Saving for the Future: Helpful Tips for Disabled Individuals

By Ed Carter

The future is uncertain, and a disability that will impact your future health and well-being makes things ever murkier. Now is the time to start saving to ensure you get the care you need when the time comes. Saving money becomes a little more difficult when you factor in maintaining your eligibility for disability benefits, but the following tips offer a few surefire ways to start saving now.

Get Serious About Budgeting

Setting and sticking to a budget is one of the most obvious ways to save money, but many people struggle with it. On a free weekend, gather up every single financial statement including electronic/paper bills, receipts, pay stubs, bank statements, and any other documents related to income and expenses. Use a budget worksheet to list all income post-taxes as well as expenses, then identify ways to pare down. You might also benefit from a budgeting app to track your spending 24/7. It might be hard at first, but sticking to it is the key.

Create an ABLE Savings Account 

An ABLE Savings Account, according to NOLO, is a unique bank account for disabled individuals “where the funds don’t count as assets or resources for the purpose of SSI disability benefits or Medicaid.” You can set aside funds without losing your eligibility, with a limit of $15,000 in added funds per year and a $100,000 limit overall. If you designate a working relative as a beneficiary, they can contribute as well and it won’t count toward the yearly limit. In order to be eligible, you must have a disability that started before age 26 that has been medically diagnosed.

Consider Enrolling in Medicare

While Medicare is traditionally for those 65 and older, there are coverage options for certain disabilities for those under 65, including ALS and End-Stage Renal Disease. In addition, if your Social Security disability qualifies you for Medicare, you will receive automatic enrollment in Parts A and B after you receive benefits for two years. You may also be able to enroll in a special type of Medicare Advantage plan called a Special Needs Plan. If you qualify or think you might, this guide details how to sign up and look up plans specific to your state.  

Explore Disability Insurance Options Through Your Employer

You’ve likely heard of short-term disability insurance, but there is long-term disability insurance as well. This insurance replaces between 40 percent and 60 percent of your base salary. The benefits stop if your disability ends, but if the disability is permanent, the benefits will end after a set amount of years or when you reach retirement age. There are various ways to obtain disability insurance, one of which is a long-term plan offered through your workplace or through an outside insurer that your employer brings in. The best route is to purchase through work to take advantage of group discounts, but you can purchase your own private coverage (although it is pricier). You can even purchase a plan if you are self-employed.

Set Up a Special Needs Trust

In previous years, setting up a special needs trust meant relying on a parent/guardian, grandparent, or court-appointed beneficiary for help, becoming a conflict of interest when you are an independent adult who can handle your finances yourself. With the passing of the Special Needs Trust Fairness Act, you can create your own trust. With a special needs trust, the trust assets don’t affect your disability eligibility. While you can certainly have a family member set up a third-party special needs trust for you, you can create a first-party trust. According to CNBC, a first-party special needs trust can be used by disabled adults who “who accumulate assets before the onset of a disability or receive assets after qualifying for Medicaid and SSI.”

No one knows what the future holds, and it can leave you with an uneasy feeling. Start planning for your future care and well-being by employing various methods of saving now. With a little bit of sacrifice and planning now, you’re securing your future, whatever it may bring.

(Ed Carter can be contacted at ed.carter@ablefutures.org or Ablefutures.org.)