What Steps Have You Taken to Prepare for Disability?

​Think the chances of becoming disabled are slim? You’re not alone. According to the Council for Disability Awareness, American workers on average believe that they have only a 2 percent chance of suffering a disability during their career. The truth, though, is that the average worker has a 25 percent chance of missing work because of disability.1
 
Disability is caused by a variety of issues. You could be involved in an accident that leaves you with serious injuries. You could develop a serious illness, like cancer or heart disease. Chronic ailments, like back pain, could compound and force you to leave your career.

If you had to stop working because of health issues, how would that leave impact your finances? You might think you could rely on Social Security disability benefits. However, Social Security disability benefits are often capped and may not be sufficient to support your lifestyle.
 
Fortunately, there are steps you can take to protect yourself against the financial risk of disability. Below are three such steps you can implement today to minimize the disability threat:

Identify expenses that you can quickly cut.
 
One of the best ways to protect yourself against disability or any financial threat is to develop a budget so you can get a clear view into your spending habits. After you build your budget, identify spending categories that could be cut if you faced a financial crisis.
 
For instance, you might be able to cut back on certain discretionary spending items, like dining out, vacations and shopping. You could even look at larger spending items such as the cost of your home. You might consider downsizing to a smaller home that would have a lower mortgage payment and cost reduction for things like utilities, maintenance and more. Identify these areas in advance so you can immediately implement changes if a disability should occur.

Maintain emergency credit lines.
 
Debt can often play a serious role in one’s financial planning. However, there are some instances in which open credit could be useful. An emergency like disability might be one of those times. Although it may not be ideal to use debt to pay medical expenses or cover other bills, it’s possible that debt could be your only option in some instances.
 
Identify a credit tool you have available that could serve strictly as an emergency resource. For example, you might have a line of credit on your house. If possible, keep that line open so you can use it in an emergency if you have no other resources available. Perhaps find a low-interest credit card you could open and save strictly for emergencies.
 
Protect your income with disability insurance.

Finally, the best way to protect yourself against disability risk may be with disability insurance. A disability insurance policy pays you a monthly benefit if you are ever forced to leave work because of a physical ailment.
 
There are short-term policies that pay benefits for several months, and there are long-term policies that could pay benefits potentially all the way up to age 65. Disability insurance policies have a broad range of adjustable features, so you can create a policy that meets your needs and fits into your budget.
 
Ready to develop your disability protection plan? Let’s talk about it. Contact us today at J. Harris Financial. We can help you analyze your needs and create a strategy. Let’s connect soon and start the conversation.


1http://www.disabilitycanhappen.org/chances_disability/

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