“If I have my mind, I can work.”
“Great,” I answered. “Let’s test that theory out.” I opened my drawer and pulled out a hammer, laying it gently on the desk between us.
“Please place your hand palm down on the desk,” I said. “Your off-hand is fine. And please don’t move it…the hammer can make a nasty mark on the desk if I miss.”
“Ha…ha…” he said unenthusiastically. He was beginning to see my point.
He had asked me to help him put together a financial plan and it was time to discuss his plans to protect the assets he hoped to accumulate. He was mid-career, children still at home and making very good money. He wanted to focus on the part of the plan that shows big dollars piling up over time as everything goes right.
But my role is to gently introduce a bit of realistic skepticism into every “perfect” situation. And in this man’s situation, one of his biggest potential problems was disability. His disability.
It happens. Disability happens. To about 1 of 5 workers during their working careers. And you just have to ask yourself honestly…what would happen to my financial world if the paychecks stopped coming in?
According to the Social Security Administration, nearly half of all new long-term disability claims arise from injuries, accidents and musculoskeletal disorders (head, neck, back stuff). When I think about accidents, injuries and problems with my head, neck or back, one word comes to my mind.
And that’s where the hammer came in.
No, I was never going to whack his hand with it…but just the thought of it made the point intended. If you do become disabled, it may only impact your body. You may indeed have your mind, “unaffected” by that disability.
But how clearly do you think while you’re in pain? Serious pain. Injury, accident, head, neck or back pain?
Sometimes I ask clients which job they would choose between the following:
Job 1 would pay you $80,000 while working or $0 if you were one of the 1 in 5 that became disabled.
Job 2 would pay you $78,000 while working or $53,000 is you became disabled.
My experience is that most people pick Job 2. The difference in pay isn’t worth the risk.
The difference in pay represents the cost to acquire necessary disability income coverage from a private insurer.
Think about it. If the person with Job 1 became disabled, and that disability lasted 20 years, that’s $1.6 million. Do you have another asset worth $1.6 million? If you do, is it insured?
You may work for an employer that offers disability income insurance as an employee benefit, perhaps at no cost to you. If so, count yourself among the fortunate.
If you don’t have this important insurance coverage, look for an agent that specializes in this area. It’s complicated.
Disability is more common than you realize and more costly than you can imagine.
Take steps now to protect yourself…while you are able.
Argent Advisors, Inc. is an SEC registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information at https://ruston.argentadvisors.com/important-disclosure-information