The Financial Implications of Living with a Serious Illness

Featuring John Burris, Branch Experience Leader | Mutual Fund Representative, Valley Credit Union

Money. We all need it. But what happens when your health means you can’t earn it? Or your diagnosis means you need way more of it. Or what about what to do with it once your time is up?

Thinking about the financial side of living with a serious illness isn’t something that most people want to do, but it’s something everyone—regardless of how healthy you are—should have a conversation about.

With finances—as with your health—an ounce of prevention is really the best medicine. This means seeking out financial advice and having a solid plan in place before that tickle in your throat turns into something more serious.

For those who live with chronic illness, planning for the future—however near or far it may be—is still important. There are special funds like a Registered Disability Savings Plan (RDSP) available specifically for those living with illnesses or disabilities.

Like other registered savings plans—like a Registered Retirement Savings Plan (RRSP)—RDSP earnings grow tax-free until the money is taken out of the plan. But unlike an RRSP, you can’t use your RDSP to borrow toward a down payment on a home or to go back to school. However, the main benefit of an RDSP is government incentives—the government will offer grants of up to $3,500/year or a maximum lifetime amount of $70,000, or bonds of anywhere from $1,000 annually to a lifetime maximum of $20,000. That’s basically free money. And who doesn’t want some free money?

Then there’s the question of what happens to your money once you shuffle off to your mortal coil. Whether you have fat stacks in the bank or barely enough change to buy a coffee, making sure your affairs are in order once you pass away can save your family and loved ones a lot of stress and financial hardship when the time comes. That’s where a trusted financial expert can come in handy, too. It’s important to have a will, but that’s really only one part of the financial pie. Your financial expert can help guide you and provide valuable information about your options.

For me, doing this podcast was such a reminder of the role the planner needs to play in the lives of their clients. It’s easy to get caught up in the day-to-day and to be more reactive, but the real value we can provide is in playing a more proactive role in helping our members manage their finances.

Unfortunately, it’s simply inevitable that the great majority of us are going to be affected by illness at some point. As planners, it is so important that we continually educate and update ourselves to make sure we’re the person our members can trust because we have (or can easily find) the information they need.

Ultimately, I do this job for my clients. I am here to serve them and provide the expert perspective they need. And that’s especially valuable when times are tough or stressful. And if your planner isn’t making you feel that way, then it’s time to move on and find somebody else.