What are the odds that you will become too sick or injured to work? Or that if such misfortune happens, it will cause significant financial strain for you and your family? Unfortunately, many people don’t face the uncomfortable truths about these questions. And it could cost them.
So, here’s a rundown.
Potential financial loss
Your income — when viewed over your entire career — is often your single most important asset. A permanent disability, therefore, can have a significant impact on you and your family. The figures below demonstrate the potential financial loss of future earnings if you were to become permanently disabled.
For example, a 35-year-old worker with an annual salary of $50,000 who experiences a permanent disability may lose up to $1,500,000 in potential earnings by age 65.
How much could a disability cost you? You can use our calculator to find out.
Causes of disabilities
It is not uncommon for people to assume that most disabilities are the result of accidents. In reality, the majority of disabilities people suffer are due to various forms of illness.
* Based exclusively on long-term disability (LTD) claims active during the 2017 calendar year. Source: Integrated Benefits Institute, Health and Productivity Benchmarking, 2017 Long Term Disability, September 11, 2018.
These statistics show that over the course of a person’s life, it is not uncommon for one to become disabled. What may come as a surprise to many is not only the causes of disabilities, but the potential financial loss associated with a permanent disability. Disabilities can occur at any time.
Educating yourself about these uncomfortable truths is a good place to start to help you reduce your own personal financial risk of becoming disabled. A financial professional can provide suggestions and guidance for implementing a plan. (Need a financial professional? Find one here)
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1 Social Security Administration, Fact Sheet, Disability.
2 American Payroll Association, “Getting Paid in America” Survey,” 2018.
3 Social Security Administration, “The Facts about Social Security’s Disability Program,” January 2019. Last data set available at time of publication.