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March 31, 2010, Featured Articles, Guest Column, Advisors/Planners/Reps , Health Care

Insult to Injury: Disability’s Impact on a Retirement Plan

By Jim Otar   Wed, Mar 31, 2010

Even good retirement plans can backfire if you do not carefully consider the effect of disability and lost earning power on retirement savings.

Picture this: You have a client who is ten years away from retirement. He comes to you for retirement advice. You spend several hours, maybe even a full day with him. You consider many different retirement scenarios.

At the end of this exercise, you prepare a plan that's as thick as a phone book. In your next meeting, you review the plan with your client.

One of your suggestions is that he buy disability (a.k.a. income replacement) insurance, in case he can't work and earn income. But your client says that his employer already gives him similar insurance. He has no interest in purchasing his own disability insurance. After some intense discussions, you fail to convince him.

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