Financial therapy for a tough diagnosis

Christina Rodriguez had everything going for her - until she was diagnosed with MS. Now she's learning how quickly the best-laid financial plans can unravel.

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By Paul Keegan, Money Magazine contributing writer

If it happens to you
These steps can help prevent a medical crisis from spiraling into a financial one.More
Christina's bottom line
Coming in
Christinas salary $93,000
Steves salary 67,000
Total: $160,000

Going out
Income taxes $39,316
Retirement savings 23,430
Mortgage 23,160
Catalogue shopping 18,000
Food 7,680
Sports, entertainment 7,452
Property taxes, home maintenance 7,124
Contributions, gifts 6,900
Vacations 6,480
Insurance (life, home, car) 5,359
Car expenses (gas, oil, repair) 4,500
Utilities 3,900
Hobbies, miscellaneous 3,795
Clothing, personal care 2,400
Medical 504
Total: $160,000

House $510,000
Retirement savings 424,210
Checking, savings, CDs 89,962
Cars 50,500
Cash-value life insurance 4,395
Total: $1,079,067

Mortgage $255,023
Total: $255,023

Net worth: $824,044

(Money Magazine) -- Two summers ago, Christina Rodriguez was on top of the world. At age 37 she had a successful career as a district manager with Verizon Wireless and her relationship with boyfriend Steve Schulz was turning serious: He'd just moved into her four-bedroom house at the foot of the majestic San Bernardino Mountains in Highland, Calif.

Money was not a problem. Christina's six-figure income, along with Steve's job as an elementary school teacher, gave the couple combined earnings of nearly $250,000; they owned their cars outright and had no debt beyond their mortgage.

Christina was regularly saving 10 percent of her income for retirement yet still had enough money left over to indulge in extras like top-of-the-line athletic gear, expensive vacations and endless gifts for her beloved niece and nephews. "We could buy what we wanted when we wanted it," she says. "We thought we had it made."

But during the couple's regular morning runs with friends, Christina began feeling a vague numbness steadily creeping into the left side of her body. She'd been bothered by persistent fatigue for months, but this was something different - frightening enough for her to finally give in to Steve's pleas to see a doctor. After a series of tests, including a spinal tap and a brain MRI, her doctors delivered a devastating diagnosis: Christina had multiple sclerosis.

The doctors explained the disease - in essence her body's immune system was in revolt and attacking her brain and spinal cord - and said she would likely have it for the rest of her life. Her symptoms could range from mild fatigue and occasional numbness to substantial vision loss and a deterioration of motor skills that might leave her bedridden. And there was no way to predict the course that the illness would eventually take.

In an instant Christina's carefully planned life was upended. MS would not be merely a health challenge. Any serious illness - in fact, any devastating personal development, from divorce to the sudden death of a spouse - can trigger a financial crisis as well as physical and emotional ones. The problem isn't only the cost of treating the disease but also its effect on earning power. When patients are no longer able to perform their jobs, they risk losing their income and health benefits at the moment they need them most.

Christina was consumed with fear that such a fate would befall her. Where would she go? How would she survive? Eighteen months after her diagnosis, Christina, now 39, and Steve, 40, are still struggling with those questions.

Although she has tried to carry on life as usual, her MS has already forced painful changes: Christina has had to switch to a less physically taxing job at Verizon Wireless that brings in just over half as much money as her old position. And she wonders if she might be better off changing to a less demanding career altogether and maybe moving to a cooler climate (the Southern California heat exacerbates her condition).

"We obviously have to do something," says Christina. "I just can't handle the financial stress of not knowing what's going to happen to me."

Christina has always worried about going broke.

Her mother was a migrant worker from Mexico who raised four children alone (she got a divorce from Christina's dad when the little girl was just four). Isabel Rodriguez always seemed to be working, from fast-food joints to convenience stores. "I remember the stress of my mother not answering the phone because bill collectors were calling," Christina says. "I never wanted that to happen to me."

Christina put herself through Notre Dame with student loans and odd jobs, graduating in 1990 with a degree in political science. She went to work as a furniture buyer for a Los Angeles department store, switching companies a couple of times over the next few years as she moved up the ranks of merchandising management.

Her career success, though, was a sharp contrast to the pain in her personal life as she watched her mother suffer through a five-year battle with colon cancer. When her mom finally succumbed in 1995 at age 50, Christina was devastated, living under a cloud of grief for nearly two years. Finally she realized, "My mom would have spanked me and told me to get back to it."

