If The Unexpected Happens, Are You and Your Family Protected?
Let's talk about death and disability benefits - what you already have and what you need to get.
Hi all!
There are many wonderful aspects of leaving teaching and working outside of the school schedule - no clocking in for work at an early hour, you can take vacation outside of the peak travel weeks of the year, and you can go to a doctor’s appointment in the middle of the day when needed.
But all benefits come with compromises - one of the biggest being summer break! Though I like the flexibility of being self-employed, I so miss summer break in teaching and having two months off in the best weather! Though I am planning to take some time off this summer, it’s not quite the same.
Anyway, congrats to all of the educators finishing up their last week of school here in the northeast! You deserve some peace after the busy weeks at the end of the school year!
Enjoy turning your morning alarms off, reading all the beach novels, and ignoring your emails. But if you’re ready for a little productivity, I’ve got some tips below on what to do to prepare for a worse-case scenario…
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Many of my financial planning clients come to me looking for a “financial check up” on their finances after they’ve been managing their money on their own for years.
They have questions around how much to contribute to Roth retirement accounts vs. traditional retirement accounts. They want an expert review of their retirement plan, and if they’re contributing enough and to the right accounts to retire by a certain age. They’d like some help setting up their TDA allocations or investing the money in their Roth.
With financial planning, we get to work together to make sure you’re doing all that you can to align your money to your goals, that your investments are optimized, and that you’re protected in case of emergency.
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What happens if you get hit by the bus tomorrow?
When I work with my ongoing financial planning clients, we work through a series of initial planning meetings tackling one financial topic at a time. And I save the toughest meeting topic for last…
Officially, our last meeting is called the “Risk Management” session, but I joke with clients that it’s really the “if you get hit by the bus” meeting.
We’re talking about the dark stuff - if you die unexpectedly or become ill or injured, what happens to you and your family?
So, what if you get hit by a bus tomorrow morning on your way to work? What happens?
If you pass away while in service in the NYC DOE:
Assuming you’ve been working for the NYC DOE for 3 years or longer, your QPP beneficiaries will receive 3x your salary as a death benefit
Your UFT Welfare Fund beneficiaries will receive a flat $50,000
Your TDA beneficiaries will inherit the balance of your TDA
*Paraprofessionals, btw, are also covered by a small life insurance policy through the UFT
See a recurring theme here? BENEFICIARIES! They’re so important!
Put a half an hour on the calendar this week to check your TRS (or your pension system) beneficiaries, as well as the beneficiaries for your investment accounts and union benefits. Make sure the people you want to receive money in your name are listed!
Outside of automatic employer death benefits, your listed beneficiaries will also inherit any other bank and investment accounts you have, as well as life insurance pay outs.
(Life insurance is a whole other topic we’ll cover in a future newsletter, but in short, if there is anyone who depends on your income, like a spouse, children, or other family, you should have adequate term life insurance in place!)
Now, what if you get hit by that bus and are alive, but grievously injured?
You’ll be able to use your sick days and borrowed days, but eventually, you may need to take leave without pay. The UFT Welfare Fund offers long-term disability insurance during this time, but it’s capped at $475-$575/month.
For this reason, I highly, highly suggest signing up for your own long-term disability insurance policy, because being unable to work for a long period of time would otherwise cause a huge drop in income.
You can get quotes for disability insurance through your union/district (NYSUT for New York educators), as well as private insurance quotes (PolicyGenius is great for pulling multiple quotes).
What to do to protect yourself and your family in case of emergency:
Review and understand your employer death and disability benefits
Make sure your beneficiaries are updated for your pension, investments, and insurance policies
Enroll in term life insurance if you have dependents (and need more coverage than what your employer provides)
Enroll in long-term disability insurance (if you need more coverage than what your employer provides)
Complete and update your estate planning documents (will, Power of Attorney, etc.)
Want help making sure you and your family are covered in case of emergency? I cover emergency savings, estate plans, wills, beneficiary reviews, insurance analysis and more for all of my Comprehensive Financial Planning and One-Time Financial Plan clients!
Talk soon!
Emily
Educated Financial Planning offers comprehensive financial planning, one-time financial plans, and financial check-in services. We are a fiduciary, fee-only firm and do not sell financial products.
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Educated Financial Planning, LLC is a registered investment advisor offering advisory services in New York and in other jurisdictions where exempted. This newsletter is for informational purposes only. Opinions expressed herein are solely those of Educated Financial Planning, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by the firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.