Does Social Security Retirement Replace Social Security Disability Insurance?

We write about financial, physical, and emotional wellness, and the steps that working Americans can take the strengthen their resilience and protect their income. Below are the few select posts checkout our full blog here.

Mature couple portrait, wondering about Social Security benefits. Protect Your Income, Open Enrollment 2023

Does Social Security Retirement Replace Social Security Disability Insurance?

November 7, 2023
By The Council for Disability Awareness Disability Insurance, Featured, Financial Planning, Protect Your Income, Social Security Disability Income, SSDI, Uncategorized

By Steve Perrigo Social Security Disability Insurance (SSDI) and Social Security retirement benefits are two vital programs administered by the Social Security Administration (SSA). This year an average of almost 67 million Americans per month will receive a Social Security benefit, totaling about $1.4 trillion .. more »

By Steve Perrigo

Social Security Disability Insurance (SSDI) and Social Security retirement benefits are two vital programs administered by the Social Security Administration (SSA). This year an average of almost 67 million Americans per month will receive a Social Security benefit, totaling about $1.4 trillion in benefits paid during the year. Social Security is the major source of income for most people over age 65, but the agency provides more than just retirement benefits. Last year, retired workers and their dependents accounted for 76.9% of total benefits paid. Workers with disabilities and their dependents accounted for 11.6% of total benefits paid, according to the agency.

SSDI and retirement benefits were both created to provide financial support, but they serve different purposes. Social Security Disability Insurance is a federal insurance policy that you’ve paid into via your FICA taxes for all the years you worked. One hundred fifty nine million American workers have access to this program. If these individuals become unable to work due to an injury or disability, they are covered by SSDI. The monetary support you receive through Social Security disability benefits continues until you’re able to return to work on a regular basis or until retirement age.

Social Security retirement is also paid into via your FICA taxes. Retirement benefits are intended to provide an income stream once you reach retirement age, which can be 65 or 67 years of age depending on the year you were born.

Some people mistakenly believe that if they receive SSDI, they forgo their Social Security retirement benefits or can receive both SSDI and retirement simultaneously. They are two separate benefits, but one dovetails into the other. Social Security disability benefits automatically convert to retirement benefits when beneficiaries reach full retirement age. So, when you receive SSDI benefits, it’s similar to getting your full retirement benefits early. In addition, you may also be able to receive Medicare coverage earlier than age 65, as Medicare is included with SSDI benefits after a waiting period.

How SSDI Benefits Are Calculated

The SSA determines your benefit amount based on your lifetime average earnings before you became unable to work. Your payment amount will be calculated using your covered earnings. Again, this is money you made at jobs where you paid FICA taxes.

Your SSDI monthly benefit will be based on your average covered earnings over a period of time, which is referred to as your average indexed monthly earnings (AIME). The SSA uses these amounts in a formula to determine your primary insurance amount (PIA). This is the basic amount used to establish your benefit.

The maximum benefit you can receive in 2023 is $3,627 per month, up from $3,345 in 2022.The SSA and SSDI representation organizations have benefits calculators that you can use to obtain an estimate of your monthly benefits. This year, the average SSDI payment for an individual is $1,484 while the average monthly benefit for a recipient with a family is $2,616. SSDI also protects your retirement money with an earnings freeze that could result in a higher retirement income.

Latest Amount and Quarters of Coverage explanation

In 2023, the amount of earnings required for a quarter of coverage (QC) is $1,640. The terms “Quarter of Coverage,” “Social Security credit,” and simply “credit” are all used interchangeably. A QC is the basic unit that determines whether you are insured under the Social Security program. You can only earn four QCs in one year, no matter how much money you make.

Every year the amount of earnings necessary for credits increases slightly as average earnings levels rise. The credits you have earned stay on your Social Security record even if you change jobs or have no earnings for a while.

You need at least 10 years of work (40 QCs) to qualify for Social Security retirement benefits. The SSA bases the amount of your benefit on your highest 35 years of earnings.

While you cannot receive SSDI and Social Security retirement benefits at the same time, you can transition from one program to the other based on your changing circumstances and age. If you or someone you know is considering applying for SSDI, we advise consulting with a Social Security representative to help navigate the complex SSDI program and ensure the SSA receives complete information based on your individual circumstances.

Mother holding newborn baby. Protect Your Income, Open Enrollment 2023

Expecting a Baby? Disability Insurance Can Help!

November 3, 2023
By The Council for Disability Awareness Disability Causes, Employee Benefits, Featured, Financial Planning, Personal Finance, pregnancy, Protect Your Income, Short Term Disability

Expecting a baby? congratulations! You may not know it, but disability insurance offers valuable financial benefits for expectant parents. In the event that you become unable to work during or after your pregnancy, here are some ways that disability insurance can help: Income Replacement .. more »

Income Replacement

Disability insurance will typically provides a portion of income if you’re unable to work because of your pregnancy. This can help you pay bills and cover essential expenses like rent, mortgage, groceries, and medical bills.

