I've been seriously considering going out on long term disability through my work plan. They would pay 60% of my salary. It isn't near enough to meet our expenses though.
Has anyone done this, and what were some creative things you did to make your monthly expenses lower?
(I'm thinking mainly mortgage for me!) We JUST bought our house last year before I was diagnosed, and it's decreased in value since then. So a refinance is out unless I withdrawal all my money from my 401K plan. (This way we wouldn't have to pay PMI -- if I don't do that, I could still refinance but I'd have to pay PMI since our mortgage is now more than 80% of what the house is now worth).
But then I think, do I really NEED my 401K plan anymore? I'm seriously thinking of doing this.
Anyone have advice or tips?
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Long Term Disability through work? (anyone?)
- By ReneeK1
- Posted March 26, 2009 at 4:27 pm · 16 replies
- In Financial and insurance issues
- Shared with the public
- Edited March 26, 2009 at 4:45 pm
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- By FavoriteAunt
- Posted March 26, 2009 at 4:58 pm
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After my surgery, I was on short-term disability for 6 months. Then, was on long-term for only 1 month. Technically I could have gone back to work then, but didn't want to. Since I qualified, I wound up taking early retirement a few months later. That's always a tough call. Be sure of how long they will let you be on long-term since they can be kind of strict/stingy (depending on which group is handling it for your firm). My employer was great with the short-term, but an outside agency handled the long-term and I had to deal directly with them rather than my employer.
I'm no financial consultant, but I know I would hang on to that 401K if possible. You'd have to pay a penalty and tax on it, and the tax-deferred benefits do make a difference. If your husband has one too, that could make a difference. I just think it's hard to rebuild what you already have, especially in tough financial times. Naturally, everyone has a their own needs and it is a very personal decsion.
I hope you can reach the best decisions for you. It's hard enough to be fighting cancer without having to deal with financial issues too. Enjoy that new house!
- By ReneeK1
- Posted March 26, 2009 at 5:07 pm
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FavoriteAunt, I would have to deal with a separate company. But my own company said the terms were "indefinite" as long as the doctor recommends it. So, pls tell me about your experience with this outside company -- what was it like to deal with them directly? Did you have to get frequent approvals? Are they monitored by the employer at all?
- By jeaniet
- Posted March 26, 2009 at 7:38 pm
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Renee---god, it just makes my brain hurt to think of all this stuff. I got short term for a few months, then early retirement, but in addition to early retirement I am getting long term for 1 year. It is only $100 a month though. Both the short term, and long term were handled by the same outside company. It was a pretty easy process. Not any monitoring/checking/approvals done (that I know of) after they heard diagnosis of Stage 3C.
Since I got the early retirement, the long term checks come automatically---no monitoring/approvals needed. But my year is almost up so the $100 will stop soon.
Although I am thankful beyond measure for the early retirement, it is harder to make do with less than what we had always budgeted for.
Jeanie
- By Shearaw
- Posted March 26, 2009 at 8:03 pm
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Hi Renee, I have been through all of this, and it is not is scary as it sounds, although it seems complicated. Hang with me here.
First of all, the 60% replaces your take home income. If you paid for the LTD policy with after-tax $$, then none of the benefits are state or federally taxable, and no FICA is taken out either. In my case, the payout is nearly identical to my former take-home pay.
The LTD insurer will require that you also apply for Social Security Disability benefits. If those benefits are approved, the LTD insurers usually reduce your benefit by the amount of your SS benefit. However, when SS payments go up for cost-of-living, that doesn't effect the LTD benefit. Still with me?
My employer's LTD policy was also set up to include continued contributions to my company sponsored retirement plan until I am at retirement age. If yours does this at your age, this would be huge for you. I would encourage you to leave your 401K untouched, if there is any way that you can. However, after you are determined to be disabled, there are certain provisions which allow for withdrawal from some retirement accounts without any penalties.
Ask your employer for a copy of the LTD policy, if you don't already have one. Read it line-by-line, and ask your HR rep questions for any clarification you need. Their terms are defined very precisely, and it is important that you understand them.
Sheara W
- By Shearaw
- Posted March 26, 2009 at 8:28 pm
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One more thing...I just went back and read your profile. I think that you will be one of those who is automatically approved by Soc. Sec...and they are usually tougher than the LTD insurers. Just keep tabs on the paperwork....and enjoy your new house :-)
- By Sunny01
- Posted March 26, 2009 at 9:48 pm
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I used my disability for 5 1/2 months. Mine paid 70% of my salary for the first 6 months and then drops to 50%. However, I am able to suppliment the difference by cashing in sick time, vacation time, and personal time to make up the rest (100%). Don't know if that is an option for you or not.
