Chronic illnesses bring unique financial challenges

Chronic illnesses bring unique financial challenges

Dealing with the medical difficulties of a chronic illness is
challenging enough. You also have to worry about the effect of
illness on your finances.
Dealing with the medical difficulties of a chronic illness is challenging enough. You also have to worry about the effect of illness on your finances.

The National Association of Personal Financial Advisors, which represents fee-only financial planners, has joined a national initiative to educate financial advisers on how they can help clients with chronic illnesses.

The initiative is called RV4TheCure. It is being launched by Martin Shenkman, a lawyer and certified public accountant in Paramus, N.J., whose wife was diagnosed with multiple sclerosis in 2006.

Shenkman will travel around the country in an Airstream trailer starting at the end of August, speaking to professional advisers.

The initial financial questions a chronically ill person has to address are basic for everyone:

– What income will you have?

– What are your expenses?

“You have the same concerns as any other person,” Shenkman said. “You just have some additional ones.”

A key point to the strategy is to preserve your health insurance coverage, said Brent Neiser, a certified financial planner and director of strategic programs and alliances at the National Endowment for Financial Education, a nonprofit organization that aims to improve Americans’ financial education.

There are other special considerations. And they may be different for each chronically ill person, depending on type of illness, age and other considerations. Investment strategies should be catered individually depending on the circumstances.

Often, chronic illness is akin to job loss. There can be increased expenses and less income.

But there’s a misconception that everyone with a chronic illness should stay very liquid. That may not be the case.

“If I were diagnosed with a chronic illness and had a home with stairs, I may have to install an elevator, get a mobility device like a scooter and do other modifications in the home,” Shenkman said. “So it may very well be that somebody with a chronic illness should have a greater degree of liquidity.”

But the reverse can equally be true.

If someone were diagnosed with something like Parkinson’s disease or multiple sclerosis in their 30s or 40s, “they may still have five or 10 years of work left, but clearly they’re going to have to retire early,” Shenkman said.

“If you took a person like that who has saved some money and has built up some net worth, I’d probably want to invest them up to the hilt because they may have five or 10 years to amass enough wealth to be able to support themselves in their retirement,” he said.

Make sure you’re able to communicate clearly with your financial adviser about the impact of your chronic illness on your finances.

“Each disease has a very different disease course, and each person’s experience of that disease has a very different consequence and ramifications,” Shenkman said. “What is the disease course for you and how does that affect your work, career? How does that affect the budgeting you’ll need? How does that affect the expenses you’ll have to pay?”

How much support do you have from family and friends?

“Where are you going to get the caregivers you need, if not from family or friends?” Shenkman said.

Those are tough issues to address, but absolutely necessary to face.

“Everybody should really have some of the same worries that someone has with a chronic illness today, because the odds are you may have an issue down the road,” Shenkman said. “You don’t know what’s coming down the pike.”

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