How much does a loss of income for 3, 6, or 12 months really cost?

When we think of temporary income loss — due to an accident, illness, or time off work — we often tend to consider only the salary that is lost. But in reality, the financial consequences go far beyond the simple amount that no longer lands in the bank account every two weeks.

Let's take a moment to measure the real impact of a loss of income of 3, 6 or 12 months.

The real cost goes beyond the salary

When income stops, expenses don't stop. Rent or mortgage, car payments, groceries, electricity, insurance, daycare… everything continues to accumulate.

And if the period stretches, savings melt away faster than you think.

But there are also indirect costs that are often forgotten:

Late payments on debts (and interest that accrues)

Impact on your personal credit

Depletion of your emergency fund or retirement savings

Difficulty getting your finances back on track once you return to work

Emotional and family pressure related to financial instability

Concrete example : an income of $70,000 per year

Let's imagine a person who earns $70,000 per year, which is about $3,800 net per month.

Loss of 3 months: about $11,400 of net income lost

Loss of 6 months: about $22,800

Loss of 12 months: about $45,600

But if this person has to tap into their investments to compensate, the real cost is even higher.

Withdrawing $20,000 from an RRSP, for example, is also :

Tax on the withdrawal

Losing the future growth of that money (the long-term return snowball effect)

In other words, a loss of 6 months of income today can represent tens of thousands of dollars in long-term total impact.

And what if we add unforeseen expenses?

A loss of income is often accompanied by other costs:

Medications or treatments not covered

Home or vehicle modifications in the event of an accident

Transportation costs for medical care

Temporary support for children

These costs can easily push the bill up by several thousand dollars more.

Being prepared means protecting yourself

Fortunately, there are simple solutions to preserve your financial stability:

Disability insurance tailored to your situation (short- and long-term)

An emergency fund equivalent to 3 to 6 months of expenses

A good financial plan incorporating these possible scenarios

Protecting yourself against income loss isn't pessimism — it's being prudent. Because unforeseen events never warn.

In conclusion

A loss of income of 3, 6 or 12 months is not simply a missing amount on the paycheck.

It's a shockwave that affects your overall financial security, your plans, and sometimes even your emotional well-being.

It's better to prepare for it before it happens, by understanding what it really means for your situation.