In the settlement industry we often talk about "Sudden Wealth Syndrome". What about "Sudden Retirement Syndrome", "Sudden Disability Syndrome", "Sudden Accident Syndrome" (you're a paraplegic and the at fault driver had only $100,000 of liability coverage that must be shared between you, his passenger, the lawyers and lien holders)? It could all happen at once.
Emily Brandon's article "Getting Ready For A Surprise Retirement" in the June 12, 2008 US News and World includes a haunting discussion of a study by the Urban Institute that "looked at people who were 51 to 61 years old in 1992. A decade later, over three-quarters of them had lost their jobs, become widowed or divorced, developed new health problems, or were confronted with frail parents or in-laws."
"A third of the participants had a health condition that limited their work, and 19 percent went through a layoff or business closing. And laid-off employees who managed to get a new job were less likely to get health insurance and earned about 25 percent less per hour."
Now throw in increasing gas and food prices and the looming increases in home heating oil.
The message in the article is that financial planning is essential, even for the unexpected. Among other questions:
- Are you living within your means?
- Could you live within 1/2 your income?
- Do you have a reserve fund?
- Are you saving money in a retirement plan or other tax favored savings plan?
- Do you have disability insurance?
- Do you have long term care insurance?
- Do your parents have long term care insurance? If they qualify medically. but don't because they can't afford it have you and your siblings chipped in to buy it?
- What form of life insurance do you own? What's your strategy for maintaining it if you become disabled or after you retire?
Tort victims confront many of the same issues as the aforementioned sudden retirees and many more, even at younger ages.Tort victims need to be especially careful and consult with settlement planners or recovery management specialists. Strategy for preservation of the recovery must be discussed. Many have no means to earn back their mistakes.
For questions about any of these items please call John Darer** toll-free at 888-325-8640
** Business solicited only where licensed. If you are from another state will attempt to refer you to other licensed practitioners.