Most of us need to financially plan ahead for an uncertain future that could include the need to save for special medical services and long-term care. These are expensive propositions that require a plan of attack, preparing, and saving well in advance.
For disabled individuals, the likelihood of long-term care means preparing for anticipated bills and special living expenses. Simply recognizing the need for advance planning won’t get you there — you must find a way to get started and keep saving, using assets and new sources of income to augment your safety net.
Review your present cost of living to get an accurate and realistic idea of what you need to save. Establishing a budget and assessing available assets are a good beginning, but bear in mind that financial advisors and estate attorneys will be able to shed light on options that you might be unaware of.
An accurate budget is indispensable for any kind of long-term financial planning because it gives you a good look at present income and expenditures. This way, you can determine where you can cut expenses and how much you can realistically save. Be honest with yourself when it comes to how much you can afford to set aside (your budget will help here).
Try easing into budgeting at first, so a sudden, precipitous drop in liquid income doesn’t overwhelm you. Consider whether you’re able to work or earn a steady income, whether you’re on a fixed income, and your monthly expenses and medical expenditures. After determining these factors, you can jump into the nuts and bolts of how to save for the future.
Pay yourself first
Before money heads out the door for bills and living expenses, set aside a certain amount each month in an interest-bearing savings account. Arrange for your money to be deposited into your account automatically, so there’s no risk it’ll end up somewhere else. If, as a disabled individual, you’re eligible for tax breaks, use these credits to help further your savings. And always set aside any unexpected monies that come your way, shop wisely, and be aware of how your employment may affect your disability benefits.
You’re considered covered under the Medicare system if you have eligibility and are enrolled in Medicare or Medicaid. Under the law, plans must cover treatment for pre-existing conditions from the first day of coverage, which applies to coverage through private plans, whether in Medicare, Medicaid or the marketplace. If you’ve paid Medicare taxes, you can factor in Medicare premiums later in life. For example, if you paid Medicare taxes for 30 to 39 business quarters, your 2019 Medicare Part A premium would be $240 per month, and $437 monthly if you worked less than 30 quarters.
If you’re unable to continue working, there are plans that can help you take advantage of benefits such as disability insurance and sick pay. Review your former employer’s rules so you fully understand your options. You could be eligible for Social Security disability or Workers Compensation benefits.
Guard your wealth
Beware of scams and fraudulent tricks designed to get at your hard-earned and diligently saved wealth. Disregard offers that ask for money with the “promise” of more money coming your way later on. It’s almost always a scam. And watch out for dubious-sounding investment opportunities. Remember, your long-term financial savings are far too valuable to put at risk.
If you have any questions or uncertainties when it comes to long-term financial planning, consider meeting with a financial expert who can help you weed through the rules and regulations governing disability benefits and how your assets and employment earnings impact those benefits. Be careful about how much you set aside (this should always be a manageable, realistic amount). And always guard your savings with the greatest care.
Author Bio: Jim McKinley is a retired banker who enjoys helping people make the most of their hard-earned money. He runs the Money With Jim blog to provide readers of all ages with information on budgeting, first time home buying, savings, and insights on a number of financial topics. Learn more about Jim here.