A side of FIRE rarely mentioned: Disability

[eyenitnoy]

Greetings everyone:

I joined this forum years ago, then forgot about it. One day, I started getting emails from the website so I have been lurking for some time now. I am "retired" if you want to call it that. I was not ready but, ready or not, retirement arrived!

I have a medical condition that prevents me from working. The details are unimportant, suffice it to say it is not a terminal condition but one that forced me to "retire" before I ready. The numbers just weren't quite there. But I had no choice in the matter.

Thank God for FIRE! I did a lot of number crunching over the years, and had lots of different retirement dreams. When I was knocked out of the workforce, I was terrified.

But I had been saving for years as part of my own FIRE plan. I had no debt, a small home owned free and clear (I'm single with no kids), a "live under your means lifestyle" and savings. I've read many posts here. Compared to some of the numbers I see people report as savings, my savings was modest. But having this made all the difference in the world.

Do not underestimate this aspect of FIRE. One of my biggest complaints about many of the posts I read is that there is an inherent, dangerous, assumption. That assumption is that you get to choose when to retire. Pray that is the case. I didn't have a choice. And you might not either. And sure, there are things like Social Security Disability. But the application process is horrific and the payments, if you can even get them as denials are common, are often not that great.

Having worked towards a FIRE retirement dream saved me from real misery. If I lived the typical lifestyle of debt and overspending, and saved like the average American...

And, once I had the "this is the amount you have saved" number, the number crunching became a lot easier. Instead of figuring out how much I needed to save to retire, I only had to figure out how much I could safely spend. That, to me at least, was easier than saving and retirement projections.

I'd also add these pieces of advice: Everyone in the workforce should at least research private disability insurance. It's a good investment. In addition, everyone still working and saving for retirement should take whatever savings number they have right now and pretend you are retired right now. Ask yourself the question "How can I live on this?" not "Is this enough." And don't assume you'd get disability payments either. You might not.

Thanks to everyone in this forum. I hope my story gives pause for reflection.

 

[Aerides]

Thanks for sharing.
I always kept the maximum LTD coverage while employed. I had a health scare in my 20's that could have gone that way, even though I fully recovered and never got beyond short-term, it always kept me from being over confident and thinking I could dismiss the coverage.

 

[disneysteve]

Disability insurance is rarely talked about but is so very important should the need arise. I've had it since I was a medical resident back in the early 90s. I've actually been looking at cancelling it now that I'm at the tail end of my career and prepping for ER. Plus my current job has be covered as well which my previous jobs did not.

 

[Major Tom]

Welcome back to the forum, and thank you for sharing your story. Your experiences are a great example, in my opinion, of why it is better to be prepared. I do have sympathy for those who, due to circumstances beyond their control, are no longer able to work, and have little to no savings. I'm happy with them receiving help from the state. However, it's always easier for the individual affected, if they are able to manage on their own.

Certain types of people hope for the best, while planning for the worst. You are one of those folk, and that approach has stood you in good stead.

 

[Dtail]

My DGF is receiving SSDI and yes the process was involved. She started receiving the payments at around 53 y.o. and the amounts were roughly what she would have received at 62.
Hate to say, but this payment did factor into our retirement decision.

 

[MRG]

Difficult subject that nobody wants to talk about. In my teens and twentys I logged and worked in sawmills. Bad stuff can happen in an instant; people's lives are majorly changed seldom for the better. I've seen it firsthand.
OP I am glad that despite the setback you can salvage a decent retirement.

I remember a guy who worked off the table for cash so he didn't pay taxes. He lived high on the hog for someone making 25k in 1978. Then a chainsaw accident altered his world he couldn't work with his hands anymore. His cash employer treated him very well for a few years then suddenly disappeared. Guy hadn't paid in squat for SS and had no other employable skills. I'm sure if he was in the system they may have been able to retrain him but sadly he wasn't.

I w*rked with some interesting people many who had disabilities and were trying to work. Some were self inflicted by drugs and alcohol but under it was illness and some folks were very ill.

I will always remember a guy who worked stacking lumber for me. His only job was putting the board on the right pile as it was measured and talleyed to sell. Many of these guys couldn't read so the boards were marked with the same label as the stacks of lumber were marked. Pattern matching was the only skill. Poor man didn't have the mental capacity to do that. He was let go not for failure to try he couldn't do that job or any other there. I wonder what happened to him. Probably not good.

