Feeling strain from the holidays? Try some magnesium

Getting an adequate dose of magnesium could help relieve some stress this holiday season, according to Atlanta physician Dr. Bindiya Gandhi. And according to Gandhi, almost 68 percent of Americans don’t get enough magnesium — a stat that tends to increase during the holidays.

Diets rich in magnesium, along with supplements and Epsom salt baths, can both relieve stress and promote muscle recovery. Stress also depletes magnesium levels, which makes an increased effort to intake more especially critical this time of year.

Studies show taking magnesium at night not only helps alleviate anxiety, but helps you get a better night’s rest,” said Gandhi. “Magnesium has a relaxing effect and helps convert tryptophan to serotonin, which is why it helps with anxiety.”

Gandhi added that people can boost their magnesium levels by soaking in Epsom salt, which is actually magnesium sulfate, or taking magnesium supplements orally.

She also suggests bolstering your diet with foods rich in magnesium, including nuts, seeds, chocolate, tofu, beans, avocados, bananas, figs and green leafy vegetables like kale and spinach.

“Stress can be seen in many forms, including irritability, feeling overwhelmed, symptoms of sadness, teary eyes, heart palpation, headaches, stomach upset and more. It’s different for different people,” said Gandhi.

Besides magnesium, Gandhi said meditation and breathing techniques to help cope with stress. “We can’t always change our stress in life,” Gandhi says, “but we can learn to change how we react to it.”

Increasing your body’s magnesium levels can also help jumpstart your New Year’s fitness resolutions. Gandhi says people starting new workout routines, especially high-endurance workouts, could recover faster with Epsom salt baths and other forms of magnesium.




Millennials more mindful than their parents during the holiday season

Millennials have a more defined vision of kindness and thoughtfulness during the holiday season compared to other generations, according to new research conducted by Lovepop, a maker of handcrafted 3D paper cards.

According to a national study that questioned more than 850 people, all generations tend to agree on the “true meaning” of the holiday season, with 93 percent saying they consider “kindness” the most important aspect.

However, millennials tend to go above and beyond when it comes to demonstrating thoughtfulness during this time of year and creating new memories. According to the study, 60 percent of millennials think their definition of thoughtfulness is different than older generations, and 91 percent are more likely than any other generation to say they are “more thoughtful than their parents.”

Additionally, 80 percent of millennials say thoughtfulness means making an effort to spend time with friends and family, while 66 percent say its about creating shared experiences and another 70 percent saying its about making an effort to acknowledge the everyday efforts of those around them.

Across the study, millennials were the only generation to statistically agree they are nicer than their parents. In fact, 60 percent are more likely to put in an effort to show they care than boomers. In addition, more than half – or 54 percent – of millennial parents say they make more of an effort to teach their children kindness than their parents did for them.

The research also proves just how above and beyond millennials are going this holiday season. About 68 percent of them will travel to be with loved ones, and they will spend 44 percent more on travel than any other generation.

In addition, 25 percent of millennials plan to cover travel expenses for loved ones to be with them, while 85 percent are adopting what they deem a “difficult schedule” in order to be with loved ones.




Americans agree: Financial planning isn’t fun but it is necessary

A new study conducted by Northwestern Mutual recently found that a vast majority of adults in the U.S. described financial planning as “not my favorite thing in the world, but [I] know it needs to get done like a medical checkup.”

The survey, called the 2018 Planning & Progress Study, is an annual research project commissioned by Northwestern Mutual and explores Americans’ attitudes toward money, financial decision-making, and broader issues impacting their long-term financial security.

When asked about their about their views on finance, only one in five of those surveyed – or 18 percent – said they are “excited and inspired, love to do it” when it comes to planning out their finances.

In addition, about 40 percent of respondents expressed a slew of negative emotions with regard to planning, including sentiments such as being “worried, nervous about confronting the financial details of my life,” they would “prefer not to deal with it until I absolutely have no choice” and they feel “frustrated, annoyed with my financial situation.”

There is one sentiment a majority of Americans agree on according to the survey – 70 percent of respondents said their financial planning needs improvement.

