Disability protecting your nest egg

From Paul G. Provencher, CRPC Special to PRIME With so many families trying to make the most of their take home pay, it is easy to see why retirement planning is considered as automatic as a daily paycheck deduction, or something we think we can worry about later. What if suddenly, you couldn't work? While everyone has a different retirement savings path, the one thing everyone has in common is the desire for a comfortable retirement. That's why it is surprising that many people leave their greatest asset their ability to work and earn an income unprotected should they become disabled. And the consequences can be staggering, to the point of retiring later or living on much less than you're planning to. The financial impact of a disability can go beyond giving up luxuries such as dining out or taking vacations. That's because most employer-provided group long-term disability insurance plans only replace up to 60 or 70 percent of an employee's salary, are taxable, and exclude bonuses and commissions. But many people don't even consider the fact that their ability to contribute to their retirement savings plan may end if they become so sick or hurt that they are left unable to work and earn an income. The fact is this a long or short-term disability could sidetrack your retirement. It is easy for many of us to put the discussion off, especially during prime earning years when expenses such as a mortgage, education and vacations seem more worthy of our attention. However, protecting your income and saving for the future are important at any age. Anyone can be disabled at any time The leading contributors to a disability don't always discriminate based on age and aren't always within a person's control. In 2003, the World Health Organization reported the leading contributors to disability included road traffic accidents, alcohol use, cardiovascular disease, major depression, and ischemic heart disease. How to protect your nest egg Start with an evaluation of your disability insurance. Until you retire, consider disability income insurance coverage as a way to protect a portion of your income should you become disabled. To determine your current level of protection, learn more about your employer-provided disability insurance plan and outline your personal finances. Make that evaluation personal. Considering what could happen if you needed to rely on your disability income insurance coverage and how it can protect future income is a tough concept to grasp at first, but there are several online tools and calculators on halfapaycheck.com that can be personalized to make the process quick and easy. Protect yourself today. Some insurers offer individually-owned supplemental disability income insurance protection through worksite programs. This coverage (that may be available with discounted premiums) helps fill the shortfall gap and can include protection for retirement contributions and employer matches of those contributions if you are disabled. If this coverage isn't available at your employer, consult a financial professional. It's never too late to start saving, and to protect your ability to continue to make retirement contributions if you become disabled. It's vital to understand how bumps in the road can impact your retirement plans, and what you can do to help safeguard yourself and your family. Tools like those found on halfapaycheck.com gives visitors the convenience of quickly and confidentially calculating how their household income would be impacted by a disability, determine if there would be any money left for retirement savings contributions, and how you can plan ahead for the unexpected. Paul G. Provencher, CRPC, is located in Wilbraham, MA. Financial information is available by calling Paul at 413-596-0000. Paul Provencher is a Registered Representative of and offers securities and investment advisory services through MML Investors Services, Inc., Member SIPC 1500 Main St., 12th floor, Springfield, MA. 01115, (413) 781-6850. Provencher Financial Services is not an affiliate or subsidiary of MML Investor Services, Inc.C: 67603