Financial Steps to Take So You Can Focus on Your Health


According to a report by the American Cancer Society, more than 2 million new cancer cases are expected to be diagnosed in the United States in 2025. If you are among those receiving this life-altering news, you may feel overwhelmed and unsure where to turn. It can feel like countless issues compete for your immediate attention as you begin to face the physical, emotional, and financial challenges that often come with a cancer diagnosis. You may not know what to tackle first. While your health is the top priority, it is also important to prepare for medical bills, potential loss of income, and other unexpected expenses. Managing your savings and investments during this time might feel like just one more burden but taking a few practical steps early on can help you regain a sense of control and reduce stress in the future.

Prepare for Expenses

As you undergo cancer treatment, you will want to ensure that you have money available to cover your day-to-day expenses and to pay medical bills. You can work with your financial advisor to review the investments you have and determine the best way to manage all of your financial resources. Here are some things you may want to consider:

  • Review your investments and see if it might be beneficial to sell any of them. If you turn investments into cash, you will have this money available to use when you need it. This may include certificates of deposit (CDs), Treasury bonds, mutual funds, or common stock. As each type of investment that you have may come with its own rules and possible tax implications, it can be helpful to speak with your financial advisor about your specific situation so that you can make an informed decision about what might work best for you.
  • Reassess your emergency fund. Consider keeping six to twelve months of living expenses in a money market account at a bank or a money market mutual fund. These are typically lower risk investments that have the potential for higher yields than cash, while also providing you with the ability access to your money.  Cancer treatment and recovery has the potential to result in reduced income and increased expenses, especially if you or your partner are unable to work for a period of time. Having these funds available can help to provide a measure of stability.
  • Reassess your investing goals. Your cancer diagnosis requires you to put your focus on what is happening to you right now. It may be wise to take a more conservative approach to investing and choose lower-risk investments. While these will be less growth oriented, they will reduce your risk, which is important when you are facing uncertainty about your income and expenses.
  • Minimize withdrawal penalties. You may need to use some of your retirement fund savings to cover medical expenses, but withdrawing from retirement accounts before age 59 ½ typically incurs a 10% early withdrawal penalty. However, under certain circumstances, significant medical expenses may qualify for penalty exceptions. For instance, withdrawals for unreimbursed medical expenses exceeding 7.5% of adjusted gross income (AGI) are penalty-free.

In addition to taking steps to manage your savings and investments, it is also an important time to ensure that your estate plan is up to date. Make sure that your will, beneficiaries on your accounts, power of attorney, and healthcare proxy documents are current and reflect your wishes.  There is no way around the fact that if you are diagnosed with cancer, it can be an incredibly difficult time for you and your family.  However, with proactive management of your savings and investments, you can make the most of your financial resources while you focus on your health. If you would like more information, please contact us.