By that time she had landed a job as district manager at a communications company that later became part of Verizon Wireless. As the cell-phone industry took off, Christina reaped the rewards with generous raises, commissions and bonuses.

In 1998 she bought her first house, a $150,000 four-bedroom home in a new development in Highland. Six years later Christina sold that property for a healthy profit and traded up to her current $379,000 single-story tract house located in a new development next to her old neighborhood.

In those days Christina was married to her job. Working 70-hour weeks left little time for dating, and she fussed over her young sales teams as if they were her own children. But by January 2005, when Steve introduced himself after an exercise class at the YMCA, she'd begun to realize there was more to life than work.

They saw each other regularly at the gym, but it took Steve, who was divorced, a few weeks to summon the courage to ask her out. "She was a strong, independent woman, and I liked that," he says. Christina enjoyed the irony that Steve was fluent in Spanish while she barely speaks a word (her mom insisted on English at home). As she got to know him better, she became smitten too.

Finally, Christina had someone to enjoy her money with. They took trips to New York City and Sedona, and she splurged on a new $41,000 Lexus, paying cash. Steve didn't have many material needs beyond supporting his workout habits (mostly bicycles and riding gear), but Christina had become a catalogue-shopping junkie, spending $1,500 a month on running gear ($40 shirts and four pairs of new sneakers at a time) and video games for her niece and nephews.

After surviving such an impoverished childhood, she says, "I took a real joy in getting bills in the mail because I got to pay them off."

In retrospect Christina had met Steve just in time.

She'd convinced herself that her persistent fatigue was the result of 12-hour workdays and an ambitious workout regimen. But once the numbness set in, both she and Steve worried that it was something more. When she was finally diagnosed with MS, Steve was enraged ("Why us?" he kept thinking) while Christina turned inward, flooded by memories of her mother's early death. "I couldn't talk to anybody about it for a while," she says.

Every aspect of Christina's life seemed under attack - her health, job, financial security, even her new relationship. After all, she'd dated Steve for less than a year. She sat him down and said fighting this disease would be an ordeal and nobody would blame him if he left now. Three times she told him he was free to leave. Finally, he looked her in the eye and said, "Don't ever say that to me again."

Though MS is incurable, her doctors told Christina that regular administration of a drug called Betaseron would greatly increase the odds that she'd be able to lead a healthy, active life. So every other day Steve mixes the powdered drug with saline, pours it into a syringe and drops the syringe into a plastic "gun" that conceals the needle. Then he places the device gently on one of eight locations on her body and pulls the trigger.

So far Christina's most common symptom is exhaustion. Then once a month or so she will have what she calls "an episode," involving anything from a stiff neck to paralysis in her arm or leg that lasts a few hours or even days before she returns to normal. Worst of all is the uncertainty, knowing that at any moment the disease could progress to the point where she recovers only partially - or not at all.

At first Christina tried to keep up with her job managing 140 Verizon Wireless employees in her district, constantly visiting stores and fielding more than 100 text messages a day. But one sweltering afternoon in July 2006, she realized that her old lifestyle wouldn't work anymore. She was overseeing the installation of a kiosk at a Home Depot store that had no air conditioning. Suddenly she lost feeling in her left hand, causing her to drop her notebook.

She politely excused herself and left the store, her shirt drenched with sweat as the numbness began creeping up her left arm. She stumbled to her car, blasted the AC and drove home, hoping the numbness would not reach her legs. Fortunately, she was able to walk into her house, where she collapsed on the couch and promptly fell asleep.

The day Christina dreaded came last November.

That's when Verizon Wireless reorganized her district, which meant she'd have to drive 75 minutes several times a week to visit the new stores under her management. She knew she wasn't up to the physical demands, and would have to admit as much to her boss.

But she wasn't emotionally or financially ready to quit. Her career at Verizon Wireless had given her not only a lifestyle she had dreamed about as a child but also a benefits package that she had become heavily dependent upon since the diagnosis: Her health insurance plan picks up the entire $19,000 annual cost of her drug regimen without even a co-payment.

And if an MS episode leaves her unable to work for a while, Verizon's short-term disability policy will cover 100 percent of her salary for 26 weeks. If she still can't work at that point, long-term disability will kick in, covering 60 percent of her salary, tax-free, to age 65.

As it turned out, Christina's bosses weren't ready to let her go either. Instead they created a new job for her, developing training programs for store managers, which sharply reduces the time she spends traveling from store to store. The one drawback: Her new salary of $93,000 is just over half what she earned last year.

