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Planning for Retirement with Chronic Illness

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How Patients Can Retire When They Have a Chronic Illness

Hello and thank you for joining us. My name is Abbie Cornett, and I am the patient advocate for IG Living magazine. This podcast is brought to you by IG Living magazine to give readers an opportunity to hear from healthcare experts on topics important to them.

In this episode, I will cover some of the ways patients with a chronic illness can plan for retirement. I would like to thank our readers who wrote in with questions regarding today’s topic.

This is a very important topic for patients because it can directly impact the quality of their later years of life. If you are like many Americans, you may not be preparing for retirement. A survey conducted by Money magazine in 2016 found one out of every three Americans has no savings, and 23 percent have less than $10,000 saved. These figures are particularly alarming since retirement is one of the biggest life expenses, even without a chronic illness.

It is further alarming when considering the growing aging population. By 2020, the number of seniors (those over age 65) will outnumber children younger than 5 years of age. And, within 25 years, the number of seniors will have doubled. Many expenses get in the way of saving money such as credit card debt, student loans, low wages and children. But, for those with a chronic illness, saving for retirement is even harder since a large part of income goes to cover expensive insurance plans, doctor visits, medicines and medical supplies. Furthermore, people with a chronic illness may be unable to work or can’t work full time due to their illness. This means there often isn’t enough money to save.

The population dealing with chronic illness and its expenses is larger than most people realize. According to statistics, 133 million Americans have at least one chronic illness. And, it is estimated by 2025, that number will have grown to 164 million people or nearly half the population. While these statistics sound daunting, it doesn’t mean those with chronic illness can’t take steps to prepare for retirement.

As the patient advocate for IG Living magazine, I am frequently asked what steps patients should take when they start planning for retirement. Here are the steps I recommend:

Step 1: Talk to Your Doctor

Because you have a chronic illness, your doctor needs to be part of this discussion for several reasons. Your doctor can advise you on the likely progression of your disease and whether you will need special medical services, equipment or food. For example, if you have a neuromuscular illness, this may mean you will need to make your home handicap-accessible in the future. Your doctor can also advise if you might have to reduce your work hours in the future or retire early due to your illness. This information is vital for helping you set a budget to plan for projected costs.

Step 2: Determine How Much Money You Will Need

After you have you have spoken with your doctor and determined the likely progression of your disease, you need to determine how much money you will need to save to be able to retire. While this may sound obvious, it isn’t. According to a study conducted by Age Wave and Merrill Lynch, 81 percent of Americans say they don’t know what they will need to fund their retirement.

Because of the complicated nature of retirement planning with chronic illness, you may feel your best option is to seek the help of a professional financial planner to help you plan. If you choose to use a planner, finding the best one doesn’t necessarily mean finding one who specializes in clients with chronic illness. What is important is finding a professional who has integrity and is willing to think outside the box. After you have chosen a planner, it’s up to you to provide details about your illness and what your future needs will be.

If you decide you do not need the services of a financial planner and are determining what you need to save on your own, a common guideline for retirement planning is to aim for replacing 70 percent of your annual preretirement income. This amount can consist of savings, investments, Social Security wages and any other income sources such as a pension and part-time employment. A recent retirement survey estimates the average amount needed to retire is $738,400 with $260,000 of that amount allocated toward healthcare costs. Of course, this amount will differ from person to person based on individual needs and lifestyles. When deciding how much you need to save, remember that numbers are averages. You will need to estimate the age you plan to retire, as well as any additional amount you will need to take care of your illness. Like the Social Security calculators, there are several good retirement calculators you can utilize to help reach your goals.

Step 3: Consistently Save Money

This is the hardest step for all people regardless of whether they have a chronic illness or not. But it is the most important! If you are planning on retiring, you need to constantly save money, even if it is a small amount. While it may not seem like much at the time, the balance will build up. Trust me, your future self will thank you for every dollar you are able to save today.