“People’s instincts are in the right place,” says Emily Holbrook, director of planning at Northwestern Mutual.

“There are pretty sizable numbers who say they either love to plan or do it because they know it’s good for them. Also, the fact that most Americans think their planning needs to be better is evidence that there’s a will to improve. We’re seeing high numbers of Americans who default to a position of avoidance or frustration and our message to them is to push through and get started–that’s often the hardest part.”

When asked what types of financial planner people are, nearly half of respondents said they consider themselves either “disciplined” or “highly disciplined” but the single most common answer was “informal.”

“A good financial plan should be flexible and adapt to your life, not the other way around,” says Holbrook. “It shouldn’t be approached as an overly rigid or static exercise. It should grow and change shape with every twist and turn that life presents. And it’s important to remember the aim of a plan is to allow you to live the life you want to live, not simply to demand sacrifice or delay your hopes and dreams.”

One in three Americans said they have not spoken to anyone about financial planning, according to the survey. And yet, a lack of planning is ranked among the top five obstacles to achieving financial security in retirement.

“Even if the intention is there, it can be hard to take action,” says Holbrook. “But we go back to what people told us in the study — they see planning like they see medical checkups. It’s not something to neglect. Even if you’ve never planned before, it’s not too late to get back on track. By doing so, people can take more control of their lives, make informed decisions, and begin to feel more financially fit.”

 




Paid and Unpaid Leave: What You Need to Know (And How You Can Be Protected Without It)

Benefit packages can be confusing to understand, and – it’s sad but true – many times are forgotten the minute the onboarding paperwork is signed. Unfortunately that leaves many employees not fully understanding their benefits package, and one area of frequent confusion is what their “paid” and “unpaid” leave options are. Not being clear on what you can collect can either lead you not to take advantage of benefits you are due, or could lull you into thinking you are going to get paid more than you actually are.

Let’s break down the difference and share some insight into figuring out how you can make sure you have access to these important benefits.

Paid Leave

Getting paid when you’re not working? Sounds like a dream, right? In actuality, though, it’s a benefit that you earn through your service. At most workplaces, you are probably most familiar with paid leave as it applies to major holidays, vacation time, sick time, etc. In some cases, you let your HR department know how you are using your paid leave (“I’m sick!”), and in other cases, it’s all lumped together as “Paid Time Off” that you use at your discretion (“I’m sick of work!”)

But paid leave is also a benefit that allows workers to take part of their pay while you take more of an extended time away from work. This comes into play when you are dealing with a serious health condition — one that needs either inpatient care or ongoing treatment from a provider (including pregnancy) — caring for a family member with a serious health condition or caring for a newborn or newly adopted child or new foster child.

Paid leave is also offered to military personnel, under the Uniformed Services Employment and Reemployment Rights Act (USERRA)  if your military compensation is less than what you would be being paid at your company.

Note that only a few states have laws requiring paid leave for various circumstances. And while many companies have their own, more generous policies, the benefit is not as widespread as you might imagine: The National Partnership for Women and Families, a non-profit, non-partisan advocacy group, estimates that only 17 percent of workers in the United States have access to paid family leave through their employers.

Unpaid Leave

This is just what it sounds like – leave that is unpaid, but is designed to protect your job (and status and benefits) so you don’t have to quit in the event you need time off for a health situation.

The most well-known source of unpaid time off is the Family and Medical Leave Act (FMLA), which offers 12 weeks of unpaid leave to care for newborns or seriously ill family members for employees who have worked at least 1,250 hours in the prior year for a company that has 50 or more employees. Typically you will exhaust your paid leave first and then you can begin collecting these benefits.

Some military leave, such as deploying with the National Guard, also typically qualifies as unpaid leave.

Remember that companies may offer an extended unpaid leave of absence or other time off that may protect your job even above and beyond what they have to by law. It’s vital to talk to your HR department and get all the particulars in writing before taking leave.

How Disability Policies Can Keep Your Paycheck Intact

Whether or not your state or company offers ample paid leave, disability insurance (or, as we like to call it, “income insurance”) is a smart addition to your benefits package. Although fewer than 40 percent have access to personal medical leave through short-term disability insurance that is provided by their employer, most workplaces offer you the option of purchasing more. It’s a decision that can save your finances should the unexpected happen.

