Long-Term Disability: Forgotten Risk to Retirement Income
Drains on retirement income abound. That’s natural in the course of daily life. But one of them — long-term disability — is largely unheralded, despite its being less than rare, argues a recent analysis.
In “Addressing the Risk of Long-Term Disability on Retirement Income,” an article appearing in the Journal of Pension Planning & Compliance, David Kaleda, Emily See and Matt Schoen argue that long-term disability is a “hidden threat” to millions of workers’ retirement security. The root of the problem, they suggest, is the rise and prevalence of defined contribution plans. “Many workers and employers alike are unaware of the danger disability can pose to participants of DC plans such as 401(k)s,” they write.
Disability is “shockingly common,” the authors argue, and they cite statistics that state that approximately 13% of U.S. workers will be disabled for five or more years during their time in the workforce, and that 90% of them will experience that due to chronic conditions or illness. And that won’t be getting any better, according to Social Security Administration statistics they cite which say that 25% of those who are age 20 now will become disabled before they are retirement age.
Full Content: ASPPA News
