Retirement challenges: Disability and earning potential

Blog | Retirement challenges: Disability and earning potential

If you have an aging workforce, you’re probably receiving plenty of questions about retirement as employees prepare for life after age 65 — and building retirement savings likely is top of mind for all, regardless of age. Research has shown, however, that households retiring in the future will not be nearly as prepared as those in the past.1

Retirement saving already is difficult enough for most people. In fact, as retirees, only about half of U.S. households will be able to maintain the same standard of living they had before retirement.1 So what happens if the time they’re able to save is cut short?

As a human resources manager, you know disability insurance provides a safety net for your employees should they become unable to work. But there are two caveats with this scenario, especially for employees who may experience a severe disability or illness:

  1. Disability insurance only covers a certain percentage of income, meaning there could be a significant gap in an employee’s earning potential and ability to tuck away sufficient funds for retirement.
  2. This income has a maximum benefit period that likely will end at age 65 or at a normal Social Security retirement age.

How can you help employees with severe disabilities deal with this potential gap in their earning potential and ensure they’re taken care of during retirement? Consider adding a rider to your disability plan to help ensure employees with severe disabilities can continue to receive disability payments after the maximum benefit period ends.

Adding this type of benefit can help provide income security for life. Even if employees don’t use the benefit, showcasing it as part of your benefits package can be used to help with employee recruitment and retention. Employees may appreciate knowing that an employer is interested in their financial health after retirement.

A severe disability doesn’t necessarily equal an uncertain retirement future. Help employees prepare for potential retirement challenges and consider how they’ll be taken care of long after they leave your company.

About guest blogger Breanna Scott
Breanna Scott, marketing product manager with Standard Insurance Company (The Standard), is responsible for the company’s long term disability product, as well as employee assistance and Workplace Possibilities℠ programs. A graduate of the University of Oregon, Breanna has been with The Standard for nine years and previously served as a long term disability benefits analyst with the company before assuming her current role.

1Are retirees falling short? Reconciling the conflicting evidence, Center for Retirement Research at Boston College, November 2014,

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