How can you prepare for your spouse to leave the workforce due to a disability?
Thats what were discussing this week.
This weeks question comes from Katherine:
My husband has a long-term chronic disease.
He is also a small business owner and has been for years.
Weve tried to get long-term disability insurance for him and were, no surprise, denied.
How can we prepare his business and our finances for this anticipated shock?
Whats the best vehicle to save for this in?
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Im sorry to hear about your husbands health woes, Katherine.
How old are you and your husband?
Is your house paid off?
If not, can you afford your rent or mortgage payment on your income alone?
Do you have children?
How expensive will his medical care be?
Once you start answering those questions, youll get a better idea of what to do with your money.
Money market accounts (not funds) are essentially savings accounts with higher interest rates.
Currently you’re free to find adecent accountwith a two percent APR.
The CD should be for three to six months maximum, he says.
The idea is: accessible and safe, says David Haas, a New Jersey-basedCFP.
Thats a way to build up your retirement nest egg but still have some flexibility and security.
Who will take over for him if he is unable to work?
He could take a percentage of the fees for himself.
If none of that is appealing, then you may need to make some hard choices and lifestyle changes.
Sock all of the money away from his income until you need it later.
That way this isnt a big shock to the system when it happens.
Finally, if your husband pays into Social Security, he should be able to qualify for disability payments.
If not, then start paying into it now, says Dwyer.
This could be available through an industry association and there can be open-enrollment periods.
You might check with professional organizations to see what options are available to him.
Whatever you do, it might make sense to seek out a financial professional who specializes in disability insurance.
Best of luck with everything.
