Q: I suffer from two chronic illnesses that interfere with my ability to work full-time. I'm 31 and could be completely disabled long before I reach retirement age. I earn $60,000 annually as a technical writer for a consulting firm. For most of the past year, I've been out on medical leave and haven't been contributing to my 401(k). My husband makes a good living, but if I become unable to work, that would put a serious crimp in our ability to save. Fortunately, I have a good healthcare plan and disability insurance. How do I prepare for a healthy financial future?

A: I'm so sorry to hear about your illnesses, but I have to tell you how impressed I am with your emotional strength. So many people in your situation choose to panic rather than plan.

I'm relieved that you have disability insurance, and I hope you've got "own occupation" coverage. That means your plan would offer payouts if you're no longer able to work in your stated field. This is preferable to "any occupation" coverage, which will pay only if you're unable to perform any job for which you're considered reasonably qualified.

Just so you know, if you do become permanently disabled, you should be able to qualify for disability benefits through Social Security. Anyone who has paid Social Security taxes and earned the required number of work credits is eligible. Based on your age and salary, you could receive monthly payments of about $1,700 (learn more at www.ssa.gov/dibplan). I realize that's less than half your current gross income, but it's still a decent chunk of change to help you get by.

Even if you aren't working right now, you can contribute to what's known as a spousal Roth IRA; in fact, the money can come out of your husband's earnings. If your joint income is less than $156,000 this year, you can put away up to $4,000. I also like the traditional IRA, but the Roth is pretty unbeatable, especially given your young age. The money you contribute each year to a Roth IRA can be withdrawn anytime without taxes or penalties. And assuming you follow a few basic rules, withdrawals in retirement will be completely tax-free.

I also want you and your husband to take a serious look at where you might be able to reduce spending. I'm talking about big-ticket savings, such as moving to a smaller home or a less expensive neighborhood so that you can lower your housing costs and boost your reserves.
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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