Reader Case: Can’t Work Because of Health Issues and Worried

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Hi everyone!

What day is it? It’s reader case day! Today’s reader case has been dealt a bad hand health-wise, and can no longer work. A bad situation, to be sure, but can mathing shit up give us a path forward? Read on and find out!


Hello, 

Like many of your readers, I think your story, book and blog might just changed our lives. I really would appreciate help in determining how to improve our financial situation.

Quick Story

I am married with a fabulous husband, a 13 year old son and we live in Edmonton Alberta.

I collapsed at my job (another story of stress and trauma from overwork) not once, but twice. I loved my government job and felt connected to it, but was overworked to the bone. After 7 years my body just refused to work anymore. I have periods of vision loss, times where I lose use of the entire side of my left body.. my brain stopped working. July 2019 was my last day of work. I was terrified I was going to die and more terrified I was going to leave my husband with debt.

I had nearly $30,000 of consumer debt and felt lost and knew that I had to tackle my debt asap because I didn’t want to leave that to my husband. I paid off all my debt in 18 months. It felt so liberating and freeing. One fear was gone.

In May 2022 I was diagnosed with an autonomic condition for which there is no cure. I have to spend my days managing ever changing symptoms and my life has drastically been altered. I cannot work. I am extremely fortunate that I had paid into a life and disability plan, and I have had income replacement. 

Fast Forward to Today

After accepting that I will not return to work and starting the government Cpp-Disability plan, I know my husband and I need a financial path forward. I want my husband to work less, and I worry about being reliant on the pay from my insurance company to help fund our life. I bought your book because I needed to ask myself the question: ” how can I make $3000 a month when I cannot work?” 

My husband’s goal isn’t to stop working, he is an officer and loves his job, He works shifts and it allows him a good amount of vacation and flexibility. What we want is to be able for him to take LWOP – leave without pay for 2 months out of the year so we can travel and spend time with our family.

Our Numbers:

I tend to be the one who manages all expenses, pays all the bills etc. My husband arranges the mortgage and is in charge of saving his pay cheques as much as possible.  Our goal has been to pay down our home. We bought a smaller affordable house for $364,000. The value is about $460,000 now. We are almost done paying off our mortgage and we have been aggressively putting extra money into this to get to “Freedom 2025.” Mortgage rate is 1.69% coming due Oct 2025.

My income: $4445.46

Husband’s Income: $5000.00( varies on overtime shifts)

Total NET Monthly: $9445.46

Fixed Expenses per Month: $1179.00

Mortgage Payment: $3000.00 (MORTGAGE IS FINISHED OCT 1, 2025 We have been really aggressive with this.)

Variable Expenses per month: $2000-$2500

Debt: $0.00 

We own both our vehicles total value for both is about: $47,000

———

Investments/Savings

Mine:

Investment Questrade: $1000.00 (using your workshop)

Investment Tangerine: $1003.00 (one hot mess)

Cash Savings EQ : $2000.00

Disability RDSP Investments

RDSP Husband: $7755.72

RDSP Sav: $3060.00  (TD Disability accounts that the Gov contributes to. We have invested these into 25% Bonds and 75% Equities. Not intending to take these out until age 65. Contribute $470.00 a month between the two of us to these. They have to be seperate and with TD as per gov regulations).

Husband:

Tangerine Cash account: $3,400.00

Tangerine Cash Savings: $16,591.66

TD RESP: $33,650.69

TD Mutual Fund RESP Plan: $14,506.75

TD Multi-Holding TFSA: $10,665.47

Tangerine Balanced Growth Investment RRSP: $45,416.88

Tangerine Balanced Growth TFSA: $2,671. 92

Tangerine Equity Growth TFSA: $2,737.63 

Tangerine Term GIC (Sept, 2025): $31,203.39

EQ Bank 3% Savings: $50,152.00

*these items in bold are marked to pay off the $70,000 we are projecting to need in 2025 to finish our mortgage. 

We both have government pensions – mine is still being contributed to even though I am on long term disability, it is employer funded for now. Husband contributes to his pension through work. His pension will be about half of his income when he can retire at age 57.  We are both 39 years old right now. 

Questions I have:

Is there a better way to organize this and invest to start making passive income so I don’t have the stress of worrying about the insurance company one day cutting off my benefits and my husband can work less until he retires?

