Princeton's Ask The Doctor November-December 2018

F I N A N C I A L H E A LT H

The Top 5 Threats to Your Financial Life By Bryan M. Kuderna

“An ounce of prevention is worth a pound of cure.”- Ben Franklin Turn on the news tonight; you’ll surely be entertained by a host of extremely ordinary catastrophes… robbery, murder, celebrity scandal, 5-alarm fire, and a natural disaster. While the media enjoys plaguing us with negativity and fear, it’s human nature for us to see the positive in the world, especially our own world. When it comes to personal finance, most people have it figured out, or so they think. So, why spend an extra second of our valuable time thinking about what could go wrong? It is possible one could sail through life without considering protection, and perhaps succeed in the land of make believe. However, it doesn’t matter, until it matters, and then it’s all that matters. This line perfectly summarizes preparation or a lack thereof. As a Certified Financial Planner™, I challenge you to spend just a brief, but regular, moment reviewing your state of readiness. Based on thousands of man-hours interviewing clients, here are the top 5 threats to your financial life and corresponding solutions… 1. Sick or Hurt- While “it will never happen to me”, it will happen to someone. Over 25% of today’s 20-year- olds will become disabled before they retire. Despite common belief, injuries account for a small fraction of disabilities, whereas musculoskeletal disorders are the most common type of claim (i.e. back pain, arthritis, etc.) followed by cancer. The average disability then lasts for over 3 years. Combine these stats with the fact that less than half of Americans have enough liquidity to cover 3 months expenses and you have a real threat. The most efficient solution is a combination of Group and Individual Disability Insurance, favorably with a True-Own Occupation definition and portability. Continued on page 43..

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ASK THE DOCTOR

NOVEMBER/DECEMBER 2018