Financial Planning in the Context of Chronic Illness

With the advancement of medical technology, more and more people each day are being diagnosed with chronic neurological debilitating illnesses, such as Parkinson’s Disease, Multiple Sclerosis, Alzheimer’s, Stiff Person Syndrome, etc. And some (one out of million chances) may have two devastating illnesses simultaneously. 

Being diagnosed correctly at the onset of the illness is almost impossible since neurological disorders share so many common characteristics. Is a hand tremor an indication of Parkinson’s? Maybe or maybe not. Furthermore, the speed of the tremor may indicate an entirely different type of diagnosis. Thus, it often takes trial and error, time and multiple visits to different specialists to make the final correct one. In the meanwhile, please don’t get discouraged or despair when you first hear those dreadful medical terms. (For more, see: How to Manage Chronic Illness Expenses.)

While waiting for the medical specialists to make the right call on your illness, you inevitably begin to ponder, “Now what?” after the initial shock. Being a caregiver myself and also a professional CFP, I do have a few tips to share. Hopefully the information and the insight will make your life a little easier.

Work or Retire?

To work or retire? That’s the question many working patients and their caregivers have to answer first, sooner or later. Admittedly, it’s not an easy one to respond to as it depends on so many variables - wealth, health and personal happiness.

You may want to evaluate your financial status in the immediate and long term to see if your nest egg can last for both of you (assuming kids are out of the nest and independent) if you retire early. 

Physically, can you still move around independently or do you need substantial physical assistance? How about your mental capacity and clarity? The answers to these questions may help decide the type of work you can or can’t do. (For more, see: Failing Health Could Drain Your Retirement Savings.)  

Lastly, will suddenly stop working cause you and your spouse difficulty to adjust? It sometimes feels like an intrusion for a stay-at-home spouse even though the early retirement/illness is unplanned and forced. Many times people are thrilled to retire early, at least initially, but as days go by, boredom starts to set in. Lack of the usual social connection with colleagues and busy schedules may lead to depression and low self esteem. So try to plan meaningful hobbies to substitute the previous hectic 9-to-5 routine, such as volunteering for a local Parkinson’s support group, to see if you can spread the word about the illness and garner support for the research. Along the way, you may find camaraderie with many fellow Parkinson’s patients who share the same goals as you - finding the new meds/techniques to slow down the progression or the ultimate cure. 

Caregivers, too, need to find a separate support group to learn about the illness, build a network of support and feel free to vent their emotions with others who have been there and know what they are going through.

Consider all of those factors carefully before the retirement. Sometimes, a test run may be the way to find out. Can you work part time or have a sabbatical to see how your body and mind react before submitting the final notice? Working part time not only gives you (and your spouse) some breathing room, but also helps ease the sudden financial impact. As we all know, bills don’t stop just because you are sick. Take baby steps to test yourself and your ability before making any drastic and irrevocable decision. 

Get All Financial Ducks in a Row

While you are debating whether to work or retire, a debilitating illness requires your immediate attention to get all financial ducks in a row. Financial planning for a chronic illness is not a do-it-yourself project that you can tackle alone. You absolutely need to have a team of experts on your side. At a minimum, you need a CFP, CPA, insurance agent, geriatric care manger, Medicare specialist, elder law attorney and estate planning attorney on your side.

In the subsequent articles, we will explain each team member’s role in detail. Stay tuned. (For more, see: 6 Common Conditions With Expensive Medications.)

This article is dedicated to all chronic illness (Parkinson’s Disease, Multiple Sclerosis, Alzheimer’s, Stiff Person Syndrome and more) sufferers and their heroic caregivers.