- Allsup poll finds family and friends may be tapped out as go-to source for financial support.
Most financial experts advise to have at least six months of income in a rainy-day fund in case of an emergency or job loss. But even that isn't enough for someone unable to return to work due to a serious disability or illness, according to Allsup, a nationwide provider of Social Security disability representation and Medicare plan selection services.
A 20-year-old worker has about a three in 10 chance of suffering a disability before reaching retirement age, according to the Social Security Administration (SSA). More than 8.57 million people rely on Social Security Disability Insurance (SSDI) benefits because they are unable to work. However, the average monthly benefit was just $1,072, and the average time to be approved benefits for those appealing to the Appeals Council was more than two years in 2011.
"Many people underestimate the financial severity of a disability," said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. "With little savings of their own, they have to rely on others for support."
The Allsup Disability Finance poll for 2012 found that friends and family continued to be the leading resource for support while awaiting SSDI benefits. An Allsup Disability poll in 2010 was conducted on the same topic. However, 2012 poll results indicate that friends and family, along with credit options and charitable assistance, may be tapped out - forcing more people to sell personal items or raid their retirement savings.
Resources Tapped while Awaiting SSDI Benefits (June 2010 / April 2012)
Planning and Preparing For Disability
It's important for people to plan financially for a disability while they are still working, Gada said. This should include:
"If you are diagnosed with a chronic condition that will likely require you to stop working, you need to start planning for that day as soon as possible," Gada said. "You want to live life to the fullest, but you need to balance that with your future need for income."
Triaging Personal Finances when Disability Occurs
According to Gada, first steps people with serious health conditions or their caregivers should take include:
According to the Allsup Disability Finance poll, the most common assistance people used or considered while awaiting SSDI includes:
Pursue income sources, including SSDI and long-term disability.
Don't let healthcare coverage lapse.
"Unfortunately, people with disabilities don't have many good options for affordable healthcare coverage while waiting for Medicare eligibility," Gada said. "However, to the extent possible, keeping healthcare coverage should be a priority so they can continue to get the medical care they need."
About the Allsup Disability Finance Poll
The Allsup Disability Finance poll was conducted online on the Allsup website. Responses came from 178 individuals. The survey was completed in March 2012. Additional details on findings from the poll are available at www.allsup.com/Portals/4/allsup-finance-poll_april2012.pdf.
Find more resources for people with disabilities, and answers to questions about Social Security disability benefits at www.allsup.com or contact Allsup's Disability Evaluation Center at (800) 678-3276.
ABOUT ALLSUP - Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs more than 800 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis. For more information, go to www.Allsup.com or visit Allsup on Facebook at www.facebook.com/Allsupinc.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.