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Financial Literacy - Securing retirement Click Here
Assessing risk exposure
Hope for the best, plan for the worst: Health and disability insurance can help Alice mitigate financial loss.
Securing retirement
  Money makeover: The problem
The problem: Worried about health issues
Alice G.
Profile: Alice G.
The problem:
Alice has health care concerns that she wishes to address from a financial planning standpoint.
The plan:
Proper insurance planning and understanding of health care solutions will help provide near-term and long-term solutions to her planning.

Currently, Alice is working and gainfully employed with health benefits. As long as she can work full time and maintain coverage with company group health insurance, her exposure to financial loss is mitigated and manageable. However, she must plan for the possibility that her health may force her to stop working entirely.

She also needs to protect her ability to earn a paycheck until she reaches her target retirement date so that she can be self-sufficient financially.

As an employee, Alice has short- and long-term disability coverage. It is important that she continue that coverage in case her medical situation worsens, rendering her unable to work.

Alice's parents may present her with an obstacle that more and more of her generation will face: the cost and burden of caring not only for themselves, but their parents. She should research her options in case her parents become dependent on her.

While Alice has a considerable amount of money saved in retirement funds as well as taxable accounts, she doesn't own real property. "I sold a town house at a loss two years ago when I was forced to relocate because of work," she says. "Because of that, I am very gun-shy of buying a house, town house or condo."

This is an area that may require rethinking, since more often than not, an investment in real estate can be an important contribution to net worth.

Our plan for Alice  

Key issues
Maintaining health coverage until age 65.
Saving aggressively in case of early retirement.
Looking at investment mix with a long-term horizon.
Taking steps to ensure her parents' needs are addressed.
Considering the purchase of a home.
Jump these money hurdles »

This report was prepared by Bryan Beatty, a Certified Financial Planner with Egan, Berger & Weiner of Vienna, Va.
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