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Disabled and forced to retire at 44...how to make 480K last?
Old 03-03-2011, 02:30 PM   #1
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Disabled and forced to retire at 44...how to make 480K last?

Due to an injury I've been forced to retire early at 44 after a steady full-time job of 9.5 years. Have 480K in liquid assets. Currently single with no dependents. Do not own health insurance. Not likely get SSDI. Total living expenses add up to about 22K a year. Fortunately, my medical expenses are very low, but the injury has made it impossible for me to work due to chronic symptoms.

Would like a realistic picture as to how likely I'm completely screwed; if so, is there a stop gap solution? (I feel lucky to have the savings that I have, as others in similar situations are much worse off - but it will likely all evaporate in the event of a catastrophic illness)
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Old 03-03-2011, 02:43 PM   #2
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Not likely get SSDI. Fortunately, my medical expenses are very low, but the injury has made it impossible for me to work due to chronic symptoms.
If your injury makes it impossible to work then why wouldn't you get SSDI?
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Old 03-03-2011, 04:12 PM   #3
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Even a serious illness (as opposed to catastrophic) would derail any plans you have without insurance.

Is another career an option? 44 is quite young - even to a 50 year old like myself. You have enough to tide you through building the skills you need and even starting a the bottom again if you have to.

That's a tough break you've been handed. All the best.
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Old 03-03-2011, 04:15 PM   #4
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If your injury makes it impossible to work then why wouldn't you get SSDI?
Because the guidelines are very strict. The younger you are, the harder it is to get disability. I would have to prove that I am unable to work any job that exists in the national economy. My RFC (Residual Functional Capacity) is probably enough to keep a low-level, minimum wage job that allows frequent breaks and switching positions (due to chronic pain) in a factory somewhere. However, getting and keeping that job is a different story. I would have to prove that I can't work any hypothetical job that exists in significant numbers in the national economy. It would be great if a job existed that had few stressors and was accommodating of chronic pain and other symptoms, but could I find such a job? The jobs in the help wanted ads don't fit that description. I can't prove that I can't work any hypothetical job at all, so it is very unlikely that I would get benefits. If I were over age 55, it might be a different story.
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Old 03-03-2011, 04:19 PM   #5
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DJN - sorry to hear about the injury.

Did it happen at work? Check with your local community and state programs for medicaid or such. Also check for free clinics in your area for future illness.

I would still suggest checking into disability.

Good luck.
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Old 03-03-2011, 04:29 PM   #6
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At least go through the hassle of applying for SSDI. Over 70% of initial claim are denied. Often these claims will eventually be approved through the appeals process. Get copies of ALL your medical and employment records (anything documenting absences due to pain/med apts/etc) - have you had to change jobs often due to your disability? Is your disability expected to last for more than 12 mos or eventually directly cause your death? I helped a veteran get SSDI - his application had over 250 pages of medical documentation - and it was approved! A definite hassle to properly complete the application (DO NOT send in an incomplete app - it will get canned due to incompletion) but could be very well worth it in your case. There are lawyers who can assist you - but if you go that route, stick to the ones who are paid directly by the SSA - out of any back-benefits - not upfront by you. I think they make it difficult to apply to weed out the half assed excuses, because appealing the initial decision is not a walk in the park either. Best of luck to you!
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Old 03-03-2011, 04:33 PM   #7
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I've heard that very few people get disabilty the first time they apply. So apply repeatedly. In the mean time you have a sizeable nest egg and a reasonable level of expenses so you may be okay. Does your condition make you uneligible for giving blood/plasma? In my area you can get $200/mo for giving twice a week. That may not sound like much but it may be just enough to bridge the gap to get you by. What kind of a place do you live in? Do you have a spare room you could rent out? Get creative on ways to get by using less of your savings. I don't think you're as bad off as you make it seem
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Old 03-03-2011, 04:34 PM   #8
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At least go through the hassle of applying for SSDI. Over 70% of initial claim are denied. Often these claims will eventually be approved through the appeals process. Get copies of ALL your medical and employment records (anything documenting absences due to pain/med apts/etc) - have you had to change jobs often due to your disability? Is your disability expected to last for more than 12 mos or eventually directly cause your death? I helped a veteran get SSDI - his application had over 250 pages of medical documentation - and it was approved! A definite hassle to properly complete the application (DO NOT send in an incomplete app - it will get canned due to incompletion) but could be very well worth it in your case. There are lawyers who can assist you - but if you go that route, stick to the ones who are paid directly by the SSA - out of any back-benefits - not upfront by you. I think they make it difficult to apply to weed out the half assed excuses, because appealing the initial decision is not a walk in the park either. Best of luck to you!
Amen to this. This is worth putting your attention to, and my impression without statistics, is that many people will eventually succeed if they get an experienced atty for the appeals process. (One who is paid by SSA, as Fireup points out).

Ha
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Old 03-03-2011, 04:58 PM   #9
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First off, very sorry you find yourself in this predicament.

Now getting on to your request for an honest breakdown of your situation. I've learned a lot reading these forums and am going to attempt a reply. Be forewarned, I'm still learning. I hope and expect others who are much more knowledgeable than I will chime in to correct me and provide even more/better information.

First thing to do is probably to determine how much income you could reasonably expect from your current stash. Because you are young, I would think your SWR should probably be closer to 2%. So, with $480K, that leaves you with approx. $9,600 annual income. You say you need $22K/annual, so this leaves you about $12K short. That's your first problem.

Second problem = no medical insurance.

Hate to say it, but from where I'm standing it looks like you are going to NEED to find a job that pays at least $12K annually AND that provides health insurance. Assuming you can do that, you then need to keep an eye on the national healthcare situation. The situation might change by 2014. Best case - you would need a job that includes health insurance until national healthplan option kicks in.