Maternity Leave

In some cases, disability insurance can help provide partial income replacement during maternity leave. This can help you take the needed time to recover and bond with your newborn, without the stress of losing all of your income.

Medical Expenses

Pregnancy and childbirth can sometimes involve unexpected health issues that require medical treatment or hospitalization. Disability insurance can help cover those medical costs.

Childcare Expenses

After your child is born, if a disability limits your ability to care for your baby, disability insurance can help cover childcare costs.

Peace of Mind

With the excitement and the stresses of pregnancy ahead, having disability insurance can reduce financial worries and let you focus on your health, your new baby’s well-being, and your family’s needs.

Short-Term vs. Long-Term Disability

You’ll want to understand the coverage of your disability insurance policy. Short-term disability insurance – the most common plan – typically covers shorter-duration disabilities such as pregnancy complications. Long-term insurance is designed for more serious and extended periods of disability.

Make Sure You Have Disability Insurance

Disability insurance is a proactive measure, so it’s typically a good idea to have coverage before you become pregnant. Ask your employer if you have disability insurance, and if you do, it’s a good idea to review your policy’s coverages and limits.

Other Financial Protections

In addition to disability insurance, many states require employers to provide paid maternity leave. The U.S. Family and Medical Leave Act (FMLA) allows eligible employees to take up to 12 weeks of unpaid leave for specific family and medical reasons. Also, be sure to ask if your employer provides additional maternity leave benefits beyond what is legally required.

To learn more about income protection, visit RealityCheckup.info, which is part of a CDA consumer outreach program to help working adults understand the importance of having alternate sources of income for times when they cannot work due to illness, injury, or pregnancy.

Mature couple comforting each other. Protect Your Income, Open Enrollment 2023

The Story that Cemented my Conviction

October 31, 2023
By The Council for Disability Awareness Disability, Disability Causes, Disability Insurance, Facts, Featured, Financial Planning, Insurance, Long Term Disability, Personal Finance, Personal Stories, Plan, Protect Your Income, Uncategorized

My entire career, I’ve been told that “stories sell, not features.” This is so true because nobody cares about the products themselves, people only care about what a product can do for them. To know what something can do for you, you must put yourself in a scenario where you see yourself benefiting from it. This always reminded me of the movie Tommy Boy, when Chris Farley’s character iconically and vividly explained what would happen if you bought “cheap brake pads.”

I often use stories to help clients understand the value of the tools they need to support their financial future. I also use stories to explain complex product features that help clients make decisions on whether it’s worth paying more for something (since cost is a function of value). These stories are sometimes personal stories from my own family, or stories of people I’ve worked with over the years. I also use stories I’ve heard from others that really stuck with me. But there is one story that has cemented my conviction in the importance of having disability income insurance and why I should never be afraid to push harder.

The Desperate Doctor

A psychiatrist’s wife had reached out after finding me online and reading an article I had written a few years earlier. She wanted to talk about getting more disability insurance for her husband as soon as possible, which always sends red flags because whenever someone is urgently looking for insurance, they are probably ready to start using it.

After a brief discussion with the couple, I learned that between group, association, and individual coverage, the doctor had a total of $30,000 per month of protection. The wife also worked as a pharmacist and made a good income as well. So why were they so desperate to get more? I soon learned that the doctor had a progressive form of Parkinson’s at the age of 42.

What stood out to me most about this discussion was that they were willing to pay any amount of money to get more coverage. “Is there anything we can do? Is there any amount of money we can pay to get more?” I could hear the fear in their voices which surprised me because $30K of monthly benefit sounds like a lot. But to the mother and father of two young children with a pending debilitating disease, they were willing to empty their bank accounts to get more security. Not only was the father going to lose his income, but he was also going to lose his body and his ability to function. The pharmacist wife was going to have to quit her job as well to stay home and help with his care, causing them to lose two incomes.

I talked them through all their policies and how each would pay in various scenarios as the disease would progress from a partial disability to a total disability, to a catastrophic disability. In that moment, they didn’t care about the definitions, the financial ratings of the company, or nuances with the various policy riders. All that mattered was they didn’t have enough, and they couldn’t get any more. Knowing how the policies worked and when they could expect payment in various scenarios gave them some comfort, but in the end, I couldn’t do anything for them.

Before his diagnosis, he admitted that he fought his advisors. He only bought what he felt he needed and justified his decisions at every turn. Phrases like “I’m never going to need this” and “we don’t need that much; we can always cut back on what we spend,” were his way of convincing his prior advisors to only sell him what he was willing to buy. He didn’t have a reason to buy more because he couldn’t see a scenario where he and his family couldn’t live on $30,000 a month. Now, he was willing to do whatever it took to make sure he had as much as he could get. The reality of a life that would be vastly different from what he and his wife had planned for and worked so hard to create scared him.

In hindsight, he wished his advisors had pushed him harder, though he wasn’t sure he would have listened and was thankful for what he had. So, what did he have? He had life insurance policies which we looked to see if he had a waiver of premium and possibly still had time to convert his term insurance into permanent so he could max fund premiums for a period before letting the waiver of premium take over. But his policy didn’t have the waiver of premium.