We are also curious about buying a rental property with 3 units and moving to live in one of the units and making income off the 2 other units. We would have to get a new mortgage and estimate this property cost would be about $650,000 – $700,000.  Is it smarter to invest and stay where we are at being mortgage free in 2 years, or roll our equity into a rental (keep all our cash and investments) and then have roughly $1000.00 extra coming on every month after our mortgage and fixed expenses are cleared.   I tried to math shit up.. and these are the rough numbers I came up based on the current rental market and housing costs. 

Are there blind spots I am missing? What am I not putting together?

THANKS so much for any time and effort you have to give to this. 

Best Regards, 

CantWorkAndStressed


Yikes, that is a lot of stuff going on.

Disabled and unable to work is not a situation I would ever wish anyone to be in, but sometimes life just deals you a shit hand and we just have to muddle through it.

First, let’s gather up all these numbers into a financial summary. Then we can see where we can go from there.

SummaryAmount
Income$9445.46 net per month, $113,345.52 per year
Expenses$3,679 + $3000 mortgage = $6,679 per month, $80,148 per year
Investible Assets$1000 + $1003 + $2000 + $7755.52 (RDSP) + $3060 (RDSP) + $3400 + $16,591.66 + $10,665.47 (TFSA) + $45,416.88 (RRSP) + $2,671. 92 (TFSA) + $2,737.63 (TFSA) + $31,203.39 (GIC) + $50,152.00 = $177,657.47
Debt$70,000 (mortgage balance 2025)

A few notes about our summary table. I didn’t include the RESP under investible assets because that’s money that’s earmarked for their kid’s education, but we will talk about the RESP a bit later. And normally, I don’t include the mortgage balance under debt because for most people, the mortgage is an ongoing monthly cost that won’t be paid off anytime soon. However, this couple’s actually planning on killing off their mortgage in the next few years, so we’re actually going to put this upcoming expense here so we can track it.

So what can we do with these numbers? To find out, let’s MATH SHIT UP!

Simplify Your Life

Even by glancing at the above table, you can see that our reader has lots of different accounts spread across many different companies. At first glance, this might not seem like that big a deal, but I am a firm believer of financial ergonomics: Make it easy to manage your money, and you’re more likely to do it.

Here’s how you do it: For each role your money is playing, pick one account at one bank and move the money you want to put towards that role into it. For example, you would want one bucket for your checking/day-to-day expenses, one bucket for your housing payoff fund, one bucket for your long-term investing, etc. And each role should have its own investment strategy. If you want to put your retirement investments into mutual funds, fine. But you shouldn’t spread it across different banks with different investment strategies in all of them. Pick a single strategy and stick with it.

Deleveraging for the Win!

CantWorkAndStressed at one point describes her symptoms as including vision loss, paralysis, and her “brain stopped working.” That sounds pretty scary, and I’m really sorry she had to go through that. But one part of her brain that IS firing on all cylinders is that part that told her to pay off her debt, because that was exactly the right thing to do!

$30k of consumer debt is definitely a big scary thing to deal with on top of a medical situation, and the fact that she tackled it so quickly and aggressively is something she should be proud of.

But not only that, she took that same attitude and is now applying it to her mortgage! I said over and over during the pandemic that when interest rates are sitting at record lows, the right strategy is to refinance your existing debt and pay it down. Of course, most people went the exact opposite direction, using low mortgage rates as an excuse to splurge on overinflated real estate, and are now screwed as interest rates skyrocket and their mortgages renew at higher rates, but CantWorkAndStressed actually did the right thing and is on the verge of nuking their mortgage while it’s still sitting at a sweet-ass 1.69%!

Just imagine the look on that banker’s face when she walks into their office come renewal time. They’re sitting there all smug thinking they’re about to throw you under the bus but then, BAM! She slams 70 large down and goes “I win, be-atch!”

So. Awesome.

Once that mortgage gets paid off, $3000 drops off her monthly expenses, which will make a huge impact on our cash flow, as we’ll see in a bit.

Optimize Your Tax-Free Accounts

One thing that did jump out at me is that CantWorkAndStressed may not be contributing the optimized amounts to their registered accounts. First, let’s take a look at the RDSP.

The RDSP is a savings plan meant to help people with disabilities save for retirement, and the main benefit of the plan over a general-purpose savings plan like the TFSA is the government grants that you get. You can read more about the RDSP here, but basically, you can get up to $3500 a year if your family income is below $106,717 and you contribute $1500, or $1000 a year if your family income is above that (Source: CRA’s website).

