I Might Become Disabled. How Do I Protect My Family's Finances Now?

Speaker A00:00:37

You're doing the math at midnight, not if the job goes away. But when you work in healthcare, you've seen this disease move before, but now you're the one watching the clock.Stay with me today because we're gonna build a plan when you still have time to build one. Gonna be a very interesting episode today. Hello and welcome to Financially Confident Christian.I'm Ralph Estep Jr. We got a really interesting question. Today we're going to talk about planning your finances around a health diagnosis that you didn't choose.Today we're going to talk about a progressive autoimmune disease and a disability that's likely in the next decade. And this listener wants to find out how to protect their family.Now, it's that fear of sitting with paperwork at the kitchen table just wondering how you pay for things that you use to handle without thinking. And maybe you're going through a tough time as well. And you've got a question for me. I'd love to hear your question.You can get me by going to financiallyconfidentchristian.com/question We'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/question Let's get right to our listener email.Now today I want to read the email subject line. So when I got this email, I saw it in the subject line, it says, likely to become disabled in the next decade due to a progressive disease.What steps can I take now to protect my assets? Man, when I saw that, I'm like, I gotta get into this one. But this is what they wrote. Hi, Ralph.As the title says, I may become disabled in the next decade because of a progressive autoimmune disease. I'm in the US And I'm honestly pretty scared about what this means for my family financially. I'm in my early 40s. I work in health care.And right now I've got good insurance through my job. But I know that's not going to last once the disease moves further along. I still help out my kids, my adult kids financially.Nothing huge, but it adds up. I know I should be planning ahead instead of just hoping it doesn't get bad, but I don't even know where to start.What steps can I take now to protect my family's financial future and in light of my disease? Thank you.Well, first of all, thank you so much for sharing that very sincere and deep question and what you're really getting at today and what the big point of today is.We want to talk about how to build that safety net, while you still have things that you have, your income, your health insurance, and yes, maybe even your full legal capacity. Because all three of those things are going to get harder as this disease progresses. So let's get into some specific things.Number one thing you're going to do if you listen to the show the other day, we talked about legal topics. I am not an attorney, and I don't play one on tv. But the first thing you've got to do is you've got to lock in the legal documents right now.And I can't only imagine getting that diagnosis. And you work in healthcare, so you know what this looks like. And the thought of doing these things feels morbid, but you got to put that aside.It's actually the most loving thing that you can make. The most loving thing you can do. You got to really focus in on three documents. That's your durable power of attorney for your finances.That's so you can have someone you trust act if you can't. The next two things are what's called a health care power of attorney or a living will.That's where you get to make the decisions about what happens to your life. It's no longer guesswork, but all of these things are only valid when you have the full legal capacity at signing time.And that's why this is so important. And an attorney can draft all three of those things. The will, the durable power of attorney, and that living will.And it's not going to cost you only a few hundred dollars. The best time to sign these papers and put these papers together is before you need them, once you need them.Unfortunately, in this type of situation, it'll be too late. So that's the immediate thing. Go meet with an attorney, get your legal documents in place. I will share a personal story.As I've shared on the show, my mother passed away now three years ago. One of the saving graces of that thing was that my mother had that living will. And in her living will, she was very specific. She.She said, if a doctor says that I am not going to make it, I do not want my life sustained. And when my mother had brain cancer and the surgery didn't go well, the doctor said to us, he said, listen.He said to my sister and I, he said, listen, your mom's never going to survive from this. And it was so reassuring, it was so great that my mom had already put into place what she wanted.So that's why even my mom had no capacity to make that decision at that point. But because she had the love of putting that in place. It put my sister and I in a much easier situation.So if you do nothing else today, go put your legal documents in order. I know it feels morbid, but do it now while you can. But the second thing I want to talk about is let's talk about that disability income.Because one of the things you've alluded to is you said, ralph, I'm worried about sitting at that kitchen table and wondering, how am I going to pay for things? This is a great time to go and talk to your HR persons and understand what that's going to look like.Understand terms like the elimination period, understand the benefit percentage. Now, truth be told, most long term disability only replaces about 60% of your income. So let's do some math.If you're making $70,000 right now, that's going to be a $28,000 gap. Once you can't work anymore, that's when you need to look at individual disability insurance while you still medically qualify.See, right now you've just got that diagnosis. You're still going to qualify from some additional policies. Each of these things have different timelines and different rules.You got to understand the short term disability of this, the long term disability, and then what we call the Social Security disability.The thing you need to understand as I prepared for today's show is Social Security disability has a five month waiting period after that disability begins. So you've got to plan the cash around that. You can't buy this protection after you need it, you got to buy it now.So one of the practical things I have for you today is it's time to build a cash Runway in a separate fund. The retirement accounts you have are great for retirement, but your disability transition needs its own fund.Here's one thing I'm going to encourage you to do. Target three to six months of full expenses in a high yield savings account separate from any other existing emergency fund.You're going to have this delay between when you can't work and the disability kicks in. So go create that and note the real number that you give your adult kids every month.One of the things you mentioned, and I haven't talked about it yet because I didn't want to really go here, but I think we need to. You mentioned that you're helping your adult kids.I don't know what that looks like for you, but I think you need to start writing down how much that is. Is it $300 a month? Is it $400 a month? Whatever it is, Write it down. Look at it.It's not about cutting them off right now, but it's about knowing the real numbers before that crisis forces the decision that Cash Runway we talked about is going to buy you time to make decisions with a clear head and instead of a scared one. But now you got to map health