He also had disability income insurance policies and after we reviewed them, we found there was no catastrophic benefit to help with at home care and there were no retirement protection benefits to replace his ability to save for retirement. It’s important to understand when benefits begin to pay out on any policy purchased. His association policy would pay, 1) full benefits at the time he becomes totally disabled and is unable to work and/or 2) partial benefits if he can work but on a limited basis such as fewer hours or performing limited duties, but he must experience a total disability first. Since his condition will slowly progress and eventually turn into a total disability, he does not have coverage in place to help with the loss of income he’ll experience before he becomes totally disabled. There was so much more that could’ve been done but wasn’t.

I use this story a lot, especially when someone tells me “I don’t need that much.” Every financial dream and every well laid out plan are formed on the basis that our income will always be there – the one input that impacts every possible output and scenario. Protecting the income should be the priority and should be addressed with conviction and urgency.

Although this couple was never a client of mine, I’m glad I met them. They reinforced my beliefs and strengthened my fervor to ensure none of my clients will ever experience what they are experiencing right now. I never want to tell someone “I’m sorry, I could have prevented this if only I pushed a little harder.”

Two friends comforting each other - Personal Stories

Can Grief Become a Disability?

October 26, 2023
By The Council for Disability Awareness Depression, Featured, Finance, Grief, Mental Health, Personal Finance, Personal Stories, Protect Your Income, Uncategorized

The short answer is “yes.” Grief is a natural and powerful response to loss that can sometimes overwhelm us. And, few of us grieve in the same way. We might experience it emotionally, physically, or cognitively, but for most of us, grief becomes manageable over .. more »

My own experiences with grief came into focus recently through my work with The Council for Disability Awareness. The unexpected passing this past August of The CDA Director, Carol Harnett, had a profound effect on everyone who knew her and worked with her. She was a tireless leader and passionate about her role.

For me, that loss triggered memories of past grief reaching back many years. The most difficult loss was the death of my husband and the unexpected financial setbacks that it brought on. There were some tough times when I felt overrun with emotions that I wasn’t sure would pass. But, with therapy and the understanding of wonderful friends and family, I overcame my emotional struggles. I feel fortunate.

However, for many people, grief can become so severe and prolonged that it becomes debilitating and may become classified as “prolonged grief disorder.” For many, this experience of grief makes social interactions difficult and affects their ability to work. It can be so disruptive that it could be classified as a form of temporary disability. The Americans with Disabilities Act (ADA) defines mental impairment – such as complicated grief – as a disability if it substantially limits someone’s ability to work.

Short-term disability insurance may provide coverage for prolonged grief disorder (or any other mental health condition) depending on different factors. If you have disability insurance, be sure to review your policy for any limitations or requirements.

At the time of my husband’s death, I was able to work and was fortunate to have my therapy covered by insurance. However, back then, I didn’t have disability insurance which would have made my financial burdens significantly easier.

I wouldn’t be sharing this story except for my involvement with The CDA. Our mission is to raise awareness of the importance of disability insurance for all working Americans. And now for me, it’s personal. My message is this: please take full advantage of all income protection programs offered by your employer and/or make sure you take out individual policies. There are many resources available and you can visit realitycheckup.info.

If you or someone you know is struggling with profound grief it’s important to seek support. Talk to your physician, family, or friend, or seek counseling through therapy or a support group.

Grief

Is like the ocean, it comes in waves,

Ebbing and flowing. Sometimes the water

Is calm, and sometimes it is overwhelming.

All we can do is learn to swim.

–Vicki Harrison

Protect Your Income, Open Enrollment 2023

Is Disability Income Insurance Worth It?

October 25, 2023
By The Council for Disability Awareness Disability, Disability Insurance, Facts, Personal Finance, Protect Your Income, Uncategorized

This article originally appeared on the MassMutual blog site You insure your most valuable assets like your home, your car and your life. Most people would agree that they’re worth protection; however, disability income (DI) insurance is something people tend to be less certain about. They’re not .. more »

This article originally appeared on the MassMutual blog site

You insure your most valuable assets like your home, your car and your life. Most people would agree that they’re worth protection; however, disability income (DI) insurance is something people tend to be less certain about. They’re not sure if they really need it, or if it’s worth the cost. So, is it? There’s no cut-and-dried answer, but there are some strong arguments to be made in favor of DI.

What are the chances you’ll need it?

When you think about the kind of disability that could keep you from working, usually the first thing that comes to mind is a car accident or other catastrophic injury — in other words, something that could happen, but most likely won’t.

In reality, the most common cause of disability is illness, not accidents or injuries. (Take our disability income insurance quiz)

Arthritis, back pain, neurological problems, and cardiovascular illnesses are all more common than injuries when it comes to disability claims.¹

You might be thinking that there’s always savings. If you have enough

money in the bank to cover your living expenses for more than a month or two, you’re in better shape than the large majority of Americans. If you don’t, you’d need to consider another option. (Calculator: How much DI insurance do I need?)

