Guardian Disability Insurance Brokerage

Protect Your Nest Egg
Disability Insurance For Retirement Assets
by Thomas Lloyd

There's an increasing trend of more business professionals in the workforce obtaining their own portable disability insurance policies. Many are forced to take this path when their employer's plan has been terminated, or they are a fee-for-service professional with no employer provided plan in place. The understanding of coverage to protect income is clearly planted into the minds of these individuals who rely on their ability to work as the basis for providing safety and protection to themselves and their families. One other consideration though seems to be overlooked - retirement savings.

Think about it - you have a policy to partially replace your income, but what about the contributions you make into an IRA or 401(k) plan? Do you really believe there will be enough from your policy’s monthly disability benefit to pay all non-discretionary bills (mortgage, utilities, food, clothing), plus a sufficient portion to place into your retirement fund? In most cases this is simply not possible to achieve the level of savings necessary to properly fund retirement.

Luckily, there are disability insurance programs available to protect for this exact purpose. They are designed to help replace your retirement contributions in the event of a total disability. While disabled (and not working), a disability insurance policy pays benefits into a trust. Proceeds from the trust are available at age 65 to supplement any other retirement savings you may have. Clearly if you are a young professional such as a physician, lawyer, consultant or executive with very high income earnings, such a well-rounded financial plan is imperative. Many of us, including myself, hate to believe they will be the one that suffers a disability but the statistics don't lie and suffering a lifetime disability at the age of 35 can prevent an individual from earning and saving hundreds of thousands of dollars toward retirement. Make a smart choice today and look into this type of coverage.