Your career is getting underway. Now is the time to begin looking ahead to your own retirement. But you find yourself trapped in the position of having to help your children with college expenses while at the same time looking after the needs of your aging parents. You're already Degree Rich, Money Poor...but now squeezed in the middle, you've joined the exclusive ranks of The Sandwich Generation.

What Challenges Will You Face?
Your parents encountered some of the same challenges that you may be facing now: adjusting to a new life with growing children and nurturing multiple generations within the family. However, life has grown even more complicated in recent years. Here are some of the things you can expect to confront as a member of the sandwich generation today:

• Your parents may need assistance as they become older. Higher living standards mean an increased life expectancy, and higher health care costs mean larger medical bills. Additionally, your parents will likely need to help preparing their estates (if any) for the future.
• If your family is small and widely dispersed, you may end up as the primary caregiver for your parents.
• If you've delayed having children so that you could focus on your career first, your children may be starting college at the same time as your parents become dependent on you for support.
• You may be facing the challenges of adult "boomerang children" who have returned home after a divorce or a job loss.
• Like many individuals, you may be incurring debt at an unprecedented rate and wondering about the future of Social Security.

What Can You Do to Prepare for the Future?
Holding down a job and raising a family in today's world is hard enough without having to worry about keeping the three-headed monster of college, retirement, and concerns about elderly parents at bay. But if you take some time now to determine your goals and work on a flexible plan, you'll save much stress--and expense--in years to come. Planning ahead gives you the chance to take the wishes of the entire family into account and to reduce future disagreements with your siblings over the care of your parents.

Here are some ways you can prepare now for the issues you may face in the future:

• Start saving for the rising costs of college as soon as possible.
• Work hard to control your debt. Installment debts (car payments, credit cards, personal loans, college loans, etc.) should account for no more than 20 percent of your take-home pay.
• Review your financial goals regularly, and make any changes to your financial plan that are necessary to accommodate an unexpected event, such as a career change or the illness of a parent.
• Invest in your own future by putting as much as you can into a retirement plan, where your savings (which may be matched by your employer) grow tax deferred until you retire.
• Encourage realistic expectations among your children; their desire to attend an expensive college will add to your stress if you can't afford it.
• Talk to your parents about the provisions they've made for the future. Do they have long-term care insurance? Adequate retirement income? Learn the whereabouts of all their documents and get a list of the professionals and friends they rely on for advice and support.

Caring for Your Parents
Much depends on whether a parent is living with you or out of town. If your parent lives a distance away, you have the responsibility of monitoring his or her welfare from afar. Daily phone calls can be time consuming, and having to rely on your parent's support network may be frustrating. Travel to your parent's home may be expensive, and you may worry about being away from family. To reduce your stress, try to involve your siblings (if you have any) in looking after Mom or Dad, too. If your parent's needs are great enough, you may also want to consider hiring a professional geriatric care manager who can help oversee your parent's care and direct you to the community resources your parent needs.

Eventually, though, you may decide that your parent needs to move in with you. If this happens, keep the following points in mind:

• Share all your expectations in advance; a parent will want to feel part of your household and may be happy to take on some responsibilities.
• Bear in mind that your parent needs a separate room and phone for space and privacy.
• Contact local, civic, and religious organizations to find out about programs that will involve your parent in the community.
• Try to work with other family members and get them to help out, perhaps by providing temporary care for your parent if you must take a much-needed break.
• Be sympathetic and supportive of your children--they're trying to adjust, too. Tell them honestly about the pros and cons of having a grandparent in the house. Ask them to take responsibility for certain chores, but don't require them to be the caregivers.

Considering the Needs of Your Children
Your children may be feeling the effects of your situation more than you think, especially if they are teenagers. At a time when they are most in need of your patience and attention, you may be preoccupied with your parents and how to look after them.

Here are some things to keep in mind as you try to balance your family's needs:

• Explain fully what changes may come about as you begin caring for your parent. Usually, children only need their questions and concerns to be addressed before making the adjustment.
• Discuss college plans with your children. They may have to settle for less than they wanted, or at least take a job to help meet costs.
• Avoid dipping into your retirement savings to pay for college. Your children can repay loans with their future salaries; your pension will be the only income you have.
• If you have adult "boomerang children" at home, make sure all your expectations have been shared with them, too. Don't be afraid to discuss a target date for their departure.
• Don't neglect your own family when taking care of a parent. Even though your parent may have more pressing needs, your first duty is to your children who depend on you for everything.

