Investing in the Future
Financial planning can be complicated. Today more than ever, it pays to do research and learn about your options.
Dr. Chris Rosa, vice chairman of MDA’s Board of Directors and the University Assistant Dean for Student Affairs at the City University of New York, was among the speakers on hand to help launch MDA’s new brand in January. In his remarks that day, Dr. Rosa shared the story of his own journey with muscular dystrophy, starting with his diagnosis at age 9.
“My prognosis wasn’t good, and my physicians seemed to be hyper-concerned about something called my ‘CK levels’ — creatine kinase, which is an enzyme that’s released when muscle is destroyed,” Rosa recalled. “But thanks to the care that I got through MDA’s remarkable care centers and through path-breaking research, I’ve lived way beyond my life expectancy, and I’ve lived to achieve really remarkable things on my own terms, things that we all cherish — to live and love with my family, to build a career, to fall in love, and to have my heart broken and to live to love again. All the things that we cherish about rich and meaningful lives.
“So these days when people talk about ‘what I’m concerned about,’ I’m far more concerned about the level of my 401(k) than the level of my CK.”
When it comes to thriving despite a muscle-debilitating disease — and the financial concerns that come with that — Rosa is not alone. Improvements in the medical management of neuromuscular diseases mean that individuals are living longer lives, pursuing their dreams and achieving personal goals.
“We’ve watched science change before our eyes,” says Kate Sohl, whose 8-year-old son, Macarthur, has type 2 spinal muscular atrophy (SMA). “Who knows what advances will be made by the time our son is 15? We hope for the best and plan for the worst.”
Buoyed by an optimism in today’s advances that is tempered by tomorrow’s unknowns, the Sohl family, just like Dr. Rosa, sees long-term financial stability as an increasingly important goal. Knowing how best to approach financial planning while managing a neuromuscular disease is rarely easy or straightforward. Thankfully, there are some practical ways to get started.
Michele Boardman couldn’t wait to go back to work. A nasty cold had forced the 30-year-old to stay home on the couch for two days.
“I couldn’t look at Facebook for one more minute,” says Boardman, a full-time community work incentives coordinator at AHEDD, a nonprofit organization that serves people with disabilities. “Working is so therapeutic for me in so many ways.”
Boardman can personally attest to the importance of the services she promotes, as well as those MDA offers: She had her first muscle biopsy at age 8 and by 16 she had been diagnosed with type 2I limb-girdle muscular dystrophy (LGMD).
“I love helping my clients find sustainable careers, navigate the complicated benefits available from the government and work out their finances,” says Boardman, who is also working toward her license as a professional counselor. But when it comes to planning for a stable financial future to complement a longer life expectancy, things can get tricky. Boardman is all too familiar with her clients’ challenges.
Work means a paycheck, which is normally a boon, but Boardman recalls meeting a benefits counselor before accepting her current position out of school and learning that earning income when you have a disability and related needs can also work against you because of Medicare/Medicaid income thresholds.
“I was in a panic,” Boardman says. “I had been hearing for so long that ‘you can’t work [because of your disability]’, and I really wanted to be independent.” The two talked about everything from cash payments to income and dependent care services, like Boardman’s personal care assistant who comes every morning and evening.
“It was so overwhelming,” recalls Boardman.
Since then, she has made incredible strides. After graduating in 2011, Boardman, who also plays on the Philadelphia Power Play wheelchair floor hockey team, lived with her father briefly before moving into her own apartment. She budgets carefully for rent, food and gas bills, and to avoid frivolous spending, she rarely carries cash. But the question of saving for the future is still fraught with complications.
Finding a solution
Complex situations like Boardman’s demand attention — sooner rather than later, stresses Annette Hines, a special needs and estate planning attorney in Massachusetts. “Waiting to map out a financial strategy can lead to big problems,” she says.
“There is a lot that goes into having a child with a disability, and you have to navigate your way through the system,” says Sohl, who worked with Hines to set up a special needs trust for Macarthur that won’t threaten any of his public benefits, like the 20 hours of personal care assistance he receives each week.
One good way for parents to begin planning is by writing what Cynthia Haddad, a certified financial planner with Shepherd Financial Planners, calls a letter of intent. In this document, parents should write about the kind of life they want for their child. Include information about the child’s disability, abilities, medical history, close and trusted family members, and even the values and beliefs that are important to the family. (See sidebar on page 27).
This is not an easy thing to write, she adds. “Often this is the first time parents air their concerns, and they realize that they need to plan for two generations: theirs and their child’s.”
Some families choose to meet with a financial professional. This expert can help families map out a smart financial plan, including how to identify and maximize government benefits, choose life insurance and allow grandparents to gift money without jeopardizing government benefits.
“You can and should save for your child’s future,” says Haddad. She and Hines advise using a ROTH IRA or a special needs trust to protect savings for a child.
When it comes to saving for more immediate needs, such as purchasing a new home or car, consider using an Individual Development Account (IDA), a special savings account for people with low incomes. Savings in an IDA are matched. This means that for every dollar that you save, you receive a dollar or more, depending on the providing organization. IDA account holders may also be able to take financial education classes and receive one-on-one counseling.