Check into both short-term policies, which typically run from 13 to 26 weeks, and long-term policies, which kick in when you have exhausted your short-term benefits. These policies cover a percentage of your pay up to your full pay depending on their conditions.

While most workers believe they will never need disability insurance, statistics show that nearly one-quarter of the 20-year-olds in today’s workforce will miss at least a year of work due to a health condition before they reach retirement age.

Disability coverage is an important benefit every worker should be well aware of to augment your existing paid and unpaid leave.




12 ways to mitigate stress during the holidays

The holidays can be stressful — whether it’s gift buying, balancing party commitments or entertaining family, this time of year can put a strain on your mental health. In addition, the holidays can sometimes be a time of increased depression and anxiety. However, there are a few practical steps people can take to reduce stress during this time of the year, according to Jeffrey Borenstein, M.D., a Manhattan-based psychiatrist and President and CEO of the Brain & Behavior Research Foundation.

“We can learn to recognize holiday triggers, such as financial pressures or personal demands, and combat them before they lead to a meltdown,” says Dr. Borenstein. “With a little planning and some positive actions, you can find ways to enjoy the holidays.”

Here are 12 ways to reduce your stress during the holidays:

  1. Know the holidays don’t have to be perfect. As families change and grow, traditions and rituals often change as well. Choose a few to hold on to, and be open to creating new ones. If, for example, your adult children can’t visit, celebrate together in other ways, such as sharing pictures, emails or videos.
  2. Acknowledge your feelings.If someone close to you has recently died or you can’t be with loved ones, realize that it’s normal to feel sadness and grief. “It’s OK to take time to cry or express your feelings. You can’t force yourself to be happy just because it’s the holiday season,” Dr. Borenstein explains.
  3. Connect with people you trust.If you feel lonely, seek out trusted friends, if possible, or attend community, religious or other social events that offer support and companionship. Volunteering your time to help others is another good way to lift your spirits.
  4. Try simple activities that make you feel better. “Exercise, for example, is a natural antidepressant that can lift your mood by boosting endorphins—natural chemicals in the body,” says Dr. Borenstein. Exercises like running and aerobics also boost norepinephrine, a neurotransmitter that plays a role in mood. “Even a casual walk can help a great deal to reset yourself,” he says.
  5. Take a breather.Make some time for yourself. Spending just 15 minutes alone, without distractions, may refresh you enough to handle everything you need to do. Find something that clears your mind, slows your breathing and restores inner calm.  Examples: step outside to look at the stars; listen to soothing music; or read a book you’re interested in.
  6. Set aside family differences.Try to accept family members and friends as they are, even if they don’t live up to all your expectations. Set aside grievances until a more appropriate time for discussion. And be understanding if others get upset or distressed when something goes awry. Chances are they’re feeling the effects of holiday stress and depression, too.
  7. Stick to a budget.Before you go gift and food shopping, decide how much money you can afford to spend. Then stick to your budget. Don’t try to buy happiness with an avalanche of gifts.  Also, try alternatives, like donating to a charity in someone’s name, giving homemade gifts or starting a family gift exchange.
  8. Learn to say no.By saying yes when you should say no, you can feel resentful and overwhelmed. Friends and colleagues will understand if you can’t participate in every project or activity. And if your work is unyielding during the season, try to remove something else from your agenda to give you more time for yourself.
  9. Plan ahead.Set aside specific days for shopping, baking, visiting friends and other activities. And make lists. That’ll help prevent last-minute scrambling. And ask family or friends ahead of time to help with party preparation and cleanup.
  10. Stick with healthy habits. The temptation to cope by self-medicating, binge eating or excessive drinking coincides with the party spirit of the holidays, which can exacerbate negative feelings. So try not to over-indulge. “Alcohol, for example, is a depressant and can actually increase feelings of depression, stress, anxiety, and guilt,” says Dr. Borenstein.
  11. Make realistic New Year’s resolutions.  Most people don’t keep the resolutions they’ve made the year before.  “If you make a resolution, pick something realistic and short term ­– maybe something you can handle in the month of January – a simple goal you can achieve without adding more stress to your life,” suggests Dr. Borenstein. “Life is stressful enough without contributing to it unnecessarily.”
  12. Seek professional help if you need it.Despite your best efforts, you may find yourself feeling persistently sad, anxious, irritable and hopeless, unable to sleep or face routine chores. “If these feelings last for a while, talk to your doctor or a mental health professional who know how to help you,” says Dr. Borenstein.