 

[Montecfo]

eyenitnoy,

That is certainly a cautionary reminder. Glad you have made lemonade from the lemons.

I carried private disability insurance just about my whole career. Cancelled it right at FIRE. Good reminder. Stuff happens.

 

[qwerty3656]

It's not just disability that can knock you out. My company went bankrupt about 10 years ago and I eventually was laid off. Finding a job in your 50s is very difficult and I was never able to find anything close to the level of income I was making.

 

[pacergal]

Thanks for sharing your story.
We had STD and LTD policies the majority of our working life, thankfully never used them.

 

[Koolau]

Megacorp provided a small amount of disability insurance and offered a group rate on further insurance. I took all that was available. Never needed it, thankfully, but it was reassuring to know it was there. I'm glad OP was ready to FIRE and did not find him/her self with few resources. It would be good for anyone not yet ready to FIRE to deal with it now because YMMV.

 

[tmm99]

As others have mentioned, I paid for the long term disability insurance until I resigned. The cost of the insurance increased as my age went up, but it gave me peace of mind, so it was worth it. I think it was supposed to replace 70% of my pay, which I thought was quite generous.

 

[mystang52]

To OP's credit, not just did (s)he think ahead regarding LTD insurance, but apparently lived an LBYM lifestyle. Both of these have now paid off in that it may not be the retirement that was planned, but nether will it be financially devastating. OP - I wish you the best, and thanks for posting this.

 

[ExFlyBoy5]

Thank you for sharing, this is an important "what if" that isn't discussed often.

In a previous marriage, I witnessed what a sudden disability could do to a family that wasn't financially prepared. FIL was a mid level manager and was making good money, but spent it faster than he could make it. He didn't have LTC insurance. At the age of 54, he had a debilitating stroke that resulted in having the mental capability of a 7-8 year old child and he never recovered. Although he did get SSD, his wife who was not in great physical shape had to go to work in a manufacturing facility that took a serious toll on her life. He lived another 10 years and made life absolutely miserable for his wife. Sadly, she died a couple years later.

It was a very sad thing to watch and was a very eye opening example of "Hope for best but plan for the worst."

 

[Walt34]

One BIL had that happen to him, fortunately only after he'd been there long enough to get a pension. But after one too many cardiac events the doctor told him "You're retired. Effective today. As in Right Now." He did go on SSDI for a couple of years until the pension kicked in but it is not the retirement he and his wife had planned on.

 

[marko]

My brother had a $1 a week LTD premium through his employer. When he had a massive stroke, they (Voya) were great! Checks arrived within a few weeks after his company stopped paying him.

Best of all, after I was told by SS that his getting Disability SS was "going to take a long, long time; he might just wait the 4 years and get regular FRA", Voya paid for a lawyer and my brother got SSDI in a matter of weeks. (of course, it was to their advantage, but he made out even better than his LTD payments)

 

[jollystomper]

This is a good reminder. Thank you.

I was fortunate that my Megacorp had a good LTD plan while I worked. I felt secure as the percentage of salary the plan would pay was greater than our expenses. Megacorp added additional support to plan if one became disabled during a company activity including travel. But I did not take it for granted, thinking about potential disability was another motivator for building up our assets.

 

[vpi78]

Greetings everyone:

I joined this forum years ago, then forgot about it. One day, I started getting emails from the website so I have been lurking for some time now. I am "retired" if you want to call it that. I was not ready but, ready or not, retirement arrived!

I have a medical condition that prevents me from working. The details are unimportant, suffice it to say it is not a terminal condition but one that forced me to "retire" before I ready. The numbers just weren't quite there. But I had no choice in the matter.

Thank God for FIRE! I did a lot of number crunching over the years, and had lots of different retirement dreams. When I was knocked out of the workforce, I was terrified.

But I had been saving for years as part of my own FIRE plan. I had no debt, a small home owned free and clear (I'm single with no kids), a "live under your means lifestyle" and savings. I've read many posts here. Compared to some of the numbers I see people report as savings, my savings was modest. But having this made all the difference in the world.