Also keep in mind that the average disability lasts a lot longer than the one-to-two month range. Most people’s savings would run out long before that.

Can I afford disability insurance?

Disability income insurance helps replace a portion of your income if you are too sick or injured to work. Many people have DI insurance through their employer. Such coverage, however, can fall short in both the amount and type of coverage your household may need. (Related: 6 ways group disability income insurance may fall short)

Individual disability income insurance plans can ensure you have protection that’s right for your circumstances. But when you’re already paying for other kinds of insurance — home, auto, life, etc. — it’s hard to think about buying more. But a good way to frame it is what disability insurance costs versus what the benefit would be if you used it.

Here’s a hypothetical: Say a 30-year-old man, taking home $56,250 a year buys a disability insurance policy that costs him $929 per year. (By comparison he could be spending $985 a year on a daily coffee, assuming an average price of $2.70.)

If he becomes totally disabled, after a 90-day waiting period he could receive $4,050 a month over 12 months, replacing about 86 percent of his pre-disability, after-tax income — and hopefully allowing him to keep up his coffee habit.

There are, of course, some limitations and eligibility requirements for DI. So, in the end, it’s a matter of whether you feel like the benefit you could receive outweighs the cost of premiums and the uncertainty that comes with not having any coverage at all. Costs and benefits vary from policy to policy.

Protecting your most valuable asset

With any luck, you’ll never have to deal with a disability that keeps you from being able to work. But it’s a good idea to have a plan in place, so that if you ever did become disabled you could still cover your expenses and provide for the people who count on you.

_{1 MedicineNet, “Leading Causes of Disability,” April 20, 2022.}

_{2 Social Security Administration, “The Faces and Facts of Disability/Facts.”}

_{Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MA 01111-0001) and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company (Enfield, CT 06082).}

_{Policies have exclusions and limitations. For costs and complete details of coverage call your agent or MassMutual at 1-800-272-2216 for a referral to an agent.}

_{The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.}

patient and doctor consulting about prostate cancer, a personal story

How My Experiences as a Patient Helped Me Become a Better Physician and Deepened My Understanding of the Impact Illness has on the Whole Person

October 19, 2023
By The Council for Disability Awareness Anxiety, Disability, Disability Insurance, Health and Wellness, Mental Health, Personal Finance, Personal Stories, Uncategorized

By Dr. Jonathan Torres, Medical Director, UnitedHealthcare Specialty Benefits Like many other people, I was going through life busy raising children, working and making time for hobbies and travel when possible. I had completed medical school, residency training and served as a physician in the .. more »

By Dr. Jonathan Torres, Medical Director, UnitedHealthcare Specialty Benefits

Like many other people, I was going through life busy raising children, working and making time for hobbies and travel when possible. I had completed medical school, residency training and served as a physician in the U.S. Air Force. During those more than 27 years as a practicing occupational medicine physician, I had the privilege to treat thousands of patients, many of whom were experiencing significant health issues. When I was in the exam room face-to-face with my patients, I thought I knew most of them reasonably well and had a good sense of what they might be going through.

That all changed shortly after turning 50, when I was diagnosed with a potentially serious medical condition. I had a stark realization: I didn’t know as much as I thought I did about what my patients were going through. As a physician and now a patient, I became immediately focused on finding the best doctors and exploring the myriad treatment options, each with their own risks and complications. I lost sleep reviewing research data on my condition and, honestly, became overwhelmed with all of it.

This new illness consumed my time, energy, and focus – not to mention all that goes with the many medical visits and coordinating treatments amid family and work commitments. I muddled through a trying six months of “not fun” consultations and diagnostic testing. I found myself overwhelmed trying to find the right doctors and decide on a course of treatment, despite differing medical opinions and recommendations. It wasn’t until later I realized how much the stress and anxiety associated with my illness had affected me.

I eventually connected with the right physicians for me and my condition and opted for surgery. While my recovery featured more downs than ups, I was relieved to eventually be on the other side of this life-threatening issue. Although I would never wish any of this on anyone, the experience has made me a better physician and person. It’s given me a new appreciation and understanding for the challenges people face when navigating the health system.

Accepting Support from Others

My life changed the moment I received the call from my doctor telling me I I had prostate cancer. Initially I felt very alone with my diagnosis, but thankfully I have a strong and loving family that helped support me. As I started sharing this news with close friends, the sense of support became immeasurable. Opening up about this condition made me stronger – as if I were carrying a lighter load. Words cannot express the gratitude and appreciation I felt when people asked, “How are you doing?” Also, my dog, Mason, helped too. While he couldn’t understand what was going on with me, somehow it felt like he just knew.

Mental Health and Physical Health go Hand in Hand

Whole-person health is just that: mind and body connected and in balance. Through my diagnosis and recovery, I learned that we should not underestimate the impact physical conditions have on one’s mental health and well-being – and vice versa.