Despite the pay cut, Christina is thrilled with the solution. But she is coming to realize that the new job may not be the answer over the long term. The Southern California heat makes daily life exhausting, and eventually she may have to move to a cooler location such as Northern California or Oregon to prevent the MS from getting worse. And she couldn't do her current job from a different location.

So Christina is starting to think seriously about switching careers. A lifelong reader, she would love to become a librarian. But first she'd have to earn a graduate degree in library science, and she would likely have to support herself with lower-level library jobs paying about $10 an hour to help cover the bills while going back to school. Perhaps the biggest stumbling block: Those jobs wouldn't provide the comprehensive health benefits she now enjoys through Verizon.

The uncertainty about which path to take and the unpredictability of a life haunted by MS weigh heavily on Christina. "I sometimes feel overwhelmed," she says. "We need someone to point us in the right direction. We need to start planning more effectively."

The advice

To help Christina and Steve sort out their options, Money Magazine consulted financial planner Robert Pagliarini, author of The Six-Day Financial Makeover (St. Martin's Press, $24.95). His recommendations:

Stick with your day job - for now. Pagliarini urges Christina to stay with Verizon for as long as possible to take advantage of its generous salary and benefits package. Beyond its health and disability plans, the company matches 100 percent of Christina's 401(k) contributions up to 6 percent of her salary - her account is currently worth around $260,000.

With Steve's California State retirement plan, as well as other investments, Pagliarini estimates the couple are on track to amass a nest egg of $2.8 million by age 65 if Christina stays with Verizon. And that's not even counting their house, valued at just over $500,000.

The longer Christina stays with the company, the more money she will be able to save outside her retirement plan as well. And having a big cash cushion is the couple's key to coping with the changes they may face (such as new careers, a move up north or higher medical bills). "If she leaves her job now, she will be really exposing herself," says Pagliarini. "Since she enjoys her work, she should stay as long as she is physically and emotionally able to do it."

Slash expenses. Realistically, though, Christina's health problems may force her to leave Verizon sooner rather than later. If that happens and the couple haven't changed their spending habits, Pagliarini worries that they'll quickly find their expenses exceeding their income. "Their spending right now is kind of out of control," he notes, although it hasn't been a problem at Christina's current salary.

The planner offers a laundry list of possible cutbacks: Chop the $6,500 annual vacation budget in half. Eliminate Christina's $1,500-a-month catalogue-shopping habit. And sharply curtail their $4,000 annual donation to MS groups. Total savings: about $25,000 a year.

An easy way to save $20,000 more: Sell Christina's 1999 Honda Accord (mileage: 200,000) and Steve's 2001 Nissan Sentra (110,000), along with the Lexus. Then use the proceeds of about $50,000 to buy two reasonably priced used cars with lower mileage for about $15,000 each.

The austerity drive would get the couple in the habit of living on a reduced income of $60,000 a year - about what they can expect if Christina takes her part-time library job ($10,000) and Steve takes a pay cut in a new school district ($50,000). And Pagliarini estimates they would still be able to save an additional $100,000 over three years.

If they invest that money in a mix of stocks and bonds, he believes they could earn about 8 percent a year, adding $500,000 to their retirement accounts by age 65. Combined with their other savings and Social Security, this would produce about $100,000 a year in income when they retire.

Hang on to the life insurance. If Christina quits her Verizon job, she'll have a hard time finding new affordable life insurance because of her illness. But she will be able to take her existing company policy with her, up to $1 million. If her condition worsens considerably and she needs expensive long-term care, she can sell the policy to pay her medical bills. She might get $500,000 or more for her $1 million policy, estimates Pagliarini. And she can leave to Steve or MS groups whatever money she doesn't spend.

Christina thought she was pretty good at managing money until she met with Pagliarini. When he ran the numbers and showed her just how much she was spending, she says, "I was shocked." But she is relieved to know there are steps that she and Steve can take to protect themselves against the financial fallout of her MS and promising options for the future.

For now she plans to devote herself to her new job at Verizon Wireless, start volunteering at a local library, cut back on her catalogue-shopping habit and take some vacation trips up north with Steve to scout for places where they might like to live and work. Selling the Lexus? "I don't know about that one," she says.

And anytime she gets discouraged, Christina thinks about how lucky she was to meet Steve, who woke her up one morning earlier this year by pretending to spill a cup of coffee on her lap. Out tumbled a diamond-and-sapphire ring. They will be married in November. She also remembers the resilience and courage her mother always showed in facing adversity.

"Every time I think my life is getting harder, I realize that I still don't have to struggle the way my mother did," she says. "And how incredibly lucky we are to have what we have." To top of page

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