Just as you rely on a team to address health care needs, so too should you consult a team when it comes to finances, Haddad stresses. Your team may include a financial adviser, as well as an accountant who can steer families through tax deductions and other state and federal tax laws.
But many people may not be able to afford to include these financial professionals on their team. To ensure that their government benefits are coordinated and are promoting self-sufficiency, families can work with a community work incentives coordinator, like Boardman. They help people with disabilities make informed choices about work and successfully transition to self-sufficiency.
Ask for help
Emily Filmore had big plans for her future. She graduated from St. Louis University School of Law and practiced estate planning despite suffering from frequent migraines, pain, and sensitivity to light and temperature changes. In 2003, Filmore developed a severe rash and was diagnosed with dermatomyositis, an inflammatory disease that causes muscle weakness and a distinguishing skin rash. In 2005, she stopped working in order to focus on her health.
“I say I’m retired,” says Filmore, 39.
But since her husband had a solid, relatively well-paying job as an attorney, she never considered applying for disability or financial assistance. Even when her daughter was born, Filmore notes, “My husband and I felt like we shouldn’t take money from the government.”
“That was a mistake,” says Filmore, who has since found some personal benefits by consulting a holistic nutritional expert and an acupuncturist. In order to function without pain and get a restful sleep, she depends on herbal supplements, essential oils and an organic diet, all of which are costly out-of-pocket expenses. Not to mention a high health insurance deductible that Filmore paid in order to receive intravenous immunoglobulin (IVIG), a common treatment for dermatomyositis. To make matters worse, when the economy soured a few years ago, her husband took a pay cut and the couple “lost money on the sale of a house because we had to move closer to my husband’s work so he could help me.”
“Every year we made many financial accommodations for my illness,” says Filmore. She recently began applying for disability, but the process is lengthy, and there are no guarantees.
“Don’t be deterred by the process,” advises Kristin Stephenson, MDA vice president of policy and advocacy. “But doing the research on what services are available and determining a person’s eligibility is key.”
Research is also critical for people, like Filmore, who can choose their health plan through an employer or via the health insurance exchange. Keeping in mind that the ultimate goal is to find a plan that maximizes the care from providers and minimizes financial risk and out-of-pocket expenses, Stephenson encourages families not to immediately dismiss any plan. Even a high-deductible plan might work if expenses are predictable and the deductible will be met every year.
“Ask questions about everything including whether the specialists are out of network or in network,” Stephenson adds.
Another resource to consult — as well as a source of comfort — Sohl suggests, are other members of the MDA community. For instance, a few times a month, she organizes an SMA mom’s night out with mothers she’s met through MDA events and support groups. The moms get together to talk, laugh, cry and most importantly, share resources.
“I really treasure the evenings,” says Sohl. And while she admits she’s probably not doing everything right, she’s definitely got the right attitude. “We will keep learning, asking questions, researching and hoping for the best.”
Molly Blake is a freelance writer in the Bay Area.
Organization is Key
Keep all your important records together in one binder or cabinet so everything is easy to locate. Organize it logically and include the following:
• Relevant medical information: diagnosis, medications, limitations/abilities
• Doctors’ phone numbers/addresses
• Letter of intent (see main story for details)
• Health and hygiene information
• Insurance documents
• Trusted family members and their contact information
• Wills and other estate planning documents
• Accountant and financial planner contact information (if applicable)
• Budget information and/or spending diary
• Important receipts
• Tax documentation
• Benefits summary analysis (if applicable)
The ABLE Act Update
The Achieving a Better Life Experience (ABLE) Act of 2013 was signed into federal law in December 2014. The bill provides the authority under the tax code for people with disabilities to have “ABLE accounts” — tax-advantaged savings accounts for qualified expenses in areas like education, housing and transportation. Money in an ABLE account also does not affect qualification for federal benefits for Medicare.
For people to take advantage of these accounts, states must pass their own ABLE Act laws allowing financial institutions to create and market the accounts. ABLE Act laws have now been enacted in 35 states, and most states are planning programs that are open to residents of any state. By the end of 2016, at least five states are expected to have active programs.
Families interested in establishing an ABLE account should research states’ requirements, eligibility, funding processes, expectations and account limitations.
“ABLE accounts are not a one-size-fits-all solution,” says Kristin Stephenson, MDA vice president of policy and advocacy. “The name of the game for people who require those supports has been not to save money because that would make them ineligible for services. So [implementation of ABLE] would be a significant paradigm shift in mindset.”
To learn more about the ABLE Act, visit the ABLE National Resource Center.
Web Exclusive: Finance Q&A
Learn about taxes, asset development, types of federal benefits and more in Personal Finance Q&A with Michael Morris, a recognized field leader on financial capability for people with disabilities and director of the National Disability Institute.
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MDA Resource Center: We’re Here For You
Our trained specialists are here to provide one-on-one support for every part of your journey. Send a message below or call us at 1-833-ASK-MDA1 (1-833-275-6321). If you live outside the U.S., we may be able to connect you to muscular dystrophy groups in your area, but MDA services are only available in the U.S.