You're No Good to Anyone if You're No Good to Yourself
Most importantly, take care of yourself. Get enough rest and relaxation every evening, and stay involved with your friends and interests. Keep lines of communication open with your spouse, parents, children, and siblings. This may be especially important for the smooth running of your multi-generation family, resulting in a workable and healthy home environment.

A variable annuity is a contract between an individual (the purchaser) and an insurance company (the insurer). In return for premium payments, the insurer agrees to make periodic payments to the purchaser (if the purchaser elects this option), beginning either immediately or at some future date. Deposits can be made by either a single purchase payment or a series of purchase payments.

Purchasers of variable annuities have some control over the manner in which their annuity premiums are invested (unlike fixed annuities). The investment options (or sub accounts) for a variable annuity will usually include stocks, bonds, money market instruments, or some combination of the three. As the purchaser, you can designate how your premium dollars will be allocated among the offered investment choices.

Variable Annuity Features
Like all annuities, variable annuities possess a unique combination of attributes:

• Tax deferral: Taxes on the income and investment gains from the annuity are deferred until money is withdrawn. Note that all distributed earnings are taxed at ordinary income tax rates and never at capital gains rates. Distributions taken before age 59½ are subject to a 10 percent early withdrawal penalty tax on earnings.
• Periodic payments: Proceeds can be distributed in periodic payments for the life of the annuitant, or for the lives of the annuitant and a spouse (or some other person). If this option is elected, the annuitant cannot outlive the payment stream.
• Death benefits: If an annuitant dies before reaching the annuity payout date, his or her beneficiary is generally guaranteed a death benefit. (Guarantees are subject to the claims-paying ability of the issuing insurance company.) The amount of the death benefit is usually the greater of an amount specified in the annuity contract, or the amounts contributed to the contract and the investment income credited to the contributions, reduced by any withdrawals made from the annuity. Annuity proceeds paid at the death of the annuitant will bypass probate if left to a named beneficiary.
• The funds in an annuity are generally unreachable by creditors (laws vary by state).

The Phases: Accumulation and Payout
Like other annuities, there are two phases to a variable annuity: the accumulation phase and the payout phase.

During the accumulation phase, you (as the purchaser of the annuity) make payments that are allocated to the various investment options. You can typically transfer funds from one investment option to another without paying tax on the investment income and gains.

After the accumulation phase, the funds are paid out (the payout phase). At the beginning of the payout phase, you generally elect how you want to take payouts--in a lump sum, as funds are needed, or annuitized over your life, the joint life of you and another individual, or over a specific period of time.

The amount of each periodic payment you receive depends in part, of course, on how you elect to take payouts.

The Death Benefit
Variable annuities commonly provide a death benefit. The amount of the death benefit may be specified in the annuity contract, or it may be calculated as the greater of some guaranteed minimum (e.g., all purchase payments minus withdrawals) or all the moneys in the account at the time of death. (Guarantees are subject to the claims-paying ability of the issuing insurance company.)

Many variable annuities allow you to choose a stepped-up death benefit for an additional charge. The stepped-up benefit is a higher guaranteed death benefit, for which the insurance company charges extra premiums. The advantage of these benefits is that you will know with some certainty how much your beneficiary will receive when you die.

A number of other optional benefits can be purchased as part of a variable annuity policy to guarantee higher streams of payments. Of course, these benefits add to the cost of purchasing the annuity.

Annuity Fees
Among the many major differences between mutual funds and variable annuities are the relatively high fees charged to annuity holders. But with variable annuities, the sales load is a substantial up-front amount the consumer must pay to buy into the contract, combined with an ongoing yearly maintenance fee, and finally a surrender charge, which is applied only on withdrawals during the initial years after purchase, usually about seven years.

All of these miscellaneous fees go directly into your stockbroker's pockets (Hey, muli-billion dollar international stock brokerage firms have to eat too! How else can they afford the Lear jets and a decent Ivy League education for Junior? Have a heart!)

