My Survivorship A to Z Guide

Credit has new uses for people with a health condition as you will see elsewhere on this site. Credit scores are used for more and more purposes - including when setting homeowners and automobile insurance premiums, and when employers decide who to hire.

Learn what goes into a credit score. Your credit score is a short hand system used by the national credit bureaus to give potential lenders an idea of your credit worthiness. The factors are simple and can keep you from hurting your score unintentionally.

• Check what the credit bureaus say about you. It's free. Make an alert in your computer or on your calendar to check with the credit bureaus at least once a year. Checking helps correct mistakes. It also helps stop identity theft.
• Fix mistakes. If the company won't correct them, you have the right to make comments that have to be included on your report. You don't need a credit counseling company to do it for you. (If you're not up to it, ask a friend.)
• Get as much credit as you can.
• If you have credit balances, move the balances to the card with the lowest rate of interest. Check charges to make a transfer before moving money to be sure a move is worthwhile. Also watch for late fees. If you get to a point where you think you are at the end of your life, move balances to the cards with life insurance.
• Do everything you can to protect your credit. Missteps can be costly.

Watch for identity theft. It only takes a few minutes every couple of months. The last thing you need is to go through the awful time consuming hassle of fixing this kind of problem - and possibly losing a lot of money.

• An alert in your computer or a notation in your diary can remind you to make the calls to the credit bureaus. 
• Don't give your Social Security number to people who call you.
• Consider putting a freeze on new accounts if the law permits it in your state.

Over 50% of the personal bankruptcies in this country involve health care costs, including people who have health insurance.

While this may sound scary, think of it as a call to action. Don't let general fear about money drain your energy. Push the thought aside with action.

If you get into a financial crunch, there are steps to take.

This subject is likely to bring up all sorts of emotions, including "if only I had......." If emotions get overwhelming, put your Plan aside for the moment, but come back to it or ask someone to help you. Finances are important to your well-being.

Use credit instead of cash when possible, as discussed above.

Unless you have it already, start working toward a goal of a cash fund equal to 3 to 6 months of monthly expenses. This is the amount of money generally recommended to tide you over periods of no income or unexpected expense. It doesn't mean you have to put this much money away today. However, now is the time to start. (If you work in a specialized area where there are very few jobs, aim for 12 months of expenses in your fund.)

You can still buy life insurance in spite of your health condition.

A reasonable goal is to have enough life insurance so that if you die tomorrow your dependents can live the lifestyle they now enjoy until they finish school or can become independent. If the need decreases over time, there are policies in which the amount of the death benefit decreases over time. 

As you'll see in the category Insurance, life insurance can be an important asset if you need money while you're alive.

You can still get life insurance in spite of your health condition, for instance:

• Through work.
• "Guaranteed issue" -- policies which don't ask any health questions. These policies are usually for a smaller amount, but the amounts can add up quickly.
• "Simplified issue" -- where only a few health questions are asked, such as whether you've been hospitalized in the past 12 months.

Put as much money as you can spare to the maximum permitted into your retirement accounts. Saving tax dollars is the same as earning extra money. You can usually withdraw money or borrow it if necessary. If you become disabled, withdrawals are without penalty. Plus, money in a retirement account is protected from creditors. If you have a choice of accounts:

• First priority is to fund accounts in which your employer matches your contribution. The value of your contribution is increased as soon as you put it into the account.
• Then consider:
• Which accounts are easier to withdraw money from or borrow against in case of unexpected expense. Pay particular attention to when you can do these things as well as the costs you'll pay, such as penalties.
• Which accounts are earning you the most money.
• If you need help with this decision, speak with a financial planner, your accountant or attorney.

If you still have money left, open new accounts to the maximum permitted by the tax laws.

Insurance for your possessions, home etc is more important than ever. A large financial loss could be particularly devastating. Make sure your needs are covered, and at a reasonable price. To learn more, see Insurance category.

Understanding where you are financially is important. It doesn't have to take a lot of time. You can use ballpark numbers or guesstimates to get an idea of what could be ahead. Our calculators will help guide you through the process.

