By Ed Carter
Saving for retirement and long-term care in the future can be a daunting task for anyone. When you’re young, these concerns seem very far off, but as you get older, you realize just how important it is to prepare your finances for the future.
For people with disabilities, figuring out how to afford the care they will need can be challenging. The benefits system can be difficult to navigate, they will likely have to be ready for higher healthcare costs, and they might not be able to save as much as they would like on a monthly basis.
Despite these obstacles, people with disabilities can still take important steps to protect their finances and get the care they will need as they get older. If you or a loved one has a disability, here are a few tips to help you plan for your financial future.
People with disabilities may find that working with an experienced financial advisor
is necessary. You will likely have different concerns about the market and your portfolio. For example, risky investments would definitely be ill-advised, and you would generally be instructed to take a more conservative approach to investing and saving for retirement. After all, you will need more cash on hand than the average person in order to cover unexpected medical expenses that could pop up at any time.
Plus, you’re not just getting ready for retirement expenses - you may need long-term, supportive care
well before the typical retirement age. Simply put, your usual monthly budget will be unique to your situation, so your financial advisor should understand that your portfolio will be unique as well.
Apply for Benefits
If you were recently diagnosed with a disability, you may not be aware of the benefits that you can apply for. It’s in your best interest to research all of your options and apply for any financial benefits for which you’re eligible. For example, you may qualify for a combination of Social Security Disability Insurance (SSDI) and Medicare
, or you might be able to sign up for Supplemental Security Income (SSI) and Medicaid
According to Fool
, if you are denied these benefits, you may be able to request an appeal and apply again, so don’t get discouraged right away.
When people think about getting their finances ready for retirement, they often forget to factor in end-of-life costs, like funeral expenses and medical bills that may end up their family’s responsibility to pay after they pass away.
Burial insurance is a smart purchase for everyone. Many people do not realize just how expensive funerals can be, and burial insurance can help your loved ones cover the costs. Before taking out a policy, consider what you want it to cover. For example, you may want to invest in a plan
that will cover bills and debts
in addition to funeral expenses.
If you have a disability, you might be able to open an ABLE Account, which is a very useful savings vehicle. According to Consumer Reports, you can open an ABLE account
if you were diagnosed with a disability before the age of 26.
While contributions to your ABLE account will be taxed, you won’t pay taxes on growth or future withdrawals. You can contribute up to $15,000 per year, and you will not have benefits suspended unless your account reaches $100,000.
When it comes to saving for retirement and future healthcare needs, people with disabilities will need to be proactive. Thankfully, they have more savings and investing options than ever before. By working with a savvy financial advisor who can help them access the benefits they need and properly invest their own income, they can enjoy a more secure future.