Survey reveals Baby Boomers’ need for strategic retirement planning

A report recently released by BMOW Wealth Management showed aging Americans have concerns with regard to retirement planning and the effects on their family and wealth.

The report, called The Aging Economy: Improving with Age, surveyed more than 500 Americans 55 and older and reviewed the benefits of an in-depth wealth plan to help manage the stressors many seniors feel throughout retirement.

“While Americans are fortunate to be living longer, extended retirement brings additional costs and challenges,” said Tania Slade, National Head of Wealth Planning, BMO Wealth Management (U.S.).

“It’s crucial that people approaching retirement work closely with financial planners, spouses, and family members to come up with a viable, long-term strategy that supports them throughout their elder years and enables them to leave the legacy they desire.”

As a result of the increased life expectancy among Americans, the average retirement period is now 18 years, and many boomers are remaining in the workforce longer to grow their retirement next egg, meet retirement and estate planning goals and stay active. In addition, more Boomers are thinking now more than ever about how they will live comfortably in the future.

According to the survey, Boomer’s top concerns about a prolonged retirement include quality of life and healthcare costs, followed by being a burden on family members and running out of money during retirement.

Additionally, spouses and partners can have differing opinions about their long-term financial goals. The biggest discrepancy most couples noted was when and how much to save for the future, followed by retirement goals and how personal assets and possessions should be distributed to heirs.

Lastly, respondents identified their most significant investment and retirement issues as a desire to maximize retirement income, fear of outliving their savings in retirement, and the impact of long-term care costs on personal finances.

 

 

 




Time to Invest in You: Ways to Make Your Retirement a Reality

By Rachel Barrow, AVP Marketing, Individual Markets, Guardian Life Insurance Co. of America®

Dreaming about retirement may bring to mind relaxation, travel, and leisure time. Many people find, though, that planning for it can be stressful – but it doesn’t have to be that way. If open enrollment time has you thinking about how you’ll fund your retirement, you’re not alone. A recent survey by the Employment Benefit Research Institute1 shows that retirees are less confident than they were last year that they will have enough money saved for basic expenses, health care, or long-term care.

How can you face the future with more confidence? Look for resources to help you chart this path. Turn to your current employer for help; Guardian’s 5th Annual Workplace Benefits Study,2 Small Business, Big Benefits, states that over 44 percent of small businesses are increasing employee financial education over the next five years to help employees make better benefits decisions. Or, make a plan that’s focused on what you feel will matter most to you in retirement (family, lifestyle, relationships, health, etc.), seek out the best retirement strategies and products and, most of all, invest in yourself. It can help you go a long way toward making your second act (retirement) a reality.

Plan with care

As you start considering your retirement plan, it helps to look at how certain financial products can help you reach your goals. Whether those products protect future income, help cover future care, protect your earning ability from the possibility of premature death, accidents, or long-term illness, or provide for market-related growth opportunities, having a well-rounded package of products may make a difference.

To create the best retirement strategy, you need to balance having the right products in place, while recognizing some of the issues you may encounter along the way. Keep these ideas in mind while you are planning your future:

  • Keep up with your defined contribution (DC) plan: Open enrollment is an excellent time to increase how much money you’re saving, but you can ordinarily do it anytime throughout the year (based on your plan’s provisions). Many retirement planners underestimate the amount they will need to maintain the standard of living they want. Remember to account for inflation, health care costs, and unexpected expenses you may encounter.
  • Keep a diversified investment portfolio: As you examine your investment choices during open enrollment, remember the benefits of a diversified selection of investments. Even if your investment choices get more conservative as retirement approaches, you may not want to avoid stocks entirely. After all, keeping pace with inflation can help your nest egg retain its purchasing power. See your financial advisor to discuss how you feel about risk and your retirement income goals.
  • Have realistic retirement income goals: The old rule of thumb is that you will need 80 percent of your annual pre-retirement income, because of the (assumed) reduced cost of living in retirement, including the possible elimination of mortgage payments. But when you factor in health care costs, dining out, travel, and pursuing other passions, this amount may not be enough for you. Take the time to do the math and don’t be shy to get help from a financial professional.