• Get a real picture of where you and your family are financially at this point in time by preparing a Net Worth Statement. Include all assets and all debts, including medically related debts which are not covered by insurance.
• Understand what is likely to happen financially if you stay on the track you're on. Prepare a Cash Flow Statement.
• Rework the numbers to get an idea of what would happen if you become unable to work, or your partner's income drops to take care of you. Include income from Social Security. (You can easily find out how much Social Security income you'll get, if any by going to www.SSA.gov and looking up your Social Security statement.) Also include increased expenses you're likely going to be paying, including for health care. Our worksheets will help you through the process. If the result is a short fall, use our calculator to find out how long your money will last.
• On the other hand, expect the best: do the calculations to find out how much money you need to reach your goals.
• If there's a shortfall, there are steps to take to help you get on a better financial footing described in the articles in To Learn More.

As a person with HIV who is not disabled, you could have years of health and gainful activity. In fact, you could live a normal life span.

Consider the following guidelines with respect to your investments:

• A strategy focused on growth, with built-in liquidity "just in case" - at least until you have sufficient cash available to tide you over no matter what happens.
• A plan that is somewhat less risky than that of the average person of your age who has no health concerns.
• Avoid complicated investments that are difficult to sell quickly in case your health changes and you need to change strategies without delay.
• If you have to spend principal when you are not earning income, keep in mind that your potential to realize interest income decreases.
• Keep in mind that, if necessary, cash may be available through the new uses of assets as described elsewhere in this guide.
• Consider consulting with an investment advisor about your investment plans.

The Threshold (basically the same as a deductible because what you pay under the threshold is not deductible)

The Health Care Reform law modifies the tax treatment of medical expenses. Until December 31, 2012, the threshold for the itemized deduction for unreimbursed medical expenses was 7.5% of the taxpayer’s Adjusted Gross Income (AGI). That threshold has been raised to 10% of AGI effective for tax years beginning after Dec. 31, 2012. However, in the years 2013–2016, if either the taxpayer or the taxpayer’s spouse has turned 65 before the close of the tax year, the increased threshold does not apply and the threshold remains at 7.5% of AGI. In 2017 the 10% threshold will apply to all taxpayers.

Planning

If you and your spouse file separate returns, it is preferable for the person with the lower income to pay the medical bills. Otherwise, there may be a deduction that would otherwise be lost. The following example uses a threshold of 7.5%.  The planning idea works the same for the 10% threshold.

• A' s Adjusted Gross Income is $100,000 a year 
• B's Adjusted Gross Income is $50,000 a year 
• A's medical expense for the year is expected to be around $7,000.

If A pays the medical bills, there is no deduction. On the other hand, if B pays the medical expenses, there is a deduction in the amount of $3,250.00 calculated as follows: $50,000 x 7.5% = $3,750. $7,000 less $3,750 = $3,250.

Just because a medical expense is not covered by health insurance, does not mean it's not deductible. For example:

• The cost of changing your home to accommodate any physical needs is deductible -- at least to the extent it does not increase the value of your property.
• A wig for hair falling out due to a treatment may be deductible if it is prescribed by your doctor as a cranial prosthesis.
• Transportation expenses:
  • Locally, to and from your doctor appointments and treatments in the area in which you live are deductible medical expenses. In addition to the costs of getting to your doctor's appointment or treatments, you can deduct the cost of transportation to pick up prescriptions at the pharmacy, and to pick up medically related items such as your eyeglasses. 
  • Travel outside of where you live may also be deductible if the trip is primarily for, and essential to, receiving medical services.
  • Transportation for qualified long-term care services is not a deductible medical expense.

Transportation expenses to obtain medical care in the area in which you live are deductible. In addition to the costs of getting to your doctor's appointment or treatments, you can deduct the cost of transportation to pick up prescriptions at the pharmacy, to pick up your eyeglasses. 

Travel outside of where you live may also be deductible.  if the trip is primarily for, and essential to, receiving medical services.

Transportation for qualified long-term care services is not a deductible medical expense.

With respect to hospital bills:

You and your patient advocate are the only pepeople besides the hospital staff who know what services you did and did not receive. Billing codes are complicated and studies show that many hospital bills have errors.

With respect to all other medical bills:

• It's worth the effort.
  • You'll know what's been paid and by whom so when you start getting phone calls from insistent collectors, you'll be able to respond quickly and accurately. It's much easier than avoiding phone calls or being put in an embarrassing situation.
  • You'll have less to do at tax time.
  • You can check for accuracy. Particularly hospital bills are notoriously full of errors.
• Your filing system can be very simple. Use your own system or see ours for an example of an easy system to use.
• It is advisable to stay up-to-date. Catching up can be overwhelming. This is a perfect chore to ask someone else who is organized to do for you.