- By ReneeK1
- Posted March 26, 2009 at 10:17 pm
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Wow, thanks for all of the responses!
Shearaw, I have to update my profile again as it's even worse now, I did not respond to Doxil and the latest CT shows a spot on my lung as well as near my spine.
I'm on Gemzar and Avastin now and hope I'm responding, my CA-125 dropped 30 points after just 1 treatment. And I have very few side effects -- I am continuing to work but I'm just -- tired. I'm just really tired. It's alot of mental stress (the disease), and although it's good to work to get it off my mind and I have some good friends at work (great support system), at the same time, I work my butt off. My job is really busy. It takes alot of energy even for a healthy person.
And I need my energy to fight the cancer. And I don't know how long I have. I could live years -- or not. I think I just need a long break, but I also need peace of mind financially.
I'm going to get the policy from my HR group and read it line by line. Probably will come back with more questions...
- By Dee5
- Posted March 27, 2009 at 10:30 am
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I was on short term disability first and then long term disability through work . The long term disability required me to apply for Social security disability. Which I did. After about 6 month I was approved. SS now lists OC as one of the diseases that get their automatic approval.
Good Luck.
- By kla
- Posted March 27, 2009 at 11:25 am
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I took my long term disability and the thing that I had forgot to figure in was the insurance premium. I am single and carried my own health insurance. It literally took up 2/3s of my disability.So please consider that in your calculations. I would also talk to my mortgage company and see if you qualify for one of the bailout programs.
I don't know how much help getting rid of the PMI would be Thats quite a difference in your loan to value ratio ,but I'd seriously look at one of the bailout programs.I also believe the best thing might be to go to one of those free credit council classes as they can give you lots of ideas on what to do to cut expenses.God Bless kate
- By Luke747
- Posted March 27, 2009 at 5:33 pm
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Renee, it is quite a decision. First of all, I must agree with FavoriteAunt and Sheara about keeping your 401(k). My husband is a financial advisor, and all I know is what I hear him tell his clients - can't even wrap my brain around the hows and whys. But he's good at what he does.
Here's the thing. We have to be allowed to be sick in order to improve. I worked for years, even through cancer and chemo. I worked with fibromyalgia until I had a total meltdown at work. Work IS pressure and energy that can sometimes be better spent on our health and well-being. I have been out of work for almost 5 years now, but am living with fibro much better because of allowing myself to be sick.
Sheara explained the outside LTD thing perfectly. My outside carrier isn't as kind as Shera's, though. We keep fighting and winning. I would not expect you to have to battle like that, tho. If your doctor is willing to write you out of work, and you are wearing yourself thin and feel like it's time for that, your health is the most important thing.
Paying bills is another kind of stress, for sure. Without knowing your situation, it just seems true that there are always ways to cut back, always ways to make it work. If going on disability is the best thing for you...then it will work out somehow.
You asked about how to cut back your expenses. One thing I've always heard is to start out by writing down every penny you spend. You will see things you didn't need to have or do. We have four sons, and one thing I've done is look in the cupboards for what food we really did have - and used it up until the cupboards really were bare. There's "nothing sounds good," and then there's "bare." Do you bake? If I want a cookie, I bake a batch. And most of our homes always have the fixings for P.B. cookies. I also have discovered Aldi and the food aisles in dollar stores. Fruit lasts longer if I cut it up and make a salad instead of eating a few pieces of fruit each day. All my meals last more than one day, too...love leftovers. Of course, food isn't the only place to cut back and is maybe not an issue for you. My two nieces just had birthdays in February, and their gifts this year were coupons for time spent with Aunt Patti. No money needed there. They can cash in their coupons - although restrictions apply. :o) And the coupons are for things that don't need money, like coming to tuck them into bed at night, or taking them to the park. This past Christmas, I knitted many gifts, and my husband and I just had to humble ourselves enough to not spend like we had in the past. That was a tough one, but it was such a lovely Christmas that we won't ever go back to big gift buying. (Well, our new granddaughter will test that one!)
It is a change in lifestyle and a change in mindset, whatever that means for each person. And you will discover how creative you are!