Family Net IncomeContributionsGrantAnnual MaximumLifetime Limit
$106,717 or lessOn the first $500$3 for every $1 contributed$1,500$70,000
On the next $1,000$2 for every $1 contributed$2,000$70,000
Greater than $106,717On the first $1,000$1 for every $1 contributed$1,000$70,000

The income used to calculate this is based on your income from 2 years ago, so our reader will have to see what they reported on their tax return from 2021, and depending on that number the benefit maxes out when you contribute $1000/$1500 a year.

CantWorkAndStressed wrote that she’s currently contributing $470 a month to her RDSP, or $5,640 a year, which is way too high. At that rate, you’re actually locking money into the RDSP unnecessarily without getting the benefit. Depending on her income from 2 years ago, she should cap her contributions at $1000 or $1500 per year, and then stop. Any extra savings is better redirected towards her TFSA instead.

Speaking of her TFSA, both her and her husband are way underutilizing her TFSA room. At this point, both of them should have $88,000 (ooh, lucky!) of TFSA contribution room each, yet their cumulative TFSA balance is just over $16k. That’s a LOT of unused TFSA contribution room!

If they all of their non-registered investments into their TFSA, they’d still have room left over. And since you can withdraw from your TFSA any time without losing contribution room, there’s really no downside to doing this. Do it now, and kiss paying taxes on your investments goodbye forever!

Finally, the RESP. They’ve done a fantastic job saving up for their child’s education so far, which is great. But keep in mind, the main benefit of the RESP over a TFSA is that you get government grants, specifically 20% of your yearly contributions up to $500 a year. There’s also a maximum lifetime limit of $7200 in these payments, so assuming our reader has contributed $2500 a year to get the $500 grant every year of their child’s life, they’re going to his this $7200 max in $7200 / $500 = 14.4 years. Since the child is currently 13, this may happen in the next 2 years, so she should keep a careful eye on how much RESP grant money she’s gotten, and once it hits $7200, cut off further contributions to the RESP.

Cash Flow Is King

And now onto her main question, can her husband take 2 months of the year off to go travelling and enjoy life?

In short, YES.

Mainly because they’ve done such a good job of paying off their debt. Once their mortgage is paid off, that $3000 monthly expense drops off, leaving their fixed + variable expenses at $3679 per month. Their after-tax incomes are $4445.46 (hers) and $5000 (his) a month, so this means that once the mortgage is gone, they can live off just one income if they need to.

This means two things: Her husband can definitely take two months of the year off, since her income alone will be enough to keep them in the black. It also means that she’s safe if their insurance company cuts her off. Their expenses are so low that her husband’s job is more than enough to keep their cash flow positive.

Finally, the question about the duplex. Ehhhh, I’m really not liking that idea. Your numbers look fantastic, but only because you’re about to pay off your low-rate mortgage. If you sell now and buy a duplex, you’ll be giving up your killer 1.69% rate for a new mortgage at 6%+. Plus then, you’ll be a landlord. That is a physically gruelling job that involved lots of heavy lifting, shovelling snow, and fixing leaking faucets. Given that your health issues make you more vulnerable to injury, you’d be risking something very precious (your health) for $1000 a month. Not worth it, in my opinion.

Conclusion

All in all, CantWorkAndStressed really shouldn’t be that stressed after all, because her decision to deleverage when rates hit rock-bottom basically put her on a path to financial safety and security. This is especially remarkable since most people went in the opposite direction during the pandemic and are now screwed. As long as she doesn’t fall for the siren song of real estate investing, she should be able to cruise her way to victory.

What do you think? Would you stay on course, or do the landlord thing? Let’s hear it in the comments below!


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24 thoughts on “Reader Case: Can’t Work Because of Health Issues and Worried”

  1. Another excellent post. I so agree with the “not worth it” of taking on Landlord responsibilities in their circumstance. They have almost won the game, and can look forward to not having to take risk they don’t need.

