A financial plan can significantly ease financial stress for the 56.7 million Americans who have a disability, according to a new report from BMO Wealth Institute.
The report reveals that, as the population ages, the percentage of Americans who will become disabled will rise. Currently, 70.5 percent of Americans 80 years old or older identify themselves as having a disability, with hearing loss, mobility issues and memory loss being among the most prevalent.
“Given that the chances of someone becoming disabled increase as one gets older, it’s important that individuals are aware of the potential challenges they can face,” says Stephen Williams, vice president, U.S. Financial Planning Strategy, BMO Private Bank. “Specifically, Americans should understand how disability can affect one’s personal and financial situation. Planning for the possibility of a disability should be a consideration in any financial plan to help safeguard individuals and their families from the unexpected.”
Williams adds that few Americans have factored in the financial repercussions that can arise from having a disability or caring for a family member who becomes disabled. The combination of reduced income and increased spending to cope with a disability can derail a financial plan. For example, a plan on track to last until at least the age of 90 could see all savings exhausted by the age of 77.
The report stresses that both individuals living with a disability and those caring for them need to manage their financial well-being. To get the most financial benefit, one needs a well-constructed financial plan that uses a variety of tools. The report highlights that having a will and effective powers of attorney are key components of a financial and estate plan that, when used properly, can improve the financial situation of those dealing with disabilities.
The BMO Wealth Institute report also finds that Americans believe employers have an important social and legal responsibility to accommodate people with disabilities. The report notes that unemployment rates are higher for those with disabilities (13.4 percent), compared to those without (7.9 percent). The major barriers to employing persons with a disability are lack of education or training, lack of transportation to the workplace and the physical environment of the workplace.
Read the full report here.