Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Get protection from financial struggle

lisa_jucha.top.jpgLisa Jucha, Southern California By Kate Ashford


(Money Magazine) -- Lisa Jucha makes a comfortable living. But while she was growing up, money was scarce -- she describes her childhood as "financially difficult." She doesn't want to struggle like that again.

Lately, Jucha, who is 45 and single, has begun to worry about what would happen if an accident or illness prevented her from working. She's especially afraid of losing her home.

" I can't let a disability compromise what I worked and dreamed for," she says.

As a sign-language interpreter for the federal government, Jucha earns $68,000 a year; she brings in another $15,000 or so on the side working as a video-relay interpreter -- helping deaf people talk to hearing people via videophone.

She does get some disability insurance through work. But the coverage leaves her vulnerable, says L.A. financial planner Jennifer Hartman. Especially since Jucha relies on income from a side job -- which she can't get insurance for --she needs more coverage on her primary job.

The solution
Goals
Make sure she'll have income if she becomes sick or disabled.
Assets
$175,000 in retirement accounts
$2,000 in brokerage accounts
$83,000 in cash

1. Set a target. Uncle Sam offers employees a free benefit that kicks in for disabilities expected to last a year or more. It'll pay 60% of her salary for 12 months, 40% thereafter (minus some of her Social Security disability benefits). Hartman says Jucha should aim to replace at least 70% of her after-tax income for short- and long-term disabilities; coverage maxes out around 90%.

2. Join a group. The government doesn't sell supplemental policies, so Jucha should see if any industry associations she belongs to offer group plans, which often are cheaper than individual ones. If not, she should find an agent specializing in disability.

3. Get the right variety. She should get an "own occupation" policy, which pays out if she can't work in her field but could still work.

Do you need money help? Post your video on iReport and tell us why you deserve our next Money makeover.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%3.86%
15 yr fixed2.97%2.94%
5/1 ARM3.15%3.08%
30 yr refi3.96%3.97%
15 yr refi3.07%3.04%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,058.35 -469.68 -2.84%
Nasdaq 4,636.11 -140.40 -2.94%
S&P 500 1,913.85 -58.33 -2.96%
Treasuries 2.17 -0.03 -1.27%
Data as of 6:33pm ET
Company Price Change % Change
Bank of America Corp... 15.58 -0.76 -4.65%
Apple Inc 107.72 -5.04 -4.47%
General Electric Co 23.88 -0.94 -3.79%
Ford Motor Co 13.72 -0.15 -1.08%
Microsoft Corp 41.82 -1.70 -3.91%
Data as of 4:03pm ET

Sections

McDonald's has been testing an all-day breakfast menu in several markets for months. Now it has said when the change will go nationwide: October 6. More

Iran could be pumping more than four million barrels of oil a day by the end of 2016, the country's oil minister tells CNN in an exclusive interview. More

The Federal Aviation Administration approved the largest ever fleet of commercial drones owned by a company called Measure. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Here's what you need to earn to afford a home in the 27 biggest metro areas in the country, according to HSH.com. More