Do not underestimate this aspect of FIRE. One of my biggest complaints about many of the posts I read is that there is an inherent, dangerous, assumption. That assumption is that you get to choose when to retire. Pray that is the case. I didn't have a choice. And you might not either. And sure, there are things like Social Security Disability. But the application process is horrific and the payments, if you can even get them as denials are common, are often not that great.

Having worked towards a FIRE retirement dream saved me from real misery. If I lived the typical lifestyle of debt and overspending, and saved like the average American...

And, once I had the "this is the amount you have saved" number, the number crunching became a lot easier. Instead of figuring out how much I needed to save to retire, I only had to figure out how much I could safely spend. That, to me at least, was easier than saving and retirement projections.

I'd also add these pieces of advice: Everyone in the workforce should at least research private disability insurance. It's a good investment. In addition, everyone still working and saving for retirement should take whatever savings number they have right now and pretend you are retired right now. Ask yourself the question "How can I live on this?" not "Is this enough." And don't assume you'd get disability payments either. You might not.

Thanks to everyone in this forum. I hope my story gives pause for reflection.

How much time to you spent at Rose House in Pattaya these days?

 

[LateToFIRE]

Good to raise this issue! It was suggested to me early on that disability insurance would be far more relevant than life insurance in the early innings of saving/investing, so I've both maxed out employer-provided disab. insurance, as well as carried significant private insurance, as you suggested. Fortunately, never needed, but formed a critical safety net all these years while preparing for FIRE. Over the next year or so will be canceling a lot of insurance (life and disab.) - no longer needed but will feel weird to go fully naked.

 

[DrRoy]

Glad you made it.

 

[Northforker]

I reached FI and retired early at age 59 on May 1, 2020. In November 2020, I saw a neurologist to evaluate a tremor in my left hand. I was diagnosed with Parkinson's Disease stage 1. While my symptoms are relatively mild at this time, eventually the disease will progress and expenses to deal with it will increase. I am trying to slow the progression by being very active by walking/hiking/fishing/camping.and attending a exercise/fitness class specifically designed for Parkinson's called Rock Steady Boxing. We never know what the future will bring and we cannot plan for every eventuality.

 

[Montecfo]

I carried private group disability insurance throughout my career. Great peace of mind. Typically what you get from work covers 24 months.

 

[Bigdawg]

Good to raise this issue! It was suggested to me early on that disability insurance would be far more relevant than life insurance in the early innings of saving/investing, so I've both maxed out employer-provided disab. insurance, as well as carried significant private insurance, as you suggested. Fortunately, never needed, but formed a critical safety net all these years while preparing for FIRE. Over the next year or so will be canceling a lot of insurance (life and disab.) - no longer needed but will feel weird to go fully naked.

We knew about disability, but we were both active-duty military so didn't really think we could get it. We knew if things went south, we could get medically retired from the military. Since we were both active duty, we declined survivor option on pension. Instead, we did term Life Insurance. I've got 500k thru age 65 and another 500k thru age 75. If my dirt nap happens after age 75, DW will be 69 and receiving 4 COLA pensions totaling over 120k/yr. I think she will be OK. For LTC we are self insuring.

 

[Bigdawg]

I reached FI and retired early at age 59 on May 1, 2020. In November 2020, I saw a neurologist to evaluate a tremor in my left hand. I was diagnosed with Parkinson's Disease stage 1. While my symptoms are relatively mild at this time, eventually the disease will progress and expenses to deal with it will increase. I am trying to slow the progression by being very active by walking/hiking/fishing/camping.and attending a exercise/fitness class specifically designed for Parkinson's called Rock Steady Boxing. We never know what the future will bring and we cannot plan for every eventuality.

Sorry to hear about your diagnosis. Glad to hear you are facing it head on and living your best life. Best of luck to you sir.

 

[NgineER]

Sorry to hear about your diagnosis. Glad to hear you are facing it head on and living your best life. Best of luck to you sir.

+1 Sorry to hear about your diagnosis.

 

[1242Vintage]

My kid brother was disabled at work when he was in his 30s. He’s a nice guy and didn’t sue his employer regarding the poor condition of the equipment that led to the accident. Has been living on meager SocSec disability ever since. Sad situation.