Are Variable Annuities Right For You?
We very rarely advise our clients to invest in variable annuities. There are some cases--only if you've already maxed out your Roth IRA and 401k for the year in which you may look into a fixed annuity option. Otherwise, if you are under 40, your best bet to facilitate growth and minimize costs (go back and count the number of times we used the words "load" and "fee "above") is to stick with low-cost, no load index mutual funds. A diversified mix of quality index funds remains our favorite strategy, and we will continue to steer client away from the variable annuity trap.

As a young, educated individual, you certainly never expected divorce when you cut the wedding cake--all along, you've planned on spending the rest of your live with the same spouse. Unfortunately, the fairy tale didn't work out, and you're headed for a divorce. So where do you begin?

Divorce can be a lengthy process that will strain your emotional, psychological, and financial limits, and it will almost certainly leave you feeling out of control. But with the right preparation, you can protect your interests, take charge of your future, and save yourself time and money.

First Things First: Should You Hire an Attorney?
There's no legal requirement that you hire an attorney when divorcing. In fact, going it alone may be a sensible option if you're young and have been married only a short time, are childless, and have few assets. However, most divorcing couples hire attorneys to better protect their interests, even though doing so can be expensive. Divorce attorneys typically charge hourly rates and require you to submit retainers (lump sums) up front. It's not unusual, for example, for an attorney to charge as much as $150 to $200 per hour and require an initial retainer of up to $2,500 to $5,000. The fee depends on the complexity of the case, the reputation and experience of the divorce attorney, and your geographic location.

You should know that if you're a homemaker or earn less income than your spouse, it's still possible to obtain legal representation. You can submit a motion to the court, asking a judge to order your spouse to pay for your attorney's fees.

If you and your spouse can agree on most issues, you may save time and money by filing an uncontested divorce. If you can't agree on significant issues, you may want to meet with a divorce mediator, who can help you resolve issues that the two of you can't resolve alone. To find a mediator, contact your local domestic relations court, ask friends for a referral, or look in the telephone book. Certain attorneys, members of the clergy, psychologists, social workers, marriage counselors, and financial planners may offer their services as mediators.

Save Time and Money: Do Your Homework Before Meeting with a Divorce Professional
To save time and money, compile as much of the following information as you can before meeting with an attorney or other divorce professional:

• Each spouse's date of birth
• Names and birthdates of children, if you have any
• Date and place of marriage and length of time in present state
• Existence of prenuptial agreement
• Information about parties' prior marriages, children, etc.
• Date of separation and grounds for divorce
• Current occupation and name and address of employer for each spouse
• Social Security number for each spouse
• Income of each spouse
• Education, degrees, and training of each spouse
• Extent of employee benefits for each spouse
• Details of retirement plans for each spouse
• Joint assets of the parties
• Liabilities and debts of each spouse
• Life (and other) insurance of each spouse
• Separate or personal assets of each spouse, including trust funds and inheritances
• Financial records
• Family business records
• Collections, artwork, and antiques

If you're uncertain about some of these areas, you can obtain the necessary information through your spouse's financial affidavit and/or the discovery process, both of which are mandated by the court.

Consider the Big Questions, Such as Child Custody and Alimony
Although your divorce professional will help you work through the big issues, you might want to think about the following questions before meeting with him or her:

• If you have children, what are your wishes regarding custody, visitation, and child support?
• Whose health insurance plan should cover the children?
• Do you earn enough money to adequately support yourself, or should alimony be considered?
• Which assets do you really want, and which are you willing to let your spouse keep?
• How do you feel about the family home? Do you feel strongly about living there, or should it be sold or allotted to your spouse?
• Will you have enough money to pay the outstanding debt on whatever assets you keep?

In addition to an attorney, you may want to see a therapist to help you clarify your wishes, express yourself more clearly, and deal with any child-related issues. Such counseling is typically covered by health insurance.

Some General Dos and Don'ts

Keep the following tips in mind:

• Do prepare a budget and a financial plan to sustain you until your divorce is final. Get help if you don't currently have the skills and energy to do this on your own.
• Do review monthly bank and financial statements and make copies for your attorney.
• Do review all tax returns that have been filed jointly or separately by your spouse.
• Do make sure all taxes have been paid to date.
• Do review the contents of any safe-deposit boxes.
• Do get emotional support for yourself--talk to friends, join a support group, or see a therapist.
• Don't make large purchases or create additional debt that might later cause financial hardship.
• Don't quit your job.
• Don't move out of the house before consulting your attorney.
• Don't transfer or give away assets that are owned jointly.
• Don't sign a blank financial statement or any other document without reviewing it with your attorney.