Explore your options and mind any gaps

After you do your calculations, if you find your projections mean you may be falling short of your retirement income goals, don’t despair. Whether you feel you’ll have a shortfall in your retirement budget or are just trying to find solid, reliable sources to pay future expenses, focusing on guaranteed monthly income can help.

Many experts agree. For instance, Robert Merton (MIT professor and co-recipient of the 1997 Nobel Memorial Prize in Economic Sciences) wrote in Harvard Business Review3 that people should focus their retirement planning on monthly income instead of trying to find a magic number of how much they’ll need in total retirement savings.

What are the sources of guaranteed income that can help you produce the monthly retirement income you’ll need? Some will be familiar to you; others may not be. But it’s worth taking a close look at guaranteed income, the products that provide it, and how they can be an essential source of monthly retirement income:

  • Social Security: Just about everyone knows about Social Security, but how much do you think you’ll receive? Visit the Social Security Administration’s Retirement Estimator4 to find out. When you see your estimated future benefit, keep in mind that Social Security generally only accounts for part of most people’s retirement income – and that your future benefits are not (at this point in time) guaranteed.
  • Company Pensions: If you’re lucky enough to work for an employer that offers a pension plan, be grateful. Once a major source of guaranteed retirement income, employer-sponsored pensions are not a common benefit offering today.
  • Bonds and CDs: These investments give predictable (if not absolutely guaranteed) returns, with possible tax advantages, and can help round out your investment portfolio. Their rates of return can be somewhat limited, however.
  • Annuities: By paying an insurance company a specified amount of money, you can receive regular payments for a set amount of time, or for life. There are many different types of annuities that can establish cash flow now (immediate annuities) or later (deferred annuities) – at fixed or variable interest rates.

Invest in yourself

Budgeting for your retirement can seem like a daunting task, but making a plan is the first step. Pause, build a checklist of tasks for yourself, and check off each one as you complete it. It also helps to consult a financial professional, who can help you identify your unique retirement vision – and the steps you can take to help yourself achieve it.

Each person’s plan will be different. The important thing is that you take the time to invest in your own future. You may find that it not only alleviates stress, but also helps you take the first step toward achieving the retirement of your dreams.

Rachel Barrow leads the Product Marketing team for Individual Markets at The Guardian Life Insurance Company of America®. She has been with Guardian since 2009 and in the insurance business for over 20 years. Her team produces educational tools and resources focused on strategies to help individuals, families and small business owners achieve financial security.

2018-69267

1 Employee Benefit Research Institute (2018, April 24). 2018 Retirement Confidence Survey. Retrieved from: https://www.ebri.org/docs/default-source/rcs/1_2018rcs_report_v5mgachecked.pdf?sfvrsn=e2e9302f_2

2 5th Annual Workplace Benefits Study (2018, October 15), Small Business, Big Benefits. https://www.guardiananytime.com/gafd/wps/portal/fdhome/insights-perspectives/emerging-trends/small-business-benefits-study

3 Merton, Robert C. (2014, July-August). The Crisis in Retirement Planning. Retrieved from https://hbr.org/2014/07/the-crisis-in-retirement-planning

4 Social Security Administration. How the Retirement Estimator Works. Retrieved from https://www.ssa.gov/benefits/retirement/estimator.html




“I’ll take a 50% cut in pay, and I’m cool with downsizing my retirement” – Said No Employee, Ever

By Tom Charla, Director and Tara Reynolds, Corporate Vice President, MassMutual

Most employees have figured out that the safety nets previous generations enjoyed — job security, pensions, even Social Security – can’t be relied on the way they have been in the past. They know that when it comes to reaching their financial goals, especially the goal of a comfortable retirement, they are pretty much on their own.

