Page 2: The advice

To assist the Castros in preparing for what lies ahead, Money Magazine arranged a meeting with Gary T. Ward, a certified financial planner in Brentwood, Tenn. and a veteran of the Special Forces. His suggestions:

The couple have put thinking about the future on hold until Ivan learns whether he can stay in the Army. But that wait-and-see approach could prove costly if he ends up being discharged, since it's likely to take him some time to find another job.

Start exploring other work options now, Ward advises - just in case. For instance, Ivan can get career advice through the Army's wounded warrior program and should start networking with other injured vets about career opportunities. And now that Ivan is much better, Ward also urges Evelyn to return to work as soon as possible to bring additional income into the household.

Many soldiers who receive a wounded warrior payout end up blowing the money. To their credit, the Castros haven't made that mistake; they put their $100,000 into a money-market account, recently paying around 3%, and haven't touched it.

But Ward urges the couple to make that money work harder. Given the financial uncertainty they face, he suggests they designate $50,000, or enough to cover six months of living expenses, as their emergency fund, putting the cash in a moneymarket fund and CDs maturing over two years; that should nab close to an extra percentage point in interest.

Ward advises splitting what's left between stock funds for growth and bond funds for income - a conservative mix that makes sense in case the Castros need to tap this money over the next decade to help pay for college for Ivan's son or meet other expenses.

There is a lot of change going on in benefits and programs for wounded soldiers, partly in response to public outcry over their treatment. It's tough to keep abreast of it all; the Castros, for example, didn't know that a law passed in January will provide Ivan with $26,000 in special compensation, on top of his veterans' benefits, if he's discharged before he qualifies for a pension. That extra money will make the transition to civilian life much easier.

For help making informed choices, the couple can turn to military service and veterans groups such as the Military Officers Association of America and the Blinded Veterans Association.

Even if Ivan does get his pension, Ward says the amount won't be nearly enough for a comfortable retirement. To build a bigger nest egg, he thinks, Ivan should reallocate his conservatively invested military retirement account, bumping the percentage in stocks up to 85% from 60%.

When Evelyn starts working again, she should also set aside 10% of her salary in her employer's plan. Longer term they may add to their retirement kitty by selling their rental property. But Ward says to hold off for now because of the slumping housing market.

By mid-March, much is still uncertain for the couple, but they have some good news. Evelyn has gotten a job as a speech pathologist at an Army hospital paying $67,000 a year and has already signed up for her new employer's retirement plan. Meanwhile, Ivan has had yet another operation, this one to replace an implant for his right cheekbone.

"I'm tired of going to the hospital, tired of blind rehab," he admits. "I just want to put all this behind me." Toward that end, he's set another ambitious goal: On April 21, Castro will run the Boston Marathon.

- Send feedback to George Mannes at gmannes@moneymail.com. 

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