The biggest concern most Oregonians have about the Social Security Administration is whether its retirement benefits system will be solvent enough to still be cutting checks by the time they quit working. While those concerns are no doubt justified and important, the SSA estimates that one out of every four of today’s 20-year-old workers in Oregon will need to apply for Social Security Disability Insurance benefits before they reach the official age of retirement and can begin collecting Social Security checks.
As alarming as that statistic is, a new study conducted by researchers at the State Farm Center for Women and Financial Services at The American College suggests that a bigger problem might be posed by Americans’ lack of accurate knowledge about disability and lack of preparedness for unexpected disabilities, in general.
Among their findings:
The overwhelming majority of participants, 97 percent, could not identify the leading cause of disability. (Arthritis is the leading cause; 95 percent of all claims are caused by chronic illnesses and conditions.)
The largest group of those respondents, 30 percent, identified “accidents” as the leading cause of disability. (Accidents are responsible for only five percent of disability claims).
Most participants lacked the financial plans or resources to deal with a sudden disability.
(Overall, more than 70 percent of the study’s participants planned to replace income lost due to a disability with money from savings accounts, which most admitted wouldn’t last six months.)
Less than 10 percent of the study’s participants had purchased an individual disability policy from a private insurer. (In fact, 46 percent of the men and 61 percent of the women who participated in the study had done no research on disability insurance.)
With these numbers in mind — and given the length of time it can take to get a claim for Social Security Disability benefits approved by the SSA — you may want to consider working with a financial advisor, accountant or attorney to develop a plan for this contingency, if you haven’t done so already.
Source: Milwaukee Journal Sentinel, “Disability: What you don’t know can hurt you,” May 10, 2012