Life with a disability is full of challenges, not the least of which are financial. According to the National Financial Capability Study, people with disabilities are more likely to be unbanked, earn less than $35,000 a year, and have trouble paying their bills. While these short-term financial problems are troubling, perhaps the biggest financial obstacle facing most individuals is saving for the future. The struggle to balance planning for retirement and long-term care whilst also focusing on immediate financial needs is challenging to say the least.
However, even on a limited income, it's important to plan for the future. As one's needs become more costly and complex, individuals need to be prepared to pay for the care they need to age safely and in good health.
Here are just a few resources that may be able to help you along the way.
Maximizing Disability Benefits
Firstly, you aren't entirely on your own. While payments are modest, SSI and SSDI benefits ensure that those with disabilities have monthly income even if they can't work. In addition, Medicare and Medicaid provide health insurance to keep healthcare affordable.
Unfortunately, not everyone is aware of the benefits available to them, leading some to take early retirement under Social Security (rather than applying for SSDI) or struggling to pay healthcare bills out of pocket without realizing they qualify for Medicaid Buy-In.
Another misconception is that you can't work and receive benefits. In reality, there are several ways you can work and save while also receiving benefits. SSDI recipients can earn up to $1,260 a month (as of 2020) while still receiving benefits. While SSI reduces payments for beneficiaries with earned income, exclusions make it so those who do work come out ahead. Furthermore, those who qualify can save earnings in an ABLE account to keep countable assets below SSI and Medicaid limits.
Long-Term Care: Weighing the Options
No matter how diligently you save, the unfortunate reality is that many individuals won't be able to afford long-term care out-of-pocket. As a result, it's important to understand your long-term care benefits. While every state covers nursing home care under Medicaid, coverage for other care settings varies. Some states only cover in-home care, while others cover both in-home care and assisted living. While home care is the preferred option for many, it's not always the best choice. In addition to care costs, aging at home with a disability often requires extensive remodeling to accommodate growing accessibility needs (think wider doorframes, latch levers instead of knobs, a main bath on the lower floor, etc.). Assisted living facilities, on the other hand, are fully accessible and come with other amenities to make life easier, like meal services and on-site social activities.
In states where Medicaid-subsidized assisted living is available, it's important not to delay the search. Not every assisted living facility accepts Medicaid, and those that do often have waitlists. Starting the assisting living search well before it's needed – ideally in one's 50s – gives people with disabilities time to find a facility that meets their needs. If you need help finding the right place, take advantage of services like A Place for Mom, whose advisors work closely with different facilities throughout the United States.
The Importance of End-of-Life Planning
Paying for long-term care is perhaps the biggest financial hurdle, but it's not the final one. It's also necessary to plan for end-of-life matters. In addition to drafting core estate planning documents – including a will, advance directive, and powers of attourneys – think carefully about your final arrangements. It's not uncommon for people to pass away without funds for a funeral, leaving loved ones in the difficult position of either draining their own bank accounts or abandoning their loved one's remains.
When saving $10,000 or more for a funeral isn't feasible, turn to low-cost alternatives like burial insurance. Instead of paying cash for final arrangements, burial insurance allows the insured to make low monthly payments in exchange for benefits ranging from $5,000 to $20,000.
When it comes to planning for the future, the best thing you can do is research. The challenges of financial planning can look like complete impossibilities, which is why it is so important to understand the resources available to you. However, with these benefits and resources on your side, you can create a future that protects their own health and their family's financial well-being.
About the Author
Tanya Lee created AbilityVillage after watching her younger brother Charlie overcome obstacles associated with cerebral palsy. She wants to make the world a more accessible place for everyone.
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