At the same time though, employees are expecting, even requiring, that their employer — the same one that no longer provides much of yesterday’s safety nets – make available the benefits, financial planning and educational opportunities needed to make informed choices about their future. Your employees and colleagues are counting on you to help them understand what action they most need to take next, especially during open enrollment season.

How do employees define “financial well-being?”

As an employer, you can distinguish your company and provide peace of mind by offering benefit options that closely align with your employees’ overall financial well-being. Today, financial well-being (aka ‘financial literacy’ or ‘financial wellness’) is a bit of a buzzword, so it helps to define what it means. According to the Consumer Financial Protection Bureau, financial well-being is achieved when an employee is able to:

  • Manage day-to-day and month-to-month expenses
  • Absorb a financial shock
  • Stay on track to meet their financial goals, and
  • Make financial choices that let them enjoy life

Now vs Later… and Everything In-Between

The CFPB definition calls clear attention to both the short and long-term considerations to achieving financial well-being. At the same time, with 78 percent of all workers living paycheck-to-paycheck1, longer-term plans often fall by the wayside. Without having a long-term financial view, employees may make money mistakes with long-term consequences — such as making withdrawals from their retirement accounts — to address a short-term concern.

As hard as it is to balance priorities, it’s even more devastating for individuals and their families when they get caught short by overlooking the financial and emotional damage that a potential disability can cause when adequate disability income insurance (DI) coverage is not in place. A disability of any significant duration can result in immediate lost income, as well as the inability to continue to save for retirement.

For the employer, having an adequately protected employee can be very beneficial for the business as well, especially if that disabled employee comes back to work. A recent survey conducted by MassMutual found that business owners believed that over 40 percent of their employees would not be able to retire on time (traditional retirement age) because of inadequate savings. The inability of employees (including those who returned to work after a disability) to retire on time can have long term impacts on the business itself. Increased future payroll and benefit costs, delayed succession plan implementation, and even a potentially lower perceived value of a small business when it’s time to sell, can all be the result of employees having to work past retirement age.

 What are the chances?

For many people in the workforce, and for their employers, it’s hard to predict when and how a disability will strike. Yet with today’s 20-year olds facing a 1 in 4 chance2 of becoming too sick or hurt to work before they reach age 67, a disability that could keep them out of work for an extended period can happen at any time. As employees age, the risk of a disability naturally increases. That’s because most long term disabilities, about 90 percent, are caused by a sickness, not a catastrophic injury3. As employees age, so do their chances of a prolonged illness due to cancer, musculoskeletal or nervous system disorders.

When you review your benefits package and align it with the CFBP definition, you’ll quickly see that DI is one of only a few benefits that can have a direct impact on all four parts of an employee’s financial well-being. And it’s in this analysis that we start to uncover how devastating a disability can be, even for an employee who may have dutifully saved for retirement up until the time of their disability.

A comfortable retirement is most everyone’s long-term financial goal

When an employee becomes disabled and can’t work for an extended period of time, managing for the short-term is critical. Retirement balances can get tapped for more pressing day-to-day necessities, or to cover increased medical costs, hiring additional help, home safety accommodations, etc.

However, managing for the long-term is equally important. It’s hard enough to deliver the news to an employee that their group long term disability coverage may replace only roughly half their paycheck (after taxes) at a time when their expenses likely will skyrocket. You will have to help them understand that their ability to contribute to the employer sponsored tax-advantaged retirement savings account – including any company matches – will no longer be available to them. And this realization may occur just at the time they are tapping into their retirement balances to help make ends meet. Do you relish breaking the news of a big pay cut and a major hit to your employee’s retirement account?

Individual DI policies, such as those from MassMutual, have an option for an employee to continue saving for retirement in addition to protecting a larger portion of their income. This allows an employee whose life has been interrupted by a disability to be confident that they can continue to fund some aspect of their future retirement, especially knowing that their disability income payments cease at the end of the disability benefit period (and certainly no later than at their normal retirement date.)

