May 16, 2017
Are you Prepared for a Sudden Loss of Income?
May is Disability Insurance Awareness Month (DIAM), and we want our clients, friends, and family members to be educated about disability statistics in America and the importance of disability insurance. Disability Insurance Awareness Month is the perfect time to learn the facts about how likely you truly are to become disabled and to ensure that you and your family are prepared for an unexpected illness or injury, as this knowledge could be critical to your family’s financial future. This year, the Council for Disability Awareness (CDA) is focusing their DIAM campaign around the millennial generation (individuals born between 1980- approximately 2002), and they are specifically focusing on millennials at two key stages of life: younger individuals recently graduated from college/beginning careers, and slightly older men and women who are starting to hit major milestones like marriage, parenthood, etc.
This is significant because many people, old and young alike, are unaware of the actual likelihood that they will become disabled and be unable to work for at least one year at some point in their career. It may surprise you to learn that the Social Security Administration has found that over 1 in 4 of today’s 20 year-olds will become disabled before they retire. Unfortunately, many of us are completely unprepared for the financial and physical stress that disabilities can potentially bring because we assume that our current health will last, or we don’t think that we will become part of statistics like this. This becomes even more concerning when you look as the results of a 2010 study done by the Council for Disability Awareness (CDA), which found that 90 percent of American workers rated their ability to earn an income as valuable or very valuable in their long-term financial security–yet they do not have a plan in place to protect it should a disability occur.
Amongst the millennial generation these issues are even more prevalent, since the younger you are, the less you tend to think about things like retirement and disability—both of which often get falsely associated with old age. As more millennials are beginning to age into adulthood, this trend could begin to impact future SSDI claims as well. The Advocator Group has helped nearly 3,500 millennials obtain SSDI benefits, and as years go by and this generation enters their forties, disabling conditions (particularly illnesses) will become even more common. Many of them will start to depend on financial assistance from benefits like SSDI, but they will not be financially prepared to wait through the application process (which can range anywhere from 3 months to 3-4 years in length) with no supplemental income or savings.
The CDA has compiled some insightful statistics and helpful tips about financial planning, paycheck protection, and disability insurance for millennials in particular, but these insights hold tremendous value for all ages. There is also an infographic on this page with some shocking statistics about how long the average American is prepared to be without income, and we hope that sharing this information with you can inspire you to examine how you and your family manage your finances now, or how you think about the future. Even if you don’t have the means to save 5-10% of your income right now, maybe you can start with a smaller amount, or you can create a budget and find ways to save money, or ask for advice from a financial planner to prioritize your debts/expenses. Even the smallest step you take toward protecting your financial future is a step in the right direction!
Nothing in this post is intended as advice or a suggestion to elect or not elect to claim benefits of any kind, including Social Security benefits, nor is it intended as financial advice in any way. The decision to claim benefits is a personal one that is contingent upon each individual’s unique circumstances.