How a Former Software Tester Does Money

Photo credit: joey zanotti, CC BY 2.0.

Kathy is a 55-year-old former software tester in Los Angeles.

So, Kathy, how much are you making?

Hubby makes $25 an hour and works 40-50 hours a week. I am waiting on Social Security to decide if I am “disabled enough,” so I don’t bring in any income right now.

Consider my tale a cautionary one.

In what sense?

Two ways… First, if you run your own business, make sure you make Social Security payments every year. Even if an accountant tells you that you don’t need to.

I have been disabled for the most part since 2009 or so. I was even approved for Social Security on my first try back then. Until… until the person doing the paperwork discovered I didn’t have enough quarters to be eligible.

You have to have paid into Social Security for so many quarters in the last 10 years in order to be eligible for SSDI (Social Security Disability Insurance). If you don’t have the quarters, you won’t ever get the benefits. It was quite a shock to learn that. I had to go back to work for three years to have enough quarters to re-apply.

Let me know if you have questions. Really want to make sure this part is clear before I move on to the other half of the cautionary tale.

I think I’ve got it: an accountant told you you didn’t need to pay Social Security, so when you needed Social Security benefits you hadn’t put in enough money to get them.¬†Right?

YUP. And it is something too many accountants tell people.

Okay, bring on Part Two.

The second half: Things can change in an instant.

Disabilities don’t just hit people who are old, poor, etc. Here in the U.S., even with the ACA, you can go broke paying for medical treatment. I had six knee surgeries in five years. We had reasonable insurance at that time. It still cost us $10-20K.

Once things change, you need to be ready to flow with the changes. We didn’t save enough. But even if we had, those years would have killed a good part of our savings anyway. (That message is part of why I love your series.)

Would you like to know where our money goes now? it is very different than people would guess.

Yes, please share!

$1K a month for rent. $585 a month for my insurance premium. $97 a WEEK for hubby’s insurance premium. What’s left pays the bills, the med costs, the co-pays, and the other normal expenses.

We splurge a bit on mobile charges; our bill is $150ish a month. Same with cable. I can’t be disconnected from the world. I keep busy by volunteering with a number of online organizations. Without those connections and my writing, I go more than a bit down the depression path.

Which is important. People who say you should cut cable/entertainment ignore how essential is to be connected to the world.

Do you have any savings at this point? Are you focusing on saving at all?

We do not have savings directly. When I get approved for disability, I will get back payments. That will be a lump sum amount. Monthly benefit times the number of months it takes them to approve me. We are currently at 18 months. It could be up to another year more.

Out of that payment comes tax (on 85 percent of it in our income range) and $7,500 to my SSDI lawyer. Luckily, his rates are set by SSDI. If we had to pay him up front or normal fees, it would be twice that.

That lump payment will become our savings.

How do you feel about your financial situation? Do you have short and long-term goals, or is it more like “I’m going to get through the day/month/year” and that’s all that matters?

We are definitely in the “let’s get through this month” period. And I hate it. It is scary and frustrating. No one should have to live this way.

If his job had reasonable insurance, our premiums would be cut in half. That money could be going to savings.

What kind of financial goals did you have prior to your big change? How did your approach to money shift as you went with the flow, as it were?

Prior to that, we had some savings. We also owned our home. When we sold that home, it’s price had doubled. That income should have gone to retirement. Instead it went into a startup that failed. That was a big mistake on our part.

What do you think your retirement will look like now?

When I get approved for disability, I will get the same monthly stipend for the rest of my life. (Probably about $1,500 a month.) When I get my disability approval, we hope to move to a cheaper part of California. Hubby’s income plus my disability will allow us to save.

One thing most people don’t realize: once you go on full disability, you go on Medicaid. Huge drop in personal health insurance costs.

Good point.

We will actually be better off when we have both retired than we are now.

That’s what I was wondering. It’s unfortunate that healthcare is so expensive even with insurance. And that one bad break can change an entire financial trajectory.

Exactly.

With that in mind, my last question: what advice do you have for Billfold readers?

This is going to sound backwards, but… here goes.

Take care of yourself. But don’t forget that there are others who need help too. Know inside yourself how much you can do for others without hurting yourself. (Serial volunteer in me coming out there.)

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