4 things millennials need to know to protect their financial future
(BPT) - More than 100 million working Americans have no disability coverage other than Social Security Disability Insurance (SSDI). Millennials - now the largest part of the workforce - may be most at risk. Millennials are least likely to have disability coverage offered through their employers or private insurance providers, and most don't understand long-term disability insurance, according to a recent insurance industry study.
However, one in four 20-year-olds will become disabled before they retire, as noted by the Council for Disability Awareness. This is a reality many boomers are experiencing firsthand. Nearly 75 percent of all individuals receiving SSDI benefits today are between the ages of 50 and full retirement age, according to the Social Security Administration.
Life perspectives can be different for millennials, born in the early 1980s to early 1990s, when compared to boomers, born in the 1940s to early 1960s. But there are several practical steps that millennials can take to ensure they are prepared should they experience a disability, says Tricia Blazier, personal health and financial planning director for Allsup.
Understand SSDI eligibility.
Not everyone is eligible for Social Security Disability Insurance benefits. As the name implies, it's insurance and individuals must have worked and paid into Social Security through payroll taxes for five of the last 10 years in order to qualify.
They must also have been disabled before reaching full retirement age, which is 67 for anyone born in 1960 or later. Finally, they must meet Social Security's definition of disability, which means they aren't able to work because of a mental or physical disability that has or is expected to last for at least 12 months, or to result in death.
Know the benefits of SSDI.
Eligible workers last year received an average monthly SSDI income of $1,166. More than half of beneficiaries receive monthly benefits in the range of $700 to $1,400. SSDI income does not replace a full-time wage, but it's an important safety net for the more than 10 million workers and their dependents who rely on it, says Blazier. She added that dependents and spouses may be eligible for additional income benefits averaging a few hundred dollars a month.
She also notes SSDI includes additional support. For example, individuals become eligible for Medicare 24 months after their cash SSDI benefits begin.
Particularly important for younger workers, return-to-work incentives are also available to SSDI recipients. These incentives allow individuals to attempt work through the Ticket to Work program, while still providing disability benefits for a period of time. SSDI also includes provisions to protect a person's future retirement benefits.
Apply for and secure help getting SSDI benefits as soon as possible.
The SSDI application process can be confusing and frustrating. Most people who apply are initially denied. Those who appeal face a national backlog of more than 1 million claims.
"Getting expert help at the very beginning of the SSDI application process increases a person's chance of being awarded at the application level," explains Blazier. "They will have their benefits faster than the months or years many people must wait if they have to appeal."
Participate in employer-provided long-term disability coverage if available.
Some employees are eligible for employer-provided or subsidized long-term disability coverage. Many of these policies have provisions that require individuals to also seek SSDI, Blazier notes. Therefore, even if employees have private coverage, it's important they understand their SSDI eligibility requirements and benefits.
For more information on SSDI eligibility and benefits, call the Allsup Disability Evaluation Center at (800) 678-3276 or visit Expert.Allsup.com.