You Can’t Be Financially Secure Without These 10 Products

These are the cornerstones of a solid financial foundation that can weather the unexpected, carrying you and your family comfortably through life's ups and downs.

7. Disability insurance

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Not having disability insurance can trip up some otherwise money-savvy individuals.

Disability insurance provides money in the event you are unable to work for an extended period of time. The details may vary by insurer and policy, but most generally provide payments equal to 50 to 80 percent of your pre-disability earnings, according to legal site Nolo.

If you’re on the fence about whether to buy disability insurance, consider whether you have a big enough emergency fund to pay the bills if you are unable to work. Social Security disability benefits provide payments if you are unable to work due to a medical condition that is expected to last at least one year or result in death. But even if you’re approved, there is a five-month waiting period before benefits begin.

To learn more about disability insurance, see “How Will You Live if You Can’t Work? Disability Insurance 101.”

8. Life insurance

A woman and child visit a grave in a cemeteryTwin Design /

If you were to drop dead tomorrow, could your family pay the bills? Do they even have the cash to bury you?

Again, unless you have plenty of cash in your coffers, you need life insurance. Even if you’re wealthy, you might want a policy to help your family pay off estate taxes.

Beyond that, life insurance can come with added bonuses that make it a smart buy. For example, some policies offer living benefits that let you tap into your death benefits if you’re terminally ill.

9. Retirement fund

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Someday you’ll want to retire, and God help you if you plan just to live off Social Security. As of February, the average Social Security benefit was $1,249.55 per month — just under $15,000 per year, according to the Social Security Administration.

If that seems like a pathetically small amount, the SSA provides this explanation:

But Social Security was never meant to be the only source of income for people when they retire. Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisers say retirees will need 70 percent or more of pre-retirement earnings to live comfortably.

So take a cue from the SSA and make sure you have another source of income for your golden years.

Your first stop for retirement savings should be a 401(k) plan if your employer provides a match of any kind. After that, look for a tax-sheltered plan such as an individual retirement account. For information, see “Confused by Retirement Accounts? Roth, Regular IRAs and 401(k)s Made Simple.”

10. College savings account

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If you’re childless and plan to keep it that way, you get a pass on this final must-have financial product. Most everyone else should start planning for college now.

Even if you intend to have your children pay their own way, you never know what the future may hold, or how your views may evolve over time. It is best to put some money aside in savings now just in case.

The 529 college savings plans and Coverdell educational savings accounts are common ways to get tax advantages for your kid’s college fund. However, you must use the money for educational purposes or you’ll get hit with a tax penalty. (You can always transfer the money to another child if things don’t pan out for student No. 1.)

If you aren’t confident you’ll actually be paying college expenses for your children, you may want to put money aside in an investment fund. Then, if they get a full-ride scholarship or burn out in the first semester, you’ll have a nice chunk of money for retirement, or maybe a dream vacation to celebrate or de-stress.

Would you add or remove any products from this list? Sound off in a comment below or on our Facebook page.

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