Adam Tau describes what you can do to plan for unexpected finances.

1. PLANNING FOR
UNEXPECTED FINANCES
Securities offered through North Ridge Securities Corp. | Members, FINRA/SIPC/MSRB | 1895 Walt Whitman Road
Melville, NY 11747 | 631.420.4242.
Adam Tau

2. UNEXPECTED FINANCES
Previously, we discussed building up an emergency fund for unexpected expenses
such as rent hikes, car repairs, medical bills, or as a buffer in a job transition. But what
happens when the amount of money you are at risk to lose is much larger than the
recommended six-month’s expenses as a cushion?

3. Market Volatility
Death
Injury or Illness
Legal issues
Outliving Money in Retirement
Need for long-term care services
For example, substantial financial duress can be caused by:
Although these potential risks seem daunting, with a proper strategy in place, you can
feel reassured when things go awry.

4. MARKET UNCERTAINTY
Diversify, and consider your timeline when you’ll actually use the money. For
example, if you invested funds for your child’s college tuition, consider the age of your
child. Is the child 1-year-old or 17-years-old? The closer you are to using the funds,
the less risk you should consider taking. In addition, consider working with a
professional money manager. He or she will help you to make decisions rationally,
rather than emotionally, keeping you on track towards your personal goals.

5. DEATH
Life insurance replaces lost household income when one dies. It is not something
people like to talk about, but, consider what would happen if your
spouse/partner/parent suddenly passed away. Most think of life insurance as a gift
to help to cover immediate costs such and funeral expenses. It can also help cover
outstanding debt, such as mortgages, medical payments, car payments, and other
loans. Accompanied by the sudden death of a person, is the sudden loss of income.
Life insurance allows a family to continue to the lifestyle they’ve grown accustomed
to and allows for some peace of mind in an emotionally challenging time.

6. INJURY OR ILLNESS
Disability income insurance (DI) is similar to life insurance but the benefits begin upon
an injury or illness. Unlike Workers Compensation, to receive DI benefits, the injury
may not need to be workplace-related. DI insurance is often designed to replace 45 to
65% of your gross income on a tax-free basis in case your injury or illness prevents
you from working — which prevents you from receiving your usual paycheck. When
your medical bills start to add up on top of your regular expenses, DI can be a true
game changer

7. GETTING SUED
If you or your business is sued, liability insurance can come in handy during your time
of need. Liability insurance is able to cover libel, slander, copyright, third-party
property damage, product liability, and third-party bodily injury. Often liability
insurance can help pay for legal expenses, including attorney’s fees and settlements.

8. OUTLIVING MONEY
An annuity can be a strong piece of an overall retirement portfolio. An annuity is
similar to social security or a pension. An insurance carrier will guarantee a set amount
of monthly income for as long as you live. This, coupled with social security and other
retirement assets, may allow retirees to enjoy their golden years without worrying that
they will run out of income.

9. LONG-TERM CARE
As people enter their senior years or encounter life-altering illness such as Alzheimer’s,
they may require long-term care to help with daily activities. However, long-term care is
often expensive and not covered by health insurance, Medicare, or Medicaid. For
example, in the New York City area, long-term care can cost an outstanding $20,000 a
month, which is way out of most people’s budgets. To help ease the costly burden, long-
term care insurance can offer financial relief. Long-term care insurance is a type of health
insurance that will help cover long-term care expenses. Without it, the burden typically
falls on the children to care for the ill family member — which is not only expensive but in
some cases, forces them to leave work for care for a family full time.

10. FOR MORE FINANCIAL ADVISING TIPS, PLEASE VISIT
ADAMTAU.COM
Securities offered through North Ridge Securities Corp. | Members, FINRA/SIPC/MSRB | 1895 Walt Whitman Road
Melville, NY 11747 | 631.420.4242.