RSD is a little-understood nerve disorder that can cause severe, incessant
pain. Therapy got Sherburne, who lives
in Mansfield, Ohio, back to working
part-time, but in 2007 she fell again,
breaking the leg she had injured before.
RSD returned with a vengeance.
MUST DO #4 Cover your assets “I just
never thought anything would happen
to me,” Sherburne, now 49, laments. “I
have that complex that nurses have. We
figure we’re here to take care of every-
body else. We can’t get sick.”
That mindset isn’t unique to nurses,
says Peg Downey, “but people need to
realize that their most important asset
is their earning power. You can’t pro-
tect that with anything but insurance.”
In AARP Financial’s survey, 84 per-
cent of folks under 60 have life insur-
ance, but only about two-thirds have
disability coverage. That’s a risk. Major
illness or disability ranked second only
to job loss as a financial hardship.
Although many employers offer disability insurance as a benefit, it’s good
to examine the exact terms before
deciding you’re adequately insured.
A policy’s value hinges on, among
other factors, the portion of income
it replaces (anywhere from 30 to 70
percent), any waiting period or dollar
cap, and how disability is defined. For
individuals the cost can be a daunting
2 to 3 percent of income. That makes
comparison shopping a must.
Sherburne is now seeking disability benefits from the Social Security
Administration, which covers those
totally unable to work. Her initial claim
and first appeal were rejected, which
is common, and while she believes she
will eventually succeed, in the meantime she’s barely scraping by.
Divorce
JEFF CONDON never saw it coming.
The 47-year-old attorney from Santa
Monica, California, knew his marriage
had strains, but he thought the tension
was normal—the type that all couples
have—until one day his wife said she’d
had enough. Since then the two have
battled over the family home, their
To quickly double-check your crisis readiness, financial
adviser Spencer Sherman offers these commonsense
questions, and a little coaching
Are you saving
for your future?
“Grandma and Grandpa didn’t
have credit cards,” says Sherman.
“When they wanted something,
they planned, saved, and paid
cash. They couldn’t run up debt.
Generally, you’ll know you have
saved enough to live on throughout your retirement years when
you can limit withdrawals for expenses to 3 percent to 5 percent
of your nest egg per year.”
Do you have
enough insurance?
“Knowing you’re well protected
is calming, which takes the
stress out of other financial
decisions. If your investments
have lost value, it may make
sense to get more life, long-term
care, or disability insurance.”
Are your assets really
spread around?
“Diversifying means more than having a spectrum of stock and bond
investments—it’s about spreading
all risks. That’s why you don’t want
all your money in home equity, or
your salary and your investment
earnings coming from one source,
as when people hold their company’s stock in their 401(k).”
What financial
advice would
you give a friend in your
exact circumstance?
“With a friend, you try to be
objective, free from the emotions
that money triggers, so you can
help your friend avoid impulsive
decisions. Now put yourself in
the place of that friend, and give
yourself similarly objective advice.”
