WHERE SHOULD YOU begin? Before diving right in, you should become familiar with some key concepts. In the face of disability or illness, the most important aspects of planning will involve anticipating your financial risks (as opposed to growing assets, for example) . The first principle of risk planning is that you must plan for the worst scenario. Otherwise, if the worst occurs, you will likely be unprepared for its potentially devastating effects. If, by planning in advance for them, you are prepared to meet the most difficult challenges head on, you will avoid having to cope with devastating financial loss at precisely the time when you are least emotionally equipped to do so.
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| Adapting Financial Planning For A Life With Multiple Sclerosis |
In reality, every person has a life plan. The plan may simply be to take things as they come, to live from paycheck to paycheck, and to presume, therefore, that one will not become old, sick, or disabled. The life-planning process described in this post is, quite simply, a concerted effort to avoid such a non-approach. Nor is it too late to begin planning after the diagnosis. Some form of planning, whenever it occurs, is always better than having no specific agenda whatsoever.
Essentially, the life-planning process is designed to help a person reduce risk by (1) thinking through all possible contingencies, and (2) developing appropriate strategies to prevent life events from dictating catastrophic outcomes based on chance. The process includes four major types of planning:
- Life circumstances planning, or planning personal needs in major areas of life
- Planning for advocacy and directives by choosing professional and personal representatives or guardians in advance, as well as formulating advance directives
- Planning and implementing an ample financial portfolio or set of financial strategies designed to provide a financial portfolio, given the life goals that you have set, including provisions for adequate insurance against large financial risks
- Preparing estate plans
With the complexities of the information age, it is now in each individual's own interest to keep a thorough record of his or her own health history. You would be well advised, therefore, to create and maintain a complete, private medical record for yourself, including copies of imaging reports, lab reports, and any other record critical to your own long-term healthcare.
Perhaps the most important aspect of the life plan will be a comprehensive insurance plan. The traditional financial model in the United States assumes that an individual will begin working as a young adult and continue - essentially uninterrupted-until retirement age. MS can dramatically alter that model in several fundamental ways: the disease could cause your work life to be substantially shortened, thereby reducing the number of years in which you are able to accrue resources; the disease could also cause you to start drawing upon your savings at a premature age, and also cause you to have to draw upon those savings for a longer time than the typical retirement period; additionally, the disease could easily increase your overall expenses.
It is unrealistic to think that a typical middle-class person will be able to save sufficient resources to allow him or her to retire prematurely, stay retired longer, and have higher overall health related expenses for any length of time in retirement. Thus, the most critical element of the life plan will be construction of the risk or insurance plan as part of the financial plan. In fact, the insurance plan may drive all of the other components of the life plan; if there is a shortage of life, health, or disability coverage, the possible resulting limited financial resources if disability were to intrude could require a fundamental retooling of the entire life plan, including altering of life goals. To find out more, you can check out Adapting Financial Planning For A Life With Multiple Sclerosis.