  2. I totally agree with you that she should not buy a rental. My husband who worked 12 hours a night as a machinist had to retire early at age 64 due to health issues. We had some rentals but have been selling them off because they are a lot of work. (Our original plan was to have 10 rentals to live off during retirement but it really ties you down if you want to go visiting. We don’t need much to live on. Our biggest expense is medical bills and insurance.) Plus you have a big liability if the tenants decide not to pay rent and live in your house rent free. I’ve known quite a few landlords that have had trouble paying their bills during COVID when your tenants were allowed to live in your house rent free while you still had to pay taxes, insurance, and keep up maintenance. That has not happened to us yet but if it did I would sell our remaining rental to an younger investor who has the energy to deal with this.

  3. Stay the course! Do NOT do the landlord thing. Why give up your freedom when you are so close to the mortgage debt free promised land? Being a landlord is not always a walk in the park. Why risk care free vacation time on potential emergency rental unit repairs? There’s always some maintenance issue that comes up – usually at the most inopportune times. And with two rental units, that risk is doubled. For what? A measly $500 per month per unit? I would stick with the plan Wanderer has laid out for you. The idea is to REDUCE stress. Being a landlord only ADDS stress. You’ve worked so hard paying off your consumer debt; now stay the course to reap the benefits of paying off your mortgage debt.

  4. Totally agree with the “not worth it.” We became mortgage free last year with some very lucky-timed selling of our house and were able to purchase a smaller home (only two of us) for cash. We’ve gone back and forth several times on doing the rental thing, and every time we come to the same conclusion – not worth it (I also have health issues). Being mortgage free is the greatest freedom you can have – we can save and invest nearly everything we make now.

  5. Hello! Also a disabled person who was forced to quit work 5 years ago due to disability (motor neuron disease) at 42 when my children were 10 and 8 – and we had JUST bought a house the month before. An absolute nightmare!

    I worked for the federal government and so I thankfully had private disability insurance as well. If your benefits are similar to mine you are probably still on Short Term Disability (STD) and you are in the process of transitioning to Long Term Disability (LTD) and the disability pension payout. This is such a worrisome period of your life as you are adapting to life as a disabled person! I know exactly what you are going through and I am so sorry. You are right in the thick of it as you transition your life. I promise you that you will get through it. But first there is paperwork. SO MUCH PAPERWORK.

    I would like to add a few things here:

    1 – For people without a pension/private disability who are forced onto provincial benefits where one cancels the other out in terms of money they receive monthly, they should STILL apply for CPP-D. The reason why is that CPP-D “stops the clock” on the years you need to work to get CPP at retirement.

    For example, if you work full time for 20 years out of the 40 years that Service Canada uses to calculate retirement benefits and then go on CPP-D, Service will *only* use those 20 years to calculate your monthly pension at 65, resulting in a higher amount. If you work 20 years and don’t apply for CPP-D, Service uses the full 40 year to calculate your pension. It dilutes the calculation because it doesn’t look like you worked for the other 20 years. You will get more money at 65 if you have CPP-D.

    2 – RDSP: only contribute the amount you need to get the government matching! Because that is 100% return on your money, which you cannot beat. I see that you mentioned taking it out at 65 – but the RDSP rules state, “Withdrawals from the RDSP must begin by December 31 of the year in which the beneficiary turns 60.” Also, this payment is called an LDAP and it is used to provide a steady income for 20 years. You can read more here. This can cause a headache if you have other income (ie: pensions) coming in potentially shooting you up into a higher tax bracket. You may want to do the math on how it will affect you and consider something such as the DAP aka a lump payment, for example, before your husband retires.

    For other people who are reading this who may have very little income and who don’t think the RDSP would be worthwhile – please apply! The government will give you up to $1000 a year even if you DO NOT contribute a penny!

    Lastly (and unrelated to the OP, just for general info), the RDSP is a bit of a weird tax shelter and not many institutions have them. This has lead to a lot of companies getting into the game and offering to help people with the “confusing” RDSP applications. Do not go for this! These are shifty companies who are trying to sell you high fee mutual funds in their plans. They are absolute grifters preying on people. Just head to an online brokerage, like the OP did.

    3 – I ended up having to pay back the portion of the pension/benefits that work was paying while I was on STD. You may want to consider that if you transition from STD to LTD (again, I am making the assumption that your benefits are similar to mine but if they aren’t, disregard!).