DI can set you apart

You know the right benefits package can help you attract and retain the best talent for your company. So it makes sense to offer benefits that employees want. According to 2018 MassMutual Workplace Benefits study, 78 percent of employees identified DI as a benefit they would be interested in, and almost as many – 74 percent – would like to have a benefit that provides continued retirement savings protection while the employee is disabled.4

But benefits packages are more than just employee retention tools; they reflect who you are and what you believe. When you offer your employees DI, you demonstrate that you want them to be financially well for the short and long-term. This approach to benefit planning also helps you position your company as one that cares about its employees, and is actively seeking to offer tools and programs that are in the employees’ best interest. That’s a message all of us can get behind!

1Career Builder / Harris online poll conducted June 2017

2 US Social Security Administration, Fact Sheet 2018

3 The 2014 Council for Disability Awareness Long Term Disability Claims Review

4 Survey conducted for MassMutual by Greenwald & Associates in 2017




SSDI lacks rehabilitation resources

By Ted Norwood, General Counsel & Director of Representation, Integrated Benefits Inc.

SSDI has poor resources for vocational rehabilitation or job placement, and no resources at all for claimants during the wait for a decision. This makes it harder for people to recover and get back to work.

Because of the long wait, many claimants miss out on vital windows to improve their chances of recovery and return to work. By the time the SSA awards disability payments, many claims are permanent due to the effects of such a long layoff and the lack of rehabilitation resources.

Certainly, SSDI can provide income to your disabled employees, but relying on it leaves them with a long wait and long odds, making it less likely they will be able to rejoin your team or find alternative work.

SSDI is not all bad news for employers

Although SSDI does not do much for employers on its own, it is certainly better than nothing. It does eventually provide Medicare and annual cost of living adjustments (COLAs) for disabled claimants.

Those are important benefits, as many employees lose their health insurance during the wait for SSDI. Annual COLAs help people with disabilities keep up with the economy. Every bit matters once workers are on a fixed income.

Despite its problems, the SSDI program is a successful program designed to help protect American workers. Still, there is one more major advantage SSDI provides to employers.

SSDI acts like a subsidy to group long-term disability insurance, making disability policies affordable and an excellent value.

Group long-term disability policies protect employees from the disadvantages of SSDI.[1]

  • These LTD policies usually start with an own-occupation period of two years, allowing the employee to receive benefits immediately.
  • Group LTD policies can be structured to pay higher benefits than SSDI does.
  • Group LTD policies have better opportunities to provide vocational rehabilitation and return to work services.
  • Plus, most insurers will provide a lawyer for claimants to assist with their SSDI applications.

Although claimants often cannot double dip LTD and SSDI, SSDI still provides them with health insurance and cost-of-living adjustments. These benefits are the real opportunity SSDI provides for employers.

[1] https://www.consumerslife.com/EmployersCLIC/Products-for-Employers/Group-Long-Term-Disability-Insurance.aspx ; https://www.policygenius.com/disability-insurance/learn/long-term-disability-insurance-faqs/




Why relying on SSDI is better than nothing, but far from optimal

By Ted Norwood, General Counsel and Director of Representation, Integrated Benefits, Inc.

According to the Council for Disability Awareness, half of those who don’t work for the government have some form of employer-paid disability insurance (short-term disability only, long-term disability only, or both STD and LTD). These benefits are important because 25 percent of today’s 20-year-olds will at some point miss a year or more of work due to medical problems.

For businesses, as companies become leaner, individual employees become more vital and more difficult to replace. Replacing an experienced employee is very expensive, and long term, losing employees is difficult.

Given that, an increasing number of employers recognize the value of employee well-being. In fact, many companies now recognize the value of caring for employees as people, not just assets.[1]

Providing private disability insurance benefits in the workplace is an important way to care for employee financial health. But, about half of workers in the private sector do not have these benefits. Instead, if they are unable to work for an extended period of time, they often must rely on the Social Security Administration’s Disability Income (SSDI) program—if they qualify—for income.