care coverage as well. I want to talk specifics about this.You've already alluded to the fact that there is going to come a time when you're probably not going to be able to work your employer. What's called COBRA coverage allows you to keep that insurance for up to 18 months. But here's the problem. A lot of people don't think about this one.You're going to have to pay that full premium on your own. Right now it's subsidized by your employer. Now, this could cost anywhere from 600 to maybe $900 a month for family coverage.Now you can qualify for Medicare through Social Security disability, but that is a process. You're talking about a two year gap to get that approved.You also have the option to get into some Marketplace accounts through Healthcare.gov and that could be a real option, possibly because your income is going to be dropped down. What I would do right now is go talk to hr, lay it all out for them and say, hey, what does this look like?Hey, it could be 15 years from now, it could be five years from now. Get it in writing. Know exactly what that health care gap is before you're standing in it. Now I want to talk about something uncomfortable.I alluded to it a few minutes ago. It's time to talk to your adult kids. I suspect they already sense something's going on. This isn't some spreadsheet moment.These are just plain words you got to say to them. There may come a point where I can't help you anymore the way that I do now. This is where you've got to start helping them build their own margin.You can help them get there now and that way that conversation is a gift now. It's not some burden for later. You got to start to set that Runway for them so they can adjust instead of having the shock.If you've got adult children that are counting on mom to chuck three, $400 in every month and, and you just drop them like a hot potato, that's not a good thing. But you can have that hard conversation today and it'll be so much easier to help them along that path of finding that independence.It's so much harder when you do it later. Now you said something in your message that you didn't even know where to start. And I sense from you that you felt like that was weakness.That's not weakness. That's honesty. You're going through a tough time.I can't even imagine the emotions that you're feeling, especially since you're in healthcare, because you see what this looks like. But I want to remind you about something, because a lot of people say, well, Ralph, but how could this happen to me if I have faith?Here's what faith doesn't promise. It doesn't promise your disease stops progressing. It doesn't promise the insurance company makes it easy on you.It doesn't promise your kids won't worry. But here's what faith does promise. This is why I love talking about faith on this show. Faith promises us that we're not alone facing this.We're not alone today. We're not going to be alone through the rest of this period. And that changes everything.One of my mom's favorite verses from the Bible, and I read this at her funeral, was the 23rd Psalm. And it doesn't say if you read it. It doesn't say the valley disappears.It says, even though I walk through the valley of the shadow of death, I will not be afraid, for you are close behind me. Close behind you. Not far off watching right there with you, friend. You spent your career across the desk from sick people.You've helped them understand their own bodies. Now you're the one on the other side of that desk.And that same God who walked with every patient you've ever comforted is walking with you right now. You don't have to pretend you're not afraid. It's okay to be afraid.You just have to take that next wise step and know that you're not walking that alone. And today you took that step. I just want to reassure you're not panicking right now. You're planning. And those are two very different things.You're doing the harder thing and you're doing the braver thing. So here's your win for today. Go and meet with the HR people and understand the things you're going to have.The long term disability, the short term disability. Ask about those elimination periods, that benefit percentage, the maximum benefit duration.It's not just filing a claim because you're not ready to do that. It's finding out what you're working with and write that answer down somewhere where you'll find it again.Because you're going to have to remember this and Reframe it in your own mind. That first real number is a plan. It replaced that vague fear that you have right now. I want to read our Bible verse for today.I've already kind of mentioned it. Like I said, this was my mom's favorite, and it's the 23rd Psalm, verse 4.It says, even when I walk through the darkest valley, I will not be afraid, for you're close behind me. Your rod and your staff protect and comfort me now. Right now, friend, you're not at the bottom of that valley yet.You're standing at the edge and you're looking straight at it instead. That verse doesn't promise us that the valley won't come. It's going to come for you. It's going to come for all of us.But it promises the Lord of the universe is with you as you walk through that valley. And every step that you take is the rod and the staff that he's already given you.And every document you sign, every policy you read, every honest conversation you have with your kids, he's right there with you. And I truly hope that encourages you. How about we pray together now? Heavenly Father, I bring before you someone who works every day in health care.They're caring for people who are sick while they're quietly carrying their own diagnosis.And that's a heavy thing, Lord, and I just ask right now that you would help them think clearly through those insurance documents and that legal paperwork that feels so overwhelming to them, Lord. Give them courage for one small step this week, starting with that call to hr, maybe calling that attorney, getting those documents in order.Lord, I just ask that you will protect them from despair on the days the disease feels bigger than the plan. They've already spent years helping their kids and their patients, Lord.Let them feel that your hand steadying them the way you've steadied so many others before them, Lord, and just give them courage to face the day we ask this in Jesus name. Amen. Friend, you came to this question with eyes open. They weren't closed. You're not pretending like it's not going to happen.Half the battle is already over. It's the battle that most people never fight. So whatever that disease does next, you're no longer walking into it unprepared.So like I said, today's deck was get that power of attorney, get that healthcare directive, get those things drafted while you have the capacity to do it.Talk to your HR about the real disability income, build that cash Runway, look at that healthcare coverage, and have that honest conversation with your kids now where it's a choice and it's not some emergency. I think you're gonna find they're going to be more encouraging than you would think.Today was heavy, but maybe you're going through something difficult as well. I would love to hear from you. You can reach me by going to financiallyconfidentchristian.com/voicemail.We'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/voicemail. Thank you so much for joining me today. I want to encourage you. Even when you're going through the storms of life, God is with you.He says he'll never leave you nor forsake you. And he's walking right there with you. May God bless you and you have a great day today. It.