People with disabilities are more likely to be on a low-income budget than the rest of the population. With almost one in five low-income earners admitting to not setting financial goals for their households, it is easy to see how people with disabilities can struggle to protect themselves financially as they grow older. It may feel like there is nothing to be done about this, but there are actually quite a few resources available to people with disabilities to help them plan a financially secure future. Below are just a few of them.
Although Medicare is usually thought of as health insurance for seniors, people under 65 with disabilities can get coverage. If you qualify, you will automatically be enrolled in Parts A and B, and coverage will usually start after you have received 24 months of disability payments.
Parts A and B often do not provide enough coverage for most people, so it is common to buy a Medicare Advantage policy, and many insurers offer Special Needs Plans.
Medicare is not entirely free — there are premiums and high deductibles. If you don’t think you can afford these costs, know that you can qualify for both Medicare and Medicaid at the same time. This can cover some of your premiums and make Medicare more affordable. Bear in mind that even if you aren’t eligible for Medicaid now, you may become so when you get older.
Others Forms of Insurance
While Medicare provides health insurance for people with disabilities, there are other forms of insurance that could be useful. For example, a whole life insurance policy can be an incredibly useful financial tool, as long as you can afford to pay $40 to $150 a month into one. This is because it accumulates cash value, meaning you can borrow or take money from the money you accumulate, like a form of tax-free savings account.
If you are scared of the expenses you could leave behind for your loved ones, you should consider investing in burial insurance. According to Lincoln Heritage, this is usually used to pay for expenses like funeral costs, medical bills, and other debts.
If a loved one dies and leaves you a lump sum of money, this could affect your ability to receive Social Security and other forms of government assistance. In this case, they should set up a special needs trust instead. The money is then managed by a trustee or, in the case of a pooled trust, by a not-for-profit organization. According to Nolo.com, special needs trusts are often used to pay for personal care, out-of-pocket medical expenses, education, rehabilitation, and more.
You can get even more from your special needs trust if you turn it into a qualified disability trust. The main benefit of this is tax-related. QDTs are eligible for an exemption of at least $4,150, which is far more than most trusts. The process of converting a trust to a QDT is a complex one, so make sure to ask your estate planner if this is for you.
Budgeting and Saving
As of 2017, people with disabilities who receive benefits can save without it impacting their income, thanks to ABLE accounts. These accounts allow a person to build up to $100,000 in savings without impacting SSI or Medicaid support. The accounts differ by state, but some states allow outside residents, so the best deal for you might be in another state.
When you are dealing with difficulty finding and maintaining a job, high medical costs, and a lack of accessible resources, it can be difficult to feel any sort of motivation to plan for a financial future. However, it is important for people with disabilities to know that there are resources out there to help them. Taking the time to go over these and plan a strategy could make all the difference as you grow older and your care needs begin to change.
About the Contributor | Martin Block co-created Able Rise, a site that is focused on providing people with disabilities and their loved ones a supportive space while educating those without disabilities about what it’s like to live in an inaccessible world.