Throughout my life I have always thought of myself as someone who manages stress reasonably well. However, I learned there can be increasing levels of health-related stress, interrupted restorative sleep, and anxiety about the unknowns that can be subtle and unrecognized at first and escalate significantly if unchecked. At its peak, I also started to develop physical symptoms that were unrelated to any specific cause or underlying medical condition. It was not until I completed additional testing that I realized these were entirely due to the degree of psychological stress I was experiencing.

Disability and Supplemental Health Plans can Help Address Coverage Gaps and Decrease Financial Stress when Serious Health Events Occur

Most people, me included, often spend most of our time during open enrollment comparing health plan options as part of our employer-sponsored benefits. Now that I have seen first-hand the ways in which a significant health event can have unexpected and often unplanned financial impacts, I’m prioritizing financial safeguards to help cover associated and expected financial gaps. That includes electing additional coverage such as disability, hospital indemnity and critical illness plans.

When I was overwhelmed with my health condition and out of work after surgery, I learned the importance of having short-term disability (STD) coverage. This type of plan enabled me to experience less financial stress and instead focus on my recovery. I did not have critical illness coverage at that time (I do now) and learned that in situations like this, this additional benefit can help make up the difference between STD coverage and regular pay (about 60%) and other financial gaps, including to help cover out-of-pocket expenses such as health plan deductibles or coinsurance requirements.

Looking Back and Looking Forward

As time marches on and I look back to that chapter of my life, there is an overall realization that this health event has made me a better person and physician. I try to be mindful of that lesson every day. Here are a few thoughts I keep in mind about this experience that may be beneficial to consider:

How I felt when asked “How are you doing?” And how asking other this question may help them, too.
The importance of recognizing our own stress levels and ability to cope, while leaning on others for support when needed.
Significant health events have multidimensional effects on us and, whenever possible, it helps to view health and illness holistically.
Especially now that I have seen first-hand the ways in which a significant health event has unexpected and often unplanned monetary impacts, it gives me reassurance to have financial safeguards in place, including disability and critical illness coverage.
Relying on key individuals and professionals at specific points in my health journey not only helped me move forward, but also now serves as an ongoing source of gratitude and appreciation.

Higher Level Perspectives and Broader Impact

Given my many years in clinical practice, my experience as a patient with my own health journey, and now more recently with my work at UnitedHealthcare (where the following are prioritized), I understand the value and importance of:

Focusing on whole-person health as a fundamental starting point for overall well-being.
Developing approaches to improve whole-person health rather than focusing primarily on risk management.
Expanding resources through Employee Assistance Programs (EAP) to include more no-cost virtual or in-person visits.
Simplifying the consumer experience by leveraging technology and connecting specialty and medical benefits to make navigating the health system more intuitive and less burdensome.
Recognizing that a significant health condition can have financial impacts on the individual and this can affect decisions regarding healthcare engagement.
Improving access to health advocacy resources to help people bridge potential gaps within our healthcare systems.

_{To learn more about income protection, visit RealityCheckup.info, which is part of a CDA consumer outreach program to help working adults understand the importance of having alternate sources of income for times when they cannot work due to illness, injury, or pregnancy.}

_{References on the bidirectional associations between physical and mental health conditions}

_{1. Association Between Depression and Physical Conditions Requiring Hospitalization. Frank, P., Batty, D., Pentti, J., et. Al. JAMA Psychiatry. Published online May 3, 2023. https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2804269?guestAccessKey=5c50825e-9542-4cef-ac8a-1a85a9de46b4&utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_content=tfl&utm_term=050323.}

_{2. Pre-Existing and New-Onset Depression and Anxiety Among Workers With Injury or Illness Work Leaves. Gaspar, F., Wizner, K., Schott, F., et. al. J Occup Environ Med. 2020 Oct; 62(10): e567–e572. Published online 2020 Aug 5. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7537737/.}

Protect Your Paycheck With The Combined Benefit of Social Security Disability Insurance and Ticket to Work-Protect Your Income Campaign

Protecting Your Paycheck With The Combined Benefit of Social Security Disability Insurance and Ticket to Work

October 17, 2023
By Steve Perrigo Disability, Disability Insurance, Protect Your Income, Social Security Disability Income, SSDI, Uncategorized

By Steve Perrigo, Allsup Protecting your paycheck is more important than ever for most working Americans. The higher cost of everything from gas to groceries, plus high interest rates, make it a challenge to stay within household budgets. In these uncertain times, it’s important .. more »

By Steve Perrigo, Allsup

Protecting your paycheck is more important than ever for most working Americans. The higher cost of everything from gas to groceries, plus high interest rates, make it a challenge to stay within household budgets. In these uncertain times, it’s important to know the federal protections that are in place should you ever need them.

Nearly 160 million U.S. workers may be unaware of an important protection to their earning power. The combined benefit of Social Security Disability Insurance (SSDI) and the Ticket to Work Program supports individuals when they cannot work due to illness or injury, and offers significant incentives to return to the workforce when the time is right.

The Social Security Administration (SSA) oversees SSDI. FICA taxes are the insurance premium you pay to enroll in the program. Last year, $160.7 billion in net payroll tax contributions for DI were collected.

