,000 for a straight stair lift. The cost could be more if your stair design is more complicated or you need multiple lifts installed. Finally, what does insurance cover? Neither long-term care nor stair lifts are typically covered by Medicaid, Medicare, or private health insurance.

Include Family in Your Plan

It makes sense that one of the first steps in financial planning should involve how you will pay for your own care and expenses, but what about that of family members? Although it may be difficult to do, financial planning should include expenses not only while you are living, but also after you have passed. Consider investing in final expense insurance to help pay for expenses you incur or leave outstanding after you pass away, such as funeral costs or medical bills. Other ways to take care of your family financially after death include preparing/updating your will, appointing an executor for your estate, and taking steps to pay down any outstanding debts.

 

Be Patient with the Social Security Disability Insurance Process (SSDI)

 Work has plenty of benefits, including food on the table, the ability to pay bills, and overall financial security. However, the portion of your paycheck that goes toward FICA payroll taxes means you are eligible for SSDI and the accompanying benefits, which in 2018 averaged $1,197 per month. You may have heard horror stories about the lengthy application process, and even know someone whose application has been denied. According to Kiplinger, “the initial application can take three to six months to review, and the SSA approves only 1 in 3 initial applications.” For this reason, it is imperative that you create a budget and tap into any supplemental income sources while you wait to be approved for benefits. In addition, having a representative who knows the ins and outs is extremely helpful.

Once SSDI is Secured, Go For Medicare

It has likely been drilled in your head that Medicare eligibility starts at age 65, but this isn’t always the case. If you qualify for SSDI, you are eligible for Medicare. Unfortunately, it’s a lengthy waiting game. If approved for SSDI, your benefit payments won’t begin until you’ve been disabled for at least five months. In addition, once approved for SSDI, your Medicare coverage won’t start until two years have passed. However, if you can tough it out, you will be eligible for Medicare Part A, B, and D, which includes hospital stays, doctors visits, outpatient care, and prescription coverage. Medicare can be a confusing process, so if you have questions, check out this state-by-state guide. Simply click on your state to access websites and contact info for in-state organizations that can help you get all the information you need.

Financial planning is a task everyone should take part in, but when you have a disability, there are a few extra pieces. Start by assessing your financial situation and making plans for loved ones after you’re gone. Then, make sure you are taking advantage of disability-related assistance such as SSDI and Medicare to ensure you get the care you need when you need it.