Archive for March, 2010

Create Your Plan B, Part 1: Take Control of Your FutureThe uncertainty of the recent economy has left many people wondering how to get back on track toward their financial goals. Some feel paralyzed, afraid of making the wrong decision. But even if your path to the future looks very different than it did a few years ago, it is important to keep moving forward. How? Take control where you can to achieve the best possible outcome.

Plan for risk as well as reward

To take control of your finances and avoid being caught off guard in the future, you need a new, two-part game plan for the new economic reality. Your best next step is to create both a “Plan A,” for when life goes as you hope for, and a “Plan B” for when it doesn’t.

Plan A enables your dreams. It is based on what you want your future to look like, what that might cost, and how you can fund it. Making a plan is a positive step to move beyond the inertia of uncertainty. Even if your economic situation has changed, don’t give up on your dreams. Look at the new landscape with a sense of adventure and think creatively about how to achieve them. Sharing your dreams and aspirations with your Northwestern Mutual financial representative will help him/her develop the plan that will work best for you.

Creating a new Plan B, along with Plan A, prepares you for the risks that many people overlook. While some things are beyond your control, you can protect yourself where you possible and take action to minimize worry. Consider the various ways you could be financially vulnerable, including things you don’t hear about often, and address them now. Be sure to include the following:

Disability – Your ability to earn an income is your greatest asset because it provides for current living expenses as well as long-term savings. Disability income (DI) insurance is essential to your financial wellbeing because it provides income if you become disabled, making it possible to cover today’s expenses and tomorrow’s needs.

Health insurance – If this is provided by your employer, consider what you would do if coverage were no longer available. Total average health insurance costs have increased 131% in the past 10 years, from $5,791 in 1999 to $13,375 in 2009i. Take advantage of what you have by staying current on preventative tests and medical check-ups such as annual physical exams, mammograms and dental care. Set aside funds for emergency medical expenses should they arise.


Job security – Protect yourself from the worst-case employment scenario by being proactive while still employed. Improve your career skills, expand your network of contacts through tools such as LinkedIn, and look around at the options available if you were to become jobless. Save religiously for a rainy day and be sure your emergency fund can cover at least six months’ expenses in case unemployment hits your income streams.Long-term care – Plan for the risk of a long-term care event when you are healthy. Be sure you understand the costs of long-term-care in your area, how they could affect your family’s future financial security and your options for protecting yourself.

Premature death of yourself or spouseLife insurance. A breadwinner’s death can take a financial toll as well as an emotional one. A life insurance death benefit helps survivors meet living expenses and important goals such as post-high-school education and retirement. Permanent life insurance provides additional security by accumulating cash value that can be tapped for emergencies and future needs.

Serious injury or illness – An adverse health event can have physical, mental and financial consequences over the long-term. Recognize how an unexpected health issue could affect your life and take action now to prevent it with good daily habits of nutrition, exercise and lifestyle.

Stress – Financial uncertainty, work issues and family demands can be stressful, but stress does not need to overtake your life. Reevaluate to reduce unnecessary commitments, plan time for stress-releasing activities such as exercise and time with friends and family, and focus on the positive. Enjoy what you have and what is most important in life.

The key to any well-executed financial security plan is taking a prudent, disciplined approach to preserving and building your assets to meet long term goals. Taking action where you can, sooner rather than later, is in your best interest. With a plan that considers the various possibilities, you can let go of worry and know you have done all you can to be prepared for risk as well as reward.


iKaiser Family Foundation/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009

Article Courtesy of:  Rick Kalb-800:725:KALB; Visit My Web site:

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