Social Security Disability Insurance

Despite paying into the program, many people don’t know they have earned SSDI with their FICA taxes. The program goes beyond monthly cash payments. SSDI unlocks a whole host of other benefits that can make a significant difference for those dealing with chronic illnesses or disabilities.

These include:

Monthly income. The average 2023 benefit is $1,483, and it maxes out at $3,627.
Medicare coverage. Medical and prescription drug coverage begin 24 months after SSDI cash benefits start.
Protected Social Security retirement benefits. Approval for SSDI triggers a Social Security earnings record freeze that can result in a higher retirement income.
Dependent benefits. SSDI approval can result in benefits for children under 18, adding up to 50% more to an individual monthly payment.
Annual cost-of-living adjustments. The COLA is evaluated annually and may raise your monthly income.

The Ticket to Work Program

Even fewer people know about the Ticket to Work program (TTW). According to a recent report from the SSA, almost one third of SSDI beneficiaries were unaware that they could keep their SSDI benefits and return to work.

TTW is an extension of SSDI. All individuals who receive SSDI are automatically eligible for TTW. It’s a free program for U.S. workers with disabilities that offers a safe path to try working again after their medical condition stabilizes. The Ticket to Work program offers substantial protections including:

Earn any amount. During the first year of the program, you can make as much money as you want and protect your full SSDI benefits.
No continuing disability reviews. Avoid Social Security’s disability reviews and the possible benefits termination that may result from a review.
Keep Medicare. While working, you can continue receiving Medicare for more than 7 years.
Benefits reinstatement. If you need to stop working any time within 9 years, your SSDI benefits restart.
It costs nothing. Social Security funds this program, so beneficiaries work with Employment Networks (ENs) at no personal cost. ENs help people with all aspects of returning to work.

There are many unfounded beliefs about SSDI. Some people think SSDI is a fund they’re paying into and, by taking SSDI, they will reduce the money they’ll receive in the future. This isn’t true. It is a federal insurance program and FICA taxes are the premium you pay to be covered. It’s actually better for an individual to take SSDI if they can’t work, because the program protects their future retirement income.

The combined protection of SSDI and TTW covers American workers at a vulnerable time. The income and other benefits it provides are a safety net when you can’t be sure how you’ll provide for your family. Ticket to Work completes the program by providing a path back to work when it’s medically advisable. The Ticket program has returned thousands of former workers to their livelihoods, or, with the help of ENs, found them a new career. You owe it to yourself and your family to be knowledgeable about protecting your paycheck with this federal insurance policy that you’ve paid into.

Short- vs. long-term disability insurance: How it works

November 17, 2022
By The Council for Disability Awareness Disability Insurance, Employee Benefits, Long Term Disability, Protect Your Income, Rock Enroll, Short Term Disability, Uncategorized

This article originally appeared on the American Fidelity Blog Understanding the differences between short- and long-term disability insurance can be tough and knowing which coverage is right for you is not always easy. However, disability insurance can be an essential part of a solid financial .. more »

This article originally appeared on the American Fidelity Blog

Understanding the differences between short- and long-term disability insurance can be tough and knowing which coverage is right for you is not always easy. However, disability insurance can be an essential part of a solid financial plan, so it’s important to understand your options.

What is disability insurance?

Disability insurance is designed to help protect you and your family financially if you become unable to work due to a covered injury or illness. When you use disability insurance, you receive a portion of your gross monthly earnings. This could help you focus on your recovery and worry less about bills or other expenses that may be difficult to pay without financial support.

Understand the importance of disability insurance

What is the difference between short- and long-term disability?

The main differences between short- and long-term disability insurance are the amount of time until the benefits begin and how long the coverage lasts. Both insurance plans are designed to help provide income protection while you are disabled. Let’s look at how each plan can benefit you, depending on your situation!

Short-Term Disability Insurance

Short-term disability insurance is designed to help protect your paycheck for a shorter period. Depending on your covered disability, this plan may provide benefits to help you for a few weeks or a few months, usually no longer than one year. The coverage may not be long-term, but the elimination period is usually only 7 to 14 days. For example, suppose your elimination period is 14 days. In that case there will only be 14 days from the date you first suffer a covered disability and the date you begin to receive benefits.

Here are some common reasons you may use short-term disability insurance:

- - - - Injury from a major accident
        
        Disability associated with the delivery of a child
        
        Upcoming surgery and recovery time
        
        Experiencing bad side effects from medicine or medical procedures

Long-Term Disability Insurance

Like it sounds, long-term disability insurance can help protect your paycheck for an extended period. If you are looking at a longer recovery or a more serious condition, this is where long-term disability insurance is useful. Depending on your specific plan you may receive benefits if you remain disabled for up to two years, five years, ten years, or even to social security retirement age.

