Rick Schultenover, CFS, CLTC

Q: Is my employer's group insurance for long-term disability adequate, and what should I look for in an income-protection plan? 

Your ability to earn an income is your No. 1 asset. It is important to protect as much of that asset as you possibly can, especially if you have dependents. Whether healthy or disabled, many people still have financial obligations such as student loans, mortgages, auto loans, etc. In the event of a disability, many cannot afford to lose any of their wages. In addition to the lost wages, there are also lost retirement contributions which could drastically set back your long-term goals. Often it makes sense to purchase a private supplemental policy.  

Q: My employer offers a matching contribution if I contribute to the 401k. How much should I be contributing to that account?

 It has been common practice for employers to offer matching contributions to retirement plans. Your goals should dictate how much you contribute, but at the very least, take advantage of any "free money" your employer is willing give you. 

A common matching contribution is $0.50 for every dollar the employee contributes, up to 6 percent of the salary. That is the equivalent of receiving a 3 percent raise each year you participate in the plan. Each employer is unique, so make sure to contribute at least enough to get the full match. The IRS contribution limit for 401k plans is $16,500 for 2009. Keep in mind that contributions to an employer retirement plan carry IRS restrictions. With few exceptions, this money is tied up until age 59 ½. Consider other financial needs in addition to retirement before contributing. 

Have a professional or personal financial question? Send it to Rick at 

The information in this article should not be construed as specific investment advice. Consult a reputable adviser for insight into your particular situation.

a financial adviser, associate vice president, and associate partner with North Star Resource Group, Minneapolis, North Star Consultants, Inc., Insurance Products and Services | *CRI Securities, LLC, Securities and Investments, Investment Advisory Services | *Securian Financial Services, Inc., Variable Products and Securities, Investment Advisory Services | North Star Resource Group offers securities and investment advisory services through CRI Securities, LLC and Securian Financial Services, Inc. CRI Securities is affiliated with Securian Financial Services. 128591 D.O.F.U. 1/10.

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Financial adviser Rick Schultenover discusses ways pharmacists can protect their financial futures.

Finance for pharmacists: Disability, income protection, and 401ks

Q:  What should I be looking for when searching for a reputable financial adviser to work with?  

Also, look for someone who is willing to specialize in you and knows the concerns of someone in your profession and income bracket. If you had a heart condition, you wouldn't seek the care of a general practitioner  -  you would look to a cardiologist, right? Finally, understand how the advisor gets paid.  

Q: At what point does it make sense to save versus pay down debt?

Generally speaking, follow an 8 percent interest rate rule. If the debt you are carrying has an after tax net cost of 8 percent or less, typically student loans and home mortgages, this can be "friendly debt" and you may be better off paying the minimum payments toward that debt and saving or investing the difference.   

If the interest rate on the debt is more than 8 percent or the debt is tied to a depreciating asset, such as an automobile, it is generally advisable to pay down that debt more aggressively. With friendlier debts, you can effectively pay down the balance as well as address important issues like building an emergency fund and/or start retirement savings.   

Try to work toward and maintain a liquid emergency fund of 3 to 6 months of living expenses. This will allow you to "survive" for an extended period of time in the event of illness or injury or even a job loss.  Also, having friendlier debts affords you the cash flow to take advantage of any free money offered by employer-sponsored retirement plans, giving you a head start on your longer term goals. The sooner you start, the better your chances of achieving your goals.   

One of the benefits of finding an advisor to help you is that he or she can point out some of these options  -  options that can give you better control of your finances. Take time and find someone who specializes in you. (84560 D.O.F.U. 8/09) 

Have a professional or personal  financial question? Send it to Rick at 

 is a financial adviser associate vice president and associate partner with North Star Resource Group, Minneapolis. He can be reached at (612) 617-6030, or e-mail: 

 The information in this article should not be construed as specific investment advice. Consult a reputable adviser for insight into your particular situation.

Financial planning for pharmacists requires a basic understanding of types of financial professionals, fee structures, and values.