It’s not surprising that the economic recession that began in late 2007 has psychologically affected wage earners and caused significant erosion in consumer security and confidence.
Fortunately, the overheated spending patterns, low savings rates, and risky investment practices that contributed to the recession seem to have dissipated. Many workers have realized that they are personally responsible for their own financial well-being, and are seeking a more realistic approach to their personal financial futures. Personal savings rates, for example, topped 4 percent in 2009, reaching the highest rate in 10 years.
The key to an individual’s future success, however, hinges on their ability to generate and sustain revenue streams despite potential risks. One significant financial risk that every American worker faces is the risk of losing all or part of their income as a result of illness or injury. Studies by the nonprofit Council for Disability Awareness (CDA) demonstrate that
- Workers consistently underestimate their risk of becoming disabled for a sustained period of time;
- Most workers have not appropriately planned appropriately for the possibility of a sustained loss of income resulting from illness or injury
- Most have very little savings or other means of paying their bills should their incomes be interrupted for even a short period of time.
Of course, individuals can reduce their chances of illness or injury by embracing a healthier lifestyle. However, even the healthiest individuals are not without risk.