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