SOCIAL SECURITY'S WAITING PERIOD (OR ELIMINATION PERIOD)

Social Security disability (SSDI) does not pay a benefit during the first 5 full months of disability. For example, if you are found to be disabled starting January 5th, you won't be eligible for a payment until July. You lose February - June to the waiting period, which is actually an elimination period.

Even if you receive back pay, 5 months of benefits will be deducted beginning with the date your disability began. Note: This is usually NOT the same as the application date.

Usually, it takes more than 5 months to get a claim processed,anyway. By the time your claim is approved the waiting period may already have passed.

The waiting period is just one more reason you need some savings to tide you over if you become disabled.

In a best case scenario, a Social Security disability payment will not be made for at least 6 months after the disability begins. There is a 5-month wait to satisfy the waiting period. Then, Social Security issues benefit checks one month in the arrears. For example, benefits due in July won't be paid until August.

I wish there was more emphasis on planning for possible disability. Too many people feel that because they are covered by Social Security their financial needs will be taken care of in disability. That is often not the case.

Men have a 43% chance of becoming seriously disabled during their working years. Women have a 54% chance. At age 42, it is four times more likely that you will become seriously disabled than that you will die during your working years.

Some Important Things You Can Do Now

1. Enroll in a group disability insurance plan at work if offered by your employer.

2. Enroll in your employer's Long Term Disability (LTD) plan, not just Short Term Disability.

3. Open a special savings account and deposit a regular amount into it each month (even if it's a small amount).

4. Consider starting an IRA (Individual Retirement Account). If you become disabled prior to retirement, you can possibly withdraw money from your IRA without penalty if you become disabled.

5. Contribute to your employer's 401(k) and get any matching contribution that your employer will make. You may be able to use this, too, if you become disabled.

6. Make a written budget showing how much income your family must have to survive six months in case of disability. Be sure to include rent or mortgage payments, car loans, food, utilities, medical care, prescriptions, etc. This gives your family a realistic idea of how much money it takes each month just to meet the necessities.

By making some plans now, you may be able to keep your home and meet basic expenses while you wait potentially up to 24 months for Social Security to make a decision. Social Security is slow, slow, slow. Don't put all your eggs in one basket.

Question: "Will my employer's Long Term Disability (LTD) policy pay me while I wait on my Social Security claim?" The answer in most cases is Yes. Most LTD plans will advance a specified amount of money each month and then recover that money once your Social Security claim is settled. LTD is often approved easier and more quickly than Social Security disability (SSDI) and it can pay much sooner than SSDI.

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This article is offered as general information and is not intended as financial or legal advice\ for any particular individual or situation. Specific advice should obtained from your financial advisor or attorney without relying solely on the information herein.

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