    4 – I can’t recommend becoming a landlord, especially since I see that both you and your husband have RDSPs, which means you probably both have health challenges. I own a condo downtown that I was renting and that I am now selling. Even a low-maintenance condo is an absolute headache when you only have one able bodied person in the family who also has to work full time and do a lot of house and kid stuff. We have been trying to get it on the market for 2 months now but life gets in the way. My husband has been doing most of the work because hiring contractors has been a nightmare post-pandemic and the rise in demand has shot their prices through the roof and they have zero availability.

    5 – Travel: do it now, do it often! I always say to people: today is the best day I will have as a disabled person. Because my condition is degenerative, I am doing as much as I can while I can.

    We have traveled a lot but keep in mind that your needs change with your disability. One of the things able-bodied people in personal finance communities rarely consider is how much mobility or energy disabled people don’t have. I can’t stay at some cheap rental because it is up 5 flights of stairs or it doesn’t have an accessible shower. Clearly, YMMV with your disability but some places of the world just become too complicated to manage as a disabled person without paying through the nose.

    We ended up paying off our mortgage this summer and my husband plans to retire this year, at 51. It’s going to feel so good to get that done and to get your debt gone.

    I wish you the best of luck!

    1. This was extremely helpful, I realized I never messaged to say thank you 🙂 I appreciate the info and time you too to respond.

  6. I would like to offer you a different perspective on your health and indirectly, your finances. Would you please ask yourself, are you a perfectionist? Do you worry a lot, and hope it all turns out well? Do you help and take care of others, often to the sacrifice of your own needs? Would others describe you as a very nice, gentle, and good person?

    I have come to know that most of the non-traumatic conditions managed by the medical industry have their primary cause in the emotions; the physiological stresses generated by unconscious emotional repression, conflict within the mind. These include most types of pain that persist for more than a few weeks (with or without an ascribed anatomical basis), autonomic dysfunctions, hormone-related problems, probably most autoimmune conditions, many types of cancers, and on and on. I am NOT saying that your particular conditions are “all in your head” – far from it – undoubtedly you have objective laboratory, radiological, and/or other clinical findings that establish your diagnosis in conventional terms. Otherwise, the greedy insurance company would not pay anything.

    I suggest two books to read ASAP: The Mindbody Prescription by John E. Sarno, M.D., and When the Body Says No, by Gabor Mate, M.D.

    One technical term for the study of how the state of one’s mind is usually the primary determinant of health or disease, is psychoneuroimmunoendocrinology. These are real processes, real facts of life, that the mind directly affects the body to produce what we call health or disease. It is probable that factors like genetics, diet, sedentary lifestyle, and low-level exposures to environmental chemicals, contribute relatively little to the fundamental cause of most disease.

    I’m just a random internet person with some ideas, and nothing here constitutes medical advice. However, I am an MD myself who trained and practiced in one of the hardest of hard sciences in medicine. I would never have believed any of this myself, except that I too suffered from disabling painful conditions from which I was able to heal through acquiring knowledge, thinking, and verifying the concepts through my own experiences and reflecting on 11 years of experience with patients in clinical practice.

    It costs almost nothing to read a few books. Reading, learning, and thinking have no side effects!

  7. As someone with 3 rental properties: Don’t do it. You’ll thank me later. They are never as simple or profitable as they appear. Headaches on headaches on headaches.

  8. My Ex and I are back together ………………Awwww, *tear* thank you, [fixmybrokenmarriage @ gmail com].. . says:

    So pleased..

  9. Interesting. The reader’s case is excellent at typing, planning and even planning 2 months of travel a year! Working at home with a keyboard would be a great job. Not sure how someone with these skills can be considered fully disabled? The Government and privated industry has lots of jobs using the keyboard at home.

  10. Conveniently disabled enough not to work and collect benefits but not disabled when it comes to planning vacations and financial independence and considering a labour intensive rental property. Hmm. Ok.

    I think this person is taking advantage of the system.

    1. Even if it helps to remove stress, such things should only be prescribed by doctor, especially considering OP was having some neuralogical issues. Wouldn’t just blindly hop into anything like this out of blue…

  11. I used to play sports often and almost never missed a workout. But later many other things appeared and gradually I began to abandon sports. Until there were back problems due to a sedentary lifestyle. Then my therapist told me that I needed more physical activity during the day.

  12. Health is the only thing we have and one should follow all the recommendations. I also like to lead a healthy lifestyle and recently I have started using products and buying CBD products in these cbd stores which are the perfect solution to feel better and relax. I think you can also compare all the information about these products to make the right decision.

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