Here are some common reasons you may use long-term disability insurance:

- - - - Heart disease, cancer, diabetes or stroke
        
        Mental illnesses
        
        Muscle, back or other joint pains
        
        Arthritis

What To Consider

How long can you go without a paycheck? How many sick days does your employer provide? These are two fundamental questions to ask yourself when deciding between short- vs. long-term disability insurance and choosing an elimination period. Suppose you cannot go over a month without a paycheck and only have ten sick days. In that case, we suggest you consider enrolling in both, so you are prepared for the unexpected and have options to help you have financial protection. On the other hand, if you can go months or even a year without a paycheck, then long-term disability insurance with a longer elimination period may be enough for you. Talk to your American Fidelity account manager to discuss the best options for you!

Position Individual Disability Income Insurance Effectively

November 10, 2022
By Scott McCarthy Disability, Disability Insurance, Employee Benefits, Personal Finance, Protect Your Income, Rock Enroll, Uncategorized

Scott McCarthy, Regional Vice President, Sales & Distribution, Ameritas Life Insurance Corp. Managing and understanding risk is not a strength for many people. It’s also why financial professionals need to be effective at helping clients make changes that address long-term financial needs. Changing the conversation .. more »

Scott McCarthy, Regional Vice President, Sales & Distribution, Ameritas Life Insurance Corp.

Managing and understanding risk is not a strength for many people. It’s also why financial professionals need to be effective at helping clients make changes that address long-term financial needs.

Changing the conversation

In discussions with colleagues, I frequently comment on the need to change our client conversations. I feel that we need to recognize there is a gap between what people do or think based on their feelings versus what people do or think when operating based on critical thinking. The following examples can help us understand what we’re up against and how that can help us have better conversations.

Example one

There’s an anxiety and fear for many people when taking commercial flights. Whether the flight is short or long, there is a deep concern about safety. Many statistics show travel by car on public roads is far more dangerous both in terms of injury and death, yet the fear of flying is greater.

Example two

In the financial world, if we asked working individuals with a retirement account or investments for a basic axiom of investing, the phrase “buy low, sell high” would likely be a popular response. It is understood that it’s best to take advantage of dips in the market to buy assets when prices are at their lowest and acquire a profit by selling when prices are at their peak. But time and time again, when faced with rising markets the population’s appetite to get in on the gains means buying high. Market drops are met with selloffs instead of investments as people try to get out before prices hit bottom. Common knowledge goes out the window.

Approaching clients about insurance products can be some of the most challenging conversations. The main enemy is inertia. Often these conversations are addressed with a client who does not feel a need for life or disability insurance partially because they’ve lived without it up until now and, in most cases, without giving a single thought about either product.

The only way to effectively move clients from the “it’s all good” mindset is to disrupt their understanding and then educate. There are different ways to go about this, but the process begins with making the client aware that you can help them address problems they haven’t yet thought of – problems that could disrupt their future and the future of their family. With life insurance, it’s a little easier since the idea of having life insurance when you start a family has moved into the realm of common knowledge for many.

I know many financial professionals who effectively have conversations positioning life insurance as a valuable piece of a financial plan. As someone who spends most of their time working with disability insurance, I find this much like addressing someone’s fear of flying while not dealing with the risks of getting in a car for the morning commute. The chances of individuals passing away during their working years are much less than their chances of suffering health issues which can interrupt their ability to work.

Seeing the need before you need it

Clients need to understand a health issue can disrupt their ability to work because once it happens, it’s too late to address it with an effective solution. A key to attaining individual disability income insurance is being healthy enough to qualify. This syncs with our second example. If individuals feel fantastic and their health is at its peak, it can appear to be the worst time to pursue coverage for their health. It’s like asking them to “sell high” in a sense. On the flip side, there have been many times I’ve had to inform producers their clients were ineligible for coverage due to an ongoing health issue. When their health is at its worst, the conversation about protection is easy. I think this understanding is important as we prepare to talk about how disability insurance can help improve clients’ futures.

The education we share with healthy satisfied clients when addressing a need that doesn’t feel urgent should be focused on the risk they carry and the benefit they gain. Many clients are not thinking an unexpected change in their health could interrupt their ability to work and negatively impact the future they were planning for.

Many Americans today rely on self-funded retirement plans like 401(k), 403(b) or other tax advantaged investments to build money for the future. Once the short-term savings are gone, the next set of funds available during an income disruption is going to be the retirement fund(s). Clients are not likely thinking of this but need to be aware of this before discussing the solution an individual disability income policy can help provide. Individual disability income insurance is unparalleled as an efficient way to provide a stream of income to help maintain a current lifestyle without having to deplete assets.

The tipping point

The ability to protect the retirement assets in an unexpected challenging time is a potential tipping point and well-informed clients are likely to take the next step to work with a financial professional to build a plan that includes a disability income insurance policy, if they want to shield their retirement. There will still be those willing to bet on their continued good health but all we can do is continue to educate and bring awareness at future client meetings or annual reviews.

It’s tough to ask people to go against their gut instincts without an appeal to reason. Taking the time to inform and educate clients so they can see the problem and want to fix it is a good approach to help them move past their first instinct. From there, a strategy can be crafted and put in place.

I had a glass paperweight that I kept on my desk but have since lost over the years. The message etched on it frequently comes to mind and summarizes in simple terms my message above, “seek first to understand then to be understood.”