- By Lemona
- Posted March 28, 2009 at 11:54 am
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Renee - I am so sorry for your situation. This disease is wretched. I can't help you out with your LTD question but it seems others have provided lots of good information. I was so touched in one of your postings about how hard your work is. I'm glad you are considering LTD. I struggle with working as well, and fortunately between my laying down the law at work about my time (nicely of course) and my employer being so kind and generous, I have a relatively easy part time schedule with well defined duties and low low stress. The low stress part comes from the top management. They do not want to create any more stress in my life than I already have. They want me to take care of myself first and the job comes second (or further down the line in some cases). Perhaps your job is not one that can be redefined as mine was. I would rather you put your energies into fighting the disease. You will still have your friends even if you are not working. I'm sure they will always be there for you. Best of luck to you in fighting this disease.
Hugs.
- By michellelovejoy
- Posted March 29, 2009 at 5:28 am
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Hi Renee,
I read a post on here a while ago about SSD. Here is the link. You would automatically qualify. As far as 401K, you should withdraw it. You need to be able to focus on getting well right now and not have to worry about finances. I'm praying for you.
http://www.socialsecurity.gov/compassionateallowances
- By youngmom
- Posted March 29, 2009 at 2:57 pm
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Renee,
I really feel for you - having to battle this horrible disease and then trying to figure out the disability issue. I would suggest you sit down with your HR person to discuss your situation in detail. Do you carry your health insurance ? If so, what would the costs be if you went on disability ? Are their other benefits that you get through your job that wouldn't be available if you went on LTD ? As far as finances, please try to hold on to your 401K. Hopefully, you will be around to use it for what is meant for. I don't think it would be wise to use it to pay down your mortgage right now. I'd go for the refinance, or at least sit down with a mortgage originator to discuss options. There are all kinds of programs right now and the rates are really low. I know you are concerned about PMI, but PMI can be dropped once your loan to value goes back down below 80%, and if the real estate market recovers ( as expected) over the next 2 years the value of your home will increase again. Maybe you would only have to pay PMI for a short period of time, and as long as your monthly P & I payment is lower, it would benefit you in the long run. And if by some chance you are currently upside down on your mortgage, don't worry. As part of the stimulus package, banks can refinance up to 115% of the value of the property to help people reduce payments and get back on their feet. Lastly, my husband and I are experts on living cheaply ( LOL ! ), so I could give you a ton of advice there. Actually, I've encouraged my husband to write one of those living frugally books, because he is an expert at it ! I am only 50, and I am totally debt free. We don't have the newest furniture or the latest clothes, but we live comfortably. I've read that some of the biggest money wasters are eating out ( we brown bag even for lunch ), overuse of utilities, and cell phones ( we have trac phones that we buy the minimum number of minutes for ). With your house expenses, shop around for your home owner's insurance to look for lower premiums, and maybe you could have your house reassessed to try to lower the property taxes since the value is lower than when you bought it. It sounds like you are responding to the latest chemo treatments - that is very encouraging news. I hope and pray you go back into remission and don't have to worry about these things.
- By dke47
- Posted March 29, 2009 at 7:36 pm
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God Bless you Renee. There is lots of great advice here but I just wanted to share my experience. I am single and 47. My kids are grown so nobody depended on my salary but me. Imagine how scared I got about money but honestly I think God provides. When I was first diagnosed 3C I thought I could lose my house as well but you know I had to focus on living my life. I said I would live anywhere I had to just so I LIVED .. It now has spread to my liver and around the aorta and I am so glad I decided to take off from work nearly a yr ago and make some memories with my kids, my parents and most importantly my 11 yr old grandson. Please arrange a way to take off of work.
I am currently working on starting a fundraiser to help with my expenses. Do you have a large network of people to help you?
- By gunpowderandlead
- Posted March 30, 2009 at 8:50 am
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ReneeK1
Go to your mortgage holder and tell them what is happing in your life. They maybe able to help with a refi which will help you in the long run if they are aware of the situation.
- By FavoriteAunt
- Posted March 30, 2009 at 9:52 am
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I felt the outside company was "removed" from me - just going through the paperwork motions. I wasn't happy with the competence of some of the people I spoke with and felt they were just following a sheet of rules someone put in front of them.
Yes, you do need frequent approvals - it could have been on a monthly basis. It's not like the disability from work where they just put me in for the whole 6 months. I only dealt with that company for about 2 months. By then I was feeling good and in remission and did not want to go through the hassle of dealing with them. My employer was very good to me during my illness and I was able to take early retirement a few months later.
No, my employer did not monitor the outside company and had nothing to do with them. Once it was in there hands, that was it. One of my girlfriends/coworker also had to deal with them and she had the same reaction, but stuck with them for disability for a few months longer because she was a single mom and needed the money.
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