Are health insurance premiums taking too big of a bite out of your budget? Do you wish you had better control over how you spend your health-care dollars? If so, you may be interested in an alternative to traditional health insurance called a health savings account (HSA).

How Does a Health Savings Account work?
An HSA is a tax-advantaged account that's paired with a high-deductible health plan (HDHP). Let's look at how an HSA works with an HDHP to enable you to cover your current health-care costs and also save for your future needs.

Before opening an HSA, you must first enroll in an HDHP, either on your own or through your employer. An HDHP is "catastrophic" health coverage that pays benefits only after you've satisfied a high annual deductible. (Some preventative care, such as routine physicals, may be covered without being subject to the deductible.) For 2007, the annual deductible for an HSA-qualified HDHP must be at least $1,100 for individual coverage and $2,200 for family coverage. However, your deductible may be higher, depending on the plan.

Once you've satisfied your deductible, the HDHP will provide comprehensive coverage for your medical expenses (though you may continue to owe co-payments or coinsurance costs until you reach your plan's annual out-of-pocket limit). A qualifying HDHP must limit annual out-of-pocket expenses (including the deductible) to no more than $5,500 for individual coverage and $11,000 for family coverage (for 2007). Once this limit is reached, the HDHP will cover 100% of your costs, as outlined in your policy.

Because you're shouldering a greater portion of your health-care costs, you'll usually pay a much lower premium for an HDHP than for traditional health insurance, allowing you to contribute the premium dollars you're saving to your HSA. Your employer may also contribute to your HSA, or pay part of your HDHP premium. Then, when you need medical care, you can withdraw HSA funds to cover your expenses, or opt to pay your costs out-of-pocket if you want to save your account funds.

An HSA can be a powerful savings tool. Because there's no "use it or lose it" provision, funds roll over from year to year. And the account is yours, so you can keep it even if you change employers or lose your job. If your health expenses are relatively low, you may be able to build up a significant balance in your HSA over time. You can even let your money grow until retirement, when your health expenses are likely to be substantial. However, HSAs aren't foolproof. If you have relatively high health expenses (especially within the first year or two of opening your account, before you've built up a balance), you could deplete your HSA or even face a shortfall.

HSA as a Tool for Tax Reduction

HSAs offer several valuable tax benefits:

• You may be able to make pretax contributions via payroll deduction through your employer, reducing your current income tax.
• If you make contributions on your own using after-tax dollars, they're deductible from your federal income tax (and perhaps from your state income tax) whether you itemize or not. You can also deduct contributions made on your behalf by family members.
• Contributions to your HSA, and any interest or earnings, grow tax deferred.
• Contributions and any earnings you withdraw will be tax free if they're used to pay qualified medical expenses.

Consult a tax professional if you have questions about the tax advantages offered by an HSA.

Can Anyone Open an HSA?

Any individual with qualifying HDHP coverage can open an HSA. However, you won't be eligible to open an HSA if you're already covered by another health plan (although some specialized health plans are exempt from this provision). You're also out of luck if you're 65 and eligible for Medicare or if you can be claimed as a dependent on someone else's tax return.

How Much Can I Contribute to an HSA?

Each year, you can contribute up to $2,850 for individual coverage and $5,650 for family coverage (for 2007). This limit applies to all contributions, whether they're made by you, your employer, or your family members. You can make contributions up to April 15th of the following year (i.e., you can make 2007 contributions up to April 15, 2008). If you're 55 or older, you may also be eligible to make "catch-up contributions" to your HSA, but you can't contribute anything once you reach age 65.

Note: Starting in 2007, you'll be able to make a one-time tax-free rollover of funds to your HSA from a health flexible spending account (FSA), a health reimbursement arrangement (HRA), or a traditional IRA (certain limits apply).