Autumn’s Story: An Inspiration

November 8, 2022
By The Council for Disability Awareness Disability Insurance, Employee Benefits, Personal Stories, Protect Your Income, Uncategorized

Editor’s Note: In 2017, Autumn attended the Route 91 Harvest Festival in Las Vegas, and her world turned upside down. One of the many victims of the tragedy, Autumn was seriously injured and found herself facing a long recovery. “I woke up and was wired .. more »

“I woke up and was wired shut,” she said. “I had a tracheostomy because the blocked airway. I had a huge scar down my stomach where they had done the exploratory surgery.”.

But, despite her injuries, Autumn didn’t give up hope. That first day, she got up and walked. And, after 48 days, Autumn left the hospital.

What follows is the transcript from a video compiled by The CDA’s member company, American Fidelity, of Autumn describing her experience with an unexpected disability. Scroll down for the video.

Will I See My Babies Again?

I was on the ground, you know? I remember what the concrete felt like below me. I have that very vivid memory of like I’m going to die and I’m not going to see my babies again. And that was what was going through my head.

We’re Not Dying Today

I was hit very quickly during the shooting:

- - - - I was shot in shot in the face.
        
        I was shot again in the back.

We got up, continued moving and we almost made it to first aid. And I was shot a third time in the hand. And the whole time my husband kept repeating over and over again, like we’re not going to die today.

Autumn’s husband: We’re not dying today. This isn’t going to happen. And I kept trying to tell her, I was like this isn’t happening. We’re not dying today. This isn’t going to happen.

I’ll Be Fine

I remember when we turned down the street and the lights were red and blue bouncing off of the buildings. And I remember thinking I’ll be fine. And we’re driving on the sidewalk on Vegas Boulevard, up and down just trying to get through the traffic. And like there was always this like no I will be fine. Like this is, I’m going to be fine.

I Woke Up 5 Days Later in the Hospital

Autumn’s husband: We got there within, I don’t know, in a minute maybe. Got out, got my wife out, helped the others down. And by the time I turned around, my wife was gone

And I woke up five days later in the hospital.

Autumn’s husband: Everybody that had ID, we’ve reconnected with their family. Now we need to reconnect those of you who do not have their IDs on them. And they took me up to ICU, cardio ICU and from me to about a good 50 feet away, I could see straight away it was my wife and that’s where I found her. And relief, but still fear not knowing exactly what I was

getting into because the last I’d seen her, she was in a wheelchair being wheeled away from me.

I woke up and I was wired shut. I had a tracheostomy because the blocked airway. I had, um, a huge scar down my stomach where they had done the exploratory surgery.

Autumn’s husband: And they said do you have any questions? I said, I just have one. So you are telling me this is going to be okay. You are telling me this is going to be okay. And that in two to three years, we’re going to be fine. May not be back to where we were, but you’re telling me I’m going to be able to sit on a couch with my wife and watch movies with my kids. And they said, absolutely.

I Want to Go Home

I have a therapist from Las Vegas who walks in. I am hooked up to every tube you can imagine. I have not gotten out of bed in six days now. And she just looks at me and says like: “Well, what do you want to do?” So I wrote on my board I want to go home. And she said, you have to get out of bed. And so I said, okay.

And, so, that was sort of what began this process of that first day, I walked three times the first day and then haven’t said no to a therapist since.

I Have Very Good Disability Insurance

I didn’t have the added stress of: “I have to get back to work.” So, for me, my daily struggles with everything that I was struggling with, I didn’t compound with this idea of: “Well, I have to get back to work because I have to bring in an income.” I have very good disability insurance. I’m able to focus every day on my own recovery.

Autumn’s husband: It’s saved us. There’s no doubt that, without it, we’d be in a boatload of trouble.

There was this immediate response of like caring and it wasn’t even necessarily about: “Oh,

you don’t have all the paperwork filled out correctly.” It was about: “Okay, well what else do you need? What else can we do? And do you have all this? And did you know you also have this? Make sure we file everything for her being in the hospital because there’s a benefit for that.”

Disability Insurance is Worth It

It’s worth it. The peace of mind, one less Starbucks is, is perfectly fine. Whatever it may be. I get it. It may be a pinch, but it’s, it’s worth it.

My children didn’t have to stop dance class. My son didn’t have to stop, you know, baseball. There were all these little things in life that we go about doing our everyday lives, that didn’t have to stop that if I didn’t have an income coming in, those would have been the first things to go.

To be able to kind of continue the quality of life that they were used to without any of that having to change was, I mean, for me that’s what’s been most worth it.

But the peace of mind of knowing that in a moment your life can be turned upside down. It can flip you sideways. You have no clue.

And then to know, when I called that, oh my God, I do have this and I don’t have to worry because for right now, my finances will be taken care of.

Autumn’s husband: Yeah, you don’t expect a company wanting to give more out of their pocket to someone but with the carrier they were very much of like: “Nope, here’s everything we can get for you and we want to give you everything that we can.