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Planning for Unplanned Retirement.

"Life," someone once said, "is what happens when we are making other plans." MS can mean that the time may arrive when you need to adjust to a different life, one with less or no gainful employment.

What steps can you take to ensure that this unavoidable reality doesn't translate into a financial disaster? How can you replace the income and benefits your job brings? When retirement is forced by the progress of MS, or, indeed, any other disabling condition, there are 3 sources of income.


If you are lucky, you work for an employer that provides insurance that pays an income if you have to stop work because of disability. (These benefits are most commonly provided by big companies or the government.) Or you purchased a private disability policy prior to diagnosis.

Typically this insurance provides about 60% of your income for the first year or so if you are unable to do your former job. After that, you continue to draw benefits if you remain unable to do any kind of work. Be aware that disability insurance benefits are usually reduced if you have income from Social Security, workers' compensation, or just about any other earnings, except investment income.

From a planning point of view, you would be smart to consider the availability of disability insurance in deciding what jobs to take or keep. If you have the choice between a job with better pay and one that gives you disability insurance, having MS ought to make you think seriously about opting for the second, even if the job pays less. Be sure to check for limitations in the coverage, such as preexisting condition exclusions and a waiting period.

You may also buy a private disability policy, but if you already have a diagnosis of MS, a policy will be hard to find, may have limited benefits, and will be expensive.


This is a government program that pays you benefits based on the Social Security taxes you've paid during your working life. To qualify, you must be unable to do any kind of work for which you are otherwise qualified because of your physical or mental symptoms. Benefits are usually significantly less than either your wages or what you would be paid by a disability insurance policy. Your eligibility for SSDI usually lasts for 5 years from the time you stop work. Accordingly, if you are thinking about dropping out of the workforce or going to work for an employer that does not participate in Social Security, like some local governments, think carefully about where your MS seems to be headed.

Request a copy of your Personal Earnings and Benefit Estimate Statement from your local Social Security office, or by calling 800-772-1213. This report will tell you whether you are presently covered for SSDI and the approximate amount of your benefits. SSDI benefits may not be overly generous, but they are a lot better than nothing.


If you are like other Americans today, you and your partner are spending up to or beyond your income, even with both of you working full-time. Last year, the savings rate for Americans was less than zero. This means that people are dipping into savings or going into debt to meet expenses. Bad for them, and possibly worse for you. How much money would you need each year to replace income from your job, after taking into account the sums you expect to receive from disability insurance or Social Security? The amount will seem pretty awesome.

The plan

If you think you might need to retire at age 55, for example, take the number of years between your present age and 55, and divide that number into the amount of money you are going to need when you quit. Divide that number again by 12 and you will see what you need to deposit each month in a savings program. This could be a tax-favored retirement account such as a 401(k), a Roth IRA, or just an old-fashioned bank account. Wherever you make the deposit, treat this sum as the first priority to be taken off the top of your paycheck, the same way the government takes your income tax. We call this "paying yourself first." The sooner you start this, the sooner you will get the benefit of the minor miracle of compound interest. For example, $2,000 deposited in a Roth IRA each year at 7% for 20 years will put over $80,000 into your retirement kitty.

Medical insurance

As part of any sensible retirement plan, you need to factor in how you will handle the costs of medical care.

Your current medical coverage may be through your employment, your partner's employment, or a private policy. Will the coverage continue after you stop working? You should understand what kind of coverage you have and what the benefits are, such as choice of doctors and clinics, and drug coverage, and you should understand the costs for premiums, co-payments, and deductibles. Find out whether and how you can obtain additional coverage through your partner, even if that results in duplication. It could ensure that you do not go uncovered in the future.

Thanks to legislative reforms in recent years, there should be some kind of medical coverage available to someone with a history of MS no matter what state you live in. Typically, an open enrollment HMO or a high-risk health insurance pool is available. Premiums, deductibles, and co-payments can still present problems, but they may not be insurmountable. For example, a 50-year-old nonsmoking woman with MS in North Texas would pay $400/month with a $500/year deductible to join that state's high-risk health pool. Rates in other states and for other kinds of coverage vary.

Many people facing early retirement on disability need to become eligible for Medicare. It is available to everyone who qualities for SSDI. But you can't receive Medicare until you have been eligible for SSDI for 24 months. SSDI begins only after a 5-month waiting period from the date of disability. Moreover, your SSDI application may be rejected initially Most people get benefits only after reapplying. You need to be prepared for a significant gap in medical coverage. COBRA benefits through your former employer will provide 29 months of medical coverage, but you will be responsible for paying the premiums.

Medicare now offers many plans, including HMOs, PPOs, and private fee-for-service. Some but not all of these models may cover part of outpatient prescription drugs. People with low incomes and low assets who qualify for disability benefits under Supplemental Security Income (SSI) are immediately eligible for Medicaid, which includes drug coverage.

Medicare and Medicaid are subject to change. For the most current information call: 800638-6833 (for beneficiaries) or 800-633-4227 (for general information). For help via the Web, go to <> and <>. (The Health Care Financing Administration is the federal agency that regulates them both.)

You may also want to check out <thomas.loc. gov>. This site follows legislation related to health care, disability, and other issues. For example, the Work Incentives Improvement Act was passed by Congress in November. It allows SSDI and SSI recipients who return to work to retain Medicare or Medicaid coverage.

Compare your options and consider all medical insurance possibilities, including group coverage through professional, fraternal, academic, or other affiliations. Your state Board of Insurance or Insurance Commission may be able to help. If you use an agent, we recommend working with an independent agent who sells policies for more than one company.

Setting priorities

Many people despair when they hear the bad news about the need to increase their personal savings. It's common to feel saving is impossible. "I have too many demands--my partner, children, medical expenses, home, lifestyle!" But when retirement comes about as a result of unavoidable problems, you will find your priorities changing and the lifestyle that now seems so indispensable becoming less relevant. After you have done all the planning your circumstances allow, you will find it is possible to live on the income you have left.

Planning for this reality may mean that you will want to start now to develop a lifestyle based on the income that you expect to have if you are no longer able to work. Issues such as where you live, what kind of car you drive, the entertainments you purchase, even the schools your children go to begin to fall into place when you realize that being successful has to do with your family relationships, your friends, your community, and your own sense of self-worth.

Attorneys Lanny and Sara Perkins are the authors of Multiple Sclerosis: Your Legal Rights, a comprehensive guide to the legal and financial problems of people with MS, covering insurance, job discrimination, travel, debt, taxes, and working with lawyers and doctors.

Demos Medical Publishing, 2nd edition, 1999. $21.95 plus $4 shipping and handling. Write: 386 Park Avenue South, New York, NY 10016; call: 800-532-8663; e-mail: <orderdept >.
COPYRIGHT 2000 National Multiple Sclerosis Society
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Title Annotation:life planning for people with multiple sclerosis
Author:Perkins, Sara
Publication:Inside MS
Date:Jan 1, 2000
Previous Article:On the Job with Multiple Sclerosis.

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