living expense savings

Can You Stay Financially Healthy on Disability?

October 29, 2014

     If you become disabled due to injury or illness, it’s likely that your biggest worry apart from your health is how you will survive financially. This is particularly worrisome to those that are single, the primary breadwinners for their family and people who expect to recover slowly from their illnesses. It’s hard to know sometimes how long your illness will last. Statistically, most disabling illnesses or injuries last less than 12 months, which is still a long time to sustain financially if you cannot work. The key to staying afloat financially when you’re disabled is to take advantage of all sources of income available to you and to reduce expenses where possible.

     “For most of our clients, I recommend having at least six months’ worth of living expenses saved as your cash reserve, which can be used to cover the income loss of a short term disability. Additionally, purchasing long term disability (LTD) insurance is key to having ample long term income replacement should you suffer a long term illness. Be sure to use after-tax dollars to pay LTD insurance premiums in order to receive benefits tax free,” said Jordan Nightingale, CFP® at HFG Wealth Management.