Disability Planning not Top Priority for Workers

March 7, 2007 (PLANSPONSOR.com) - Nearly 60% of workers don't know how they would financially manage a disability that robs them of an income and almost half of those workers haven't considered the financial impact of a disability at all, according to a survey by the Council for Disability Awareness (CDA).

The survey of 1,000 workers found that more than 80% of workers believe their chances of becoming disabled are far lower than actual statistics suggest, despite the number of disabled workers increasing 35% since 2000, according to a press release .

The CDA warns that those who are financially unprepared to handle a disability may begin dipping into their retirement savings and accruing debt. For instance, two-thirds of respondents with a 401(k) plan or an individual retirement account (IRA) don’t know what would happen to their retirement savings if they were disabled and had no income.

Of those workers who have planned financially for a disability, more than 80% are confident about their ability to cover living expenses if a disability strikes.

Other results of the survey include:

  • 56% of workers do not realize that their chancesof becoming disabled had risen over the past five years;
  • 90% workers underestimated their own chancesof becoming disabled;
  • 35% of workers with 401(k) or IRA plans said they haven’t thought about or don’t know what would happen to their contributions if they were unable to earn an income for a period of time.