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Ask Dave

Long-Term Length?

Bill should get long-term disability and carry it his entire life, but he shouldn't buy disability insurance pre-tax.

QUESTION: Bill asks if he should have long-term disability and, if yes, how much for how long.

ANSWER: Yes, you should have long-term disability and carry it your entire life.  You should carry all you can get – which is usually 60% - 70% of your income.  Don’t buy disability insurance pre-tax.  If you get it through work, pre-tax, then your disability income is taxable, and you don’t want that.