Don't underestimate your odds of becoming disabled, the results of a new study warn.
According to the Council for Disability Awareness, misinformation combined with poor planning can seriously threaten the financial security of American workers and their families.
A 30-year-old worker faces a one in three chance of suffering a disability at some point in his or her career, and the odds grow with age, according to a July 2004 report from the America's Health Insurance Plans, a national association representing almost 1,300 health insurance providers.
CDA released the results of its 2007 disability awareness survey earlier this week.
Nine out of 10 workers surveyed by CDA underestimated their own chances of experiencing a disability -- an accident or illness that would keep them out of work for at least three months -- and nearly 30 percent admitted they haven't thought about how they would manage with a disability.
A 35-year-old worker earning $50,000 would lose over $400,000 of retirement benefits if impaired with a disability, according to AHIP's estimates.
"Preparing for an unexpected disability has never been more important for America's workforce n especially as more American workers are suffering from income-limiting disabilities that can leave them and their families vulnerable to severe hardship," said Robert Taylor, CDA's executive director said in a press release Wednesday.
Social security disability lawyer Jeffrey Rabin, principal at the Des Plaines-based Jeffrey Rabin & Associates Ltd., said that workers purchase life insurance but seriously miscalculate their chances of suffering a disability and fail to plan for the out-of-pocket expenses.
"There is a far greater chance that you will be disabled than die," he said.
"And if you become disabled, you still have to pay rent and buy gas."
The number of disabled American workers has grown an average of 4.3 percent annually since 2003, according to the most recent data from the U.S. Social Security Administration. There were 6.8 million disabled workers on the payroll in Dec. 2006, up 15 percent compared with 5.9 million in Dec. 2003.
The government is spending more on disabilities, too. The SSA dispersed $7.2 million in monthly disability benefits during Decemeber, up 31 percent from $5.5 million in December 2003.
While applying for social security disability insurance is free, people can be faced with paying thousands of dollars in medical and living expenses without income as they wait for their applications to be processed, Rabin explained.
The financial challenges become even greater for those who are denied. In 2005, more than 1.3 million workers -- more than half of the 2.1 million who applied for SSDI benefits -- were denied, according to SSA data.
Rabin also warned that workers are not the only ones underestimating the potential costs.
"The people most left behind in the United States when they become disabled are actually stay-at-home moms," he said. "I get calls from women who have been diagnosed with breast cancer, fibromyalgia and multiple sclerosis" and they often fail to meet SSDI's requirements, which specifies that an applicant must have worked within the five- to ten- year period before filing, depending upon her age.