In this article, we will look at the advantages and disadvantages of the SSA’s disability program from an employer perspective. Since you have to eat your veggies before dessert, let’s start with the disadvantages of the SSDI program and then end on a high note.

Three Disadvantages of Relying on SSDI for Employee Disability Coverage

The three main disadvantages to relying on SSDI to provide disability insurance to your employees are the wait, the challenges, and the lack of good recovery resources.

The Wait

The wait time to receive Social Security disability payments is almost unconscionable. The average wait before your employee receives the first payment is 15 months. Many applicants wait two years or more.

During this long wait, employees relying on SSDI often have no income. Spouses may work, but even in the best cases, the lost income is often devastating. They may get food stamps or Medicaid in some places, but in others they may not. Even though the SSA does provide retroactive payments on its disability awards, the wait is so long that many claimants have lost their savings, liquidated retirement accounts, and have seen their personal relationships deteriorate.[2]

SSDI does help people, but the long wait creates problems for claimants. It is certainly not what a conscientious employer wants to see for their dedicated workers.

SSDI is Hard to Get

Qualification for SSDI is hard. Social Security does not offer an own-occupation definition of disability nor does it consider prior income.[3] For skilled workers, this makes qualification very difficult. In fact, most claimants need a lawyer to represent them during the application process. Without representation, the odds of receiving benefits are much lower.

The application process is often difficult to navigate and confusing. The SSA repeatedly requests the same information and requires completion of long forms. Given the high standard of disability, a misplaced word can hurt a claimant’s application, which already only has a one in three chance of receiving an award at the initial level.[4]

Not only does it take an incredibly long time to get benefits, it is also very difficult to qualify. Leaving your employees to rely on this Byzantine system is certainly not an advantage to a compassionate employer.

SSDI Lacks Rehabilitation Resources

SSDI has poor resources for vocational rehabilitation or job placement, and no resources at all for claimants during the wait for a decision. This makes it harder for people to recover and get back to work.

Because of the long wait, many claimants miss out on vital windows to improve their chances of recovery and return to work. By the time the SSA awards disability payments, many claims are permanent due to the effects of such a long layoff and the lack of rehabilitation resources.

Certainly, SSDI can provide income to your disabled employees, but relying on it leaves them with a long wait and long odds, making it less likely they will be able to rejoin your team or find alternative work.

SSDI is Not All Bad News for Employers

Although SSDI does not do much for employers on its own, it is certainly better than nothing. It does eventually provide Medicare and annual cost of living adjustments (COLAs) for disabled claimants.

Those are important benefits, as many employees lose their health insurance during the wait for SSDI. Annual COLAs help people with disabilities keep up with the economy. Every bit matters once workers are on a fixed income.

Despite its problems, the SSDI program is a successful program designed to help protect American workers. Still, there is one more major advantage SSDI provides to employers.

SSDI acts like a subsidy to group long-term disability insurance, making disability policies affordable and an excellent value.

Group long-term disability policies protect employees from the disadvantages of SSDI.[5]

  • These LTD policies usually start with an own-occupation period of two years, allowing the employee to receive benefits immediately.
  • Group LTD policies can be structured to pay higher benefits than SSDI does.
  • Group LTD policies have better opportunities to provide vocational rehabilitation and return to work services.
  • Plus, most insurers will provide a lawyer for claimants to assist with their SSDI applications.

Although claimants often cannot double dip LTD and SSDI, SSDI still provides them with health insurance and cost-of-living adjustments. These benefits are the real opportunity SSDI provides for employers.

[1] https://www.youtube.com/watch?v=or6YoXfHWSE

[2] https://www.nadr.org/news/377122/Four-Personal-Stories-Show-the-Effects-the-SSDI-Backlog-has-on-Peoples-Finances-and-Futures.htm

[3] https://www.ssa.gov/redbook/eng/definedisability.htm

[4] https://www.disabilitysecrets.com/advice.html

[5] https://www.consumerslife.com/EmployersCLIC/Products-for-Employers/Group-Long-Term-Disability-Insurance.aspx ; https://www.policygenius.com/disability-insurance/learn/long-term-disability-insurance-faqs/