When determining how much you need to save, a common guideline for retirement planning is to aim for replacing 70 percent of your annual preretirement income. To accomplish this goal you need to prioritize your spending and reduce your long-term debt. The less you owe, the less interest you will pay. Those interest payments can instead go toward savings!

Step 4: Review Your Insurance

Having good insurance will help you save money!

When diagnosed with a chronic illness, understanding insurance coverage becomes vital to your financial success. Not only do you need to select the best healthcare plan to reduce out-of-pocket expenses and maximize treatments, you also need to understand disability, life and long-term care insurance. To gain a better understanding of your needs, it’s a good idea to speak with an impaired-risk specialist who knows which policies would be best suited for you and to help find the right coverage.

Before purchasing new or additional coverage, thoroughly review your current policies to learn what they cover, how much they can give you and what your best options are. You might assume because you have been diagnosed with a chronic illness that life insurance is not an option or that you are stuck with your current coverage. This isn’t always the case! Even after diagnosis, you may be able to convert a term life into a permanent life policy. If you can do this, you can ensure security for your loved ones if something happens to you.

In addition, some whole life policies offer chronic care riders that allow the policyholder to receive a portion of the policy to manage expenses if he or she becomes chronically ill, while still having the security of a permanent life policy. If you already have a whole life policy, make sure you understand it. Many policies have an accelerated death benefit that will allow you to unlock a percentage of the benefit while the policyholder is still living. Whole life policies have a cash value that you can borrow against. Either of these actions, though, will result in a reduced death benefit.

Step 5: Prepare for a Smooth Transition to Medicare!

Many people with a chronic illness require medications such as immune globulin that can be very complicated financially. Compared with all other insurance plans, Medicare probably varies most in its coverage policies for immune globulin therapy. Therefore, patients who continue to receive immune globulin therapy when they turn 65 or otherwise become eligible for Medicare need to know how to successfully transition to Medicare. In fact, changes in site of care and route of administration may be necessary to ensure therapy is continued without disruption and financial strain.

To be eligible for Medicare coverage, patients must be age 65 or older and eligible for retirement benefits under Social Security, or they must be a federal, state or local government employee. To be eligible for Social Security, individuals must have 40-plus quarters of Social Security-covered employment; receive benefits under a spouse’s work record and be currently married; or have received benefits under a former spouse to whom they were married for at least 10 years. Under specific circumstances, individuals may also be eligible for Medicare if they are receiving disability benefits under Social Security Disability Insurance.

One of the most important things to consider when turning 65 is if insurance through an employer will continue. If patients or their spouses are still working, and the employer has 20 or more employees, Medicare becomes the secondary insurance until they retire. If patients or their spouses plan to retire, and their employer’s insurance will continue, Medicare will become the primary insurance and will cover all approved charges at 80 percent, with the employer’s insurance generally covering the remaining 20 percent of approved charges. If the employer’s insurance will terminate, patients may consider obtaining a Medicare supplemental plan, since 20 percent of the cost of monthly immune globulin therapy can be financially taxing.

Before making any decisions, know what options are available to you! Understanding coverage and the options involved with your care is crucial as patients transition to Medicare. Especially when Medicare becomes the primary insurance, patients should be prepared to make changes in their care to optimize coverage and make the best choices for uninterrupted care when they consider these details well in advance of becoming eligible for Medicare.

In conclusion, while the above-mentioned obstacles may seem insurmountable when first starting to plan for retirement, they aren’t! With a bit of financial education and careful preplanning, saving for retirement is possible even with a chronic illness

Thank you again for joining us today. Additional information regarding this podcast can be found on our website at If readers have a question that was not answered, please contact me at [email protected].

Look for the next IG Living podcast announcement on our website for the opportunity to submit your questions.


IG Living Advocate is a copywrite production of IG Living magazine, published by FFF Enterprises, and is the only magazine for the immune globulin community comprised of patients who suffer from chronic illness and their caregivers.