Of course, even taking away the health insurance variable, you would still need a job that pays approx. $12K annually (hopefully with annual increases that keep up with inflation) for another ~18 years, until you qualify for SS.
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Old 03-03-2011, 06:41 PM   #10
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Is it save to assume you will be eligible for SS when you hit retirement age?

If so, you need to consider that your "stash", while you want it to last as long as possible, will get substantial help in 18 years (i.e. 62, assuming SS hasn't change in the interim).

So your situation, while not ideal by any means, sounds like you have more than enough to keep you afloat until SS kicks in.

Indeed, you might want to seriously consider getting health insurance (if you can - preferably one with a very high deductible, low premiums) to shield you from the one thing that can wipe out your nest egg before SS starts. This expense will increase your current draw, but it will also increase the odds your money will last until SS kicks in.
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Old 03-03-2011, 07:39 PM   #11
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Someone else can probably answer this question, but can you shield the money in an IA? I am not sure how that asset comes into play in the event of a serious illness.

It sounds like pursuing SSDI is your best option but an IA could generate what you need for life. Just putting it out there.

Good luck.

JD
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Old 03-03-2011, 08:10 PM   #12
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One problem I see is the $480K isn't protected from potential creditors like retirement funds would be. Also it's going to be tough getting any public benefits with that kind of money laying around. If the $480K was protected, you could become one of those emergency room/Medicaid types, and not be concerned with the healthcare insurance issue.

If you don't return to some sort of employment, you eventually lose the ability to file for SSDI. There's a currency rule requiring so many quarters of SS credits in a given timeframe. This applies to SSDI, not normal SS.
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Old 03-03-2011, 08:39 PM   #13
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First thing to do is probably to determine how much income you could reasonably expect from your current stash. Because you are young, I would think your SWR should probably be closer to 2%.
What is SWR (assuming it means Safe Withdrawal Rate)? Does this mean the ability to draw 2% and preserve the principal, with taxes and inflation figured in?
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Old 03-03-2011, 08:45 PM   #14
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Is it save to assume you will be eligible for SS when you hit retirement age?

If so, you need to consider that your "stash", while you want it to last as long as possible, will get substantial help in 18 years (i.e. 62, assuming SS hasn't change in the interim).

So your situation, while not ideal by any means, sounds like you have more than enough to keep you afloat until SS kicks in.

Indeed, you might want to seriously consider getting health insurance (if you can - preferably one with a very high deductible, low premiums) to shield you from the one thing that can wipe out your nest egg before SS starts. This expense will increase your current draw, but it will also increase the odds your money will last until SS kicks in.
I was thinking of either a high deductible plan or a Health Savings Account but don't know much about either. Any idea of how low premiums are running these days?

I don't know what the state of SS retirement will be but not counting on it
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Old 03-03-2011, 09:31 PM   #15
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At the age of 43, I became disabled from my employment as a court reporter for the state of new york. I had carpal tunnel and chronic back and neck pain.
I am a single mom, children grown now, and it was a tough time financially. Friends urged me to apply for SSD. I resisted for about a year, thinking I would never get it. Then I decided I may as well apply. They turned me down the first time, then I hired a lawyer. The process took a few years, I had tests done by their doctors and testified at my hearing. To my surprise, they granted me SSD. Because my salary was high, I was awarded about $2200 a month, plus medicare. Believe me, it was well worth going through the process. I think you should definitely apply. If you get it, they will pay you retroactively to when you applied. I also received workers comp because I was hurt on the job. I don't know your situation, but you could also apply for that if you were injured on the job. Hope everything works out for you. Judy
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Old 03-04-2011, 01:31 AM   #16
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Someone else can probably answer this question, but can you shield the money in an IA? I am not sure how that asset comes into play in the event of a serious illness.

It sounds like pursuing SSDI is your best option but an IA could generate what you need for life. Just putting it out there.

Good luck.

JD
I second this idea. I tried putting your info into an online annuity quote site. I didn't know what state you live in, so I tried several, and they all gave the same answer—over $2000 a month. That isn't COLA'd but it would be enough to cover your basic expenses while you investigate your options, including pursuing SSDI. I don't know the nature of your injury—would it allow you to generate some income from home with an eBay business or the like?
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Old 03-04-2011, 05:48 AM   #17
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I second this idea. I tried putting your info into an online annuity quote site. I didn't know what state you live in, so I tried several, and they all gave the same answer—over $2000 a month. That isn't COLA'd but it would be enough to cover your basic expenses while you investigate your options, including pursuing SSDI.
At the risk of being in bad taste: it might also be worth looking for SPIA providers which take into account the fact that disabled people don't tend to live as long as the fully fit. You're going to take a hit on your other insurance because of your disability, so you might as well take the upside on this. (I don't know if such policies exist, but I do know of SPIAs which pay out more as long as you commit to smoking 10+ cigarettes a day.)
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Old 03-04-2011, 06:39 AM   #18
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An option that worked for a member of my family was to find a person with a similar outlook on life and fall in love, then get married. Two lived cheaper than one alone. In the end both received disability payments because of pain issues. They ended up moving to near a ski resort, so they could fulfill their passion for downhill skiing.
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Old 03-04-2011, 07:23 AM   #19
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very sorry to hear of your troubles.

my suggestion, addition to what others have already mentioned, would be to focus on the spending piece of the equation. go to the library and pick up Jacob's book and anything by Joe D and see how far you can reduce your spending level. every dollar you can save in recurring spending is a dollar you don't need to earn.

best of luck!!
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Old 03-04-2011, 07:28 AM   #20
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I think you should do what jmfz1958 did, and see a disability lawyer. S/he should be able to help you assess your situation, and assist with application for SSDI.

In the meantime, can you possibly perform and/or get a work at home job?
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