Can I Invest My HSA funds?
HSAs typically offer several savings and investment options. These may include interest-earning savings, checking, and money market accounts, or investments such as stocks, bonds, and mutual funds that offer the potential to earn higher returns but carry more risk (including the risk of loss of principal). Make sure that you carefully consider the investment objectives, risks, charges, and expenses associated with each option before investing. A financial professional can help you decide which savings or investment options are appropriate.

How Else Can I Use My HSA Funds?
You can use your HSA funds for many types of health-care expenses, including prescription drugs, eyeglasses, deductibles, and co-payments. Although you can't use funds to pay regular health insurance premiums, you can withdraw money to pay for specialized types of insurance such as long-term care or disability insurance. IRS Publication 502 contains a list of allowable expenses.

There's no rule against using your HSA funds for expenses that aren't health-care related, but watch out--you'll pay a 10% penalty if you withdraw money and use it for nonqualified expenses, and you'll owe income taxes as well. Once you reach age 65, however, this penalty no longer applies, though you'll owe income taxes on any money you withdraw that isn't used for qualified medical expenses.

Most of us pay the premiums on our life insurance policies by simply writing checks to the insurer. But if you're a high-net-worth individual, you may need a large amount of life insurance, requiring significant premium payments, and it may not make the most sense to pay those high premiums with cash. Premium financing may be an appropriate alternate strategy, allowing you to borrow the money from a third party to pay the premiums for the life insurance you need.

Suitable Candidates
The concept of borrowing money to pay life insurance premiums may sound simple in theory. However, the practical application can be complex and challenging. That's why premium financing should only be used in particular situations. Generally, you're a candidate if you:

• Are affluent (at least $5 million net worth)
• Are older (perhaps age 65 or above)
• Are insurable
• Are creditworthy
• Require a substantial amount of life insurance (with premiums in the 6- or 7-figure range)
• Meet the lender's requirements (e.g., minimum collateral)
• Are knowledgeable of and comfortable with risk and leverage

How Does Premium Financing Work?
First, you apply to an insurer for a life insurance policy indicating that the premium will be financed. If the insurer offers a policy with financed premiums, you apply for a loan from a third party lender. The insurance policy and the loan are separate and distinct transactions--the insurer is not a party to the loan. You'll generally be required to make a down payment, and the lender will make the remaining premium payments to the insurer. You agree to repay the lender the principal, interest, and other fees. You also must pledge collateral for the loan, which may include the cash surrender value of the policy plus additional collateral and/or a personal guarantee.

With some premium financing arrangements, you pay off the loan in installments over the original loan term. More commonly, however, the loan is continually renewed at the end of each term, and is repaid at your death out of the insurance proceeds. With the latter type of arrangement, you either pay the interest and fees to the lender annually (a noncapitalized loan), or the interest and fees are added to the loan principal (a capitalized loan).

The Risks
There are significant risks associated with premium financing, as there are with any leveraging strategy. These risks include:

Loan interest rate and requalification risk--Lenders usually require that you requalify for the loan at each loan renewal, and that the collateral be reevaluated. If your financial position has deteriorated, or the value of the collateral has declined, there is the risk that the loan will not be renewed or that it will be offered at a higher rate than the original loan. If rising interest rates cause the loan balance to exceed the value of the collateral, you may be required to post additional collateral. It's also possible that the loan could be called for default.

Policy earnings risk--If the insurance policy cash values do not increase as expected, the loan balance may exceed the value of the collateral. If this happens, you may be required to post additional collateral. Also, if the policy values fail to keep pace with the loan, more of the death benefit will be needed to repay the loan, reducing the ultimate death benefit that will be available to meet your objectives, which may include providing for loved ones.

Plan design risk--The insurance policy and the loan are separate and distinct transactions, and they operate independently. The lender may decline to renew the loan at the end of the term (if, for example, you fail to requalify). This would put the insurance policy in jeopardy of cancellation for nonpayment of premiums if alternate funding can't be found.

Because of these and other risks, and the complexities involved, be sure to consult your financial professional before entering into any premium financing arrangement.

A self-directed IRA isn't a different type of IRA. Rather, the term refers to any individual retirement account (traditional or Roth) that gives you more investment control by allowing you to direct your IRA assets into nontraditional investments.

For example, in addition to the usual IRA mainstays (stocks, bonds, mutual funds, and CDs), a self-directed IRA might invest in real estate, options, limited partnership interests, or anything else the law (and your IRA trustