"There's a 20% chance a 35-year-old will become disabled before 65, erasing years of savings.": I'm 22 with no dependents-should I wait to purchase long-term disability coverage?

Hey Money Minder,

So here’s the deal with my finances:

I’m starting a new job in August where I’ll get disability coverage (STD and LTD) through Lincoln Financial at no cost to me.
My annual salary is $53,000 gross.
My current net worth is -$25,400 due to federal student loan debt.

I’ve been diving into the Boglehead’s guide to investing and it’s got me thinking. It mentions that I should consider buying my own disability policy with after-tax dollars instead of relying solely on my employer’s coverage. What do you think about that advice, especially considering my age? Is it too early for me to be looking into this on my own?

Thanks for any help you can offer!

Cheers,

Financially Curious

Response from THE MONEY MINDER:

Hello There,

Congratulations on securing disability coverage through your new employer! It’s great to hear that you are proactive about your financial security and are considering your options wisely. The Boglehead’s guide to investing provides valuable insights into the importance of disability insurance, highlighting the risks of depending solely on employer-provided coverage.

Given your age and current financial situation, it is understandable to weigh the pros and cons of purchasing your own disability policy. While the book presents compelling statistics on disability risks, it’s essential to assess your individual needs and financial goals before making a decision.

In your case, considering your annual salary and existing student loan debt, it may be advisable to prioritize paying off your debts and building an emergency fund before investing in additional insurance policies. Evaluating your overall financial health and setting clear financial goals should guide your decision-making process.

Since your employer already offers disability coverage, you have a valuable safety net in place. As you continue to progress in your career and improve your financial standing, you can revisit the option of purchasing a personal disability policy if it aligns with your long-term financial strategy.

Remember, financial planning is a journey, and it’s essential to make informed decisions that support your financial well-being. Keep educating yourself on personal finance matters and seek guidance from financial professionals if needed. All the best from THE MONEY MINDER as you navigate your financial future.