More than half (61%) of disability-affected retirees said they did not save enough money for retirement, compared to 41% of non-disability-affected retirees, according to recent research from the nonprofit Employee Benefit Research Institute. 

According to EBRI, one in three Americans aged 65 and older has at least one disability, and of that group, 74% of retirees reported retiring earlier than anticipated. That compares to slightly less than half (49%) of non-disability-affected retirees. 

“It is imperative for the benefits industry and policy community to collaborate on solutions that will help this population maintain and, ideally, improve their quality of life,” wrote Bridget Bearden, EBRI’s director of institutional marketing, in a report summarizing the research. “While private employment-based benefits have limited ability to improve the quality of life of current disability-affected retirees (barring a return to work or programs for current caregivers), there are many opportunities to help future disability-affected retirees.” 

EBRI’s report, “The Impact of Disability on Spending in Retirement,” examined the impact of disability on various aspects of retirement preparedness. The research found that retirees with a disability were likely to have fewer than half as many assets as those without a disability. Disability-affected individuals subsequently had lower median and average values of household financial assets and were less likely to say they have an “easily manageable level of debt.” They were also more likely to report debt outstanding across all types, and credit card and medical debt stood out as the largest differences from non-disabled retirees. 

Those with disabilities face higher costs for necessities such as housing and out-of-pocket medical costs, Bearden found, with non-disabled retirees spending more on average on entertainment and other expenses.  

The survey classified retirees as disability-affected if they received disability income; reported their personal or spousal working status as with disability; or retired due to disability or a health problem not related to COVID-19. 

Many disabled retirees also had less knowledge or information needed to manage expenses. On average, one in six disability-affected retirees reported difficulty making budgeting decisions, while one in 10 non-disability-affected retirees reported the same.  

Advisers and plan sponsors can do more to help disabled workers or near-retirees, according to EBRI’s report. Bearden suggested that employers offer educational resources on federally funded disability programs, focused employee resource groups and specialized financial planning. The latter can take into account disability insurance, higher medical costs in retirement and earlier actual retirements into planning, Bearden wrote.  

“While many disabilities are acquired with age, many are also identified during working careers or earlier, justifying the offering of accidental, short-term and long-term disability insurance benefits, as well as long-term care insurance,” she wrote. “In addition, employers could enable employee contributions and offer a match to Achieving a Better Life Experience (ABLE) accounts, which [will] now have an increased age maximum for enrollment of 46 years old, effective December 31, 2025, through [the] SECURE 2.0 [Act of 2022].”