Getting It Right The Second Time Around

Early retirement proved costly for Shirley Malone

college education, even if she has to use a portion of the adoption assistance check she receives. Smith recommends small-cap value mutual fund holdings for the account.

Open a Roth IRA. Smith recommends that Malone invest her $2,000 in contest winnings in a Roth IRA and do more to offset her tax liability. He suggests putting the money in the Meridian Growth fund (MERDX).

Acquire more insurance. As the household breadwinner, all the pressure is on Malone. She has disability insurance (her salary’s worth) and more than $400,000 worth of life insurance coverage, but Smith says Malone needs twice that amount and recommends that she pick up as much inexpensive group life insurance as possible. And Malone should at least research long-term care insurance, which covers the expense of nursing homes and other types of elder care.

Financial Snapshot: Shirley Malone

HOUSEHOLD INCOME

Gross Income $55,000
Adoption Assistance 6,552
Total $61,552

ASSETS

Checking Account $2,000
Savings Account 15,000
Brokerage Account 312,140
Prudential IRA 1,800
Coverdale Education IRA 3,000
Savings Bond 6,000
Market Value of Home 500,000
Value of Three Cars* 11,000
Total $850,940

LIABILITIES

Mortgage $192,000
Credit cards 15,000
Personal Loan 5,000
Total $212,000
NET WORTH $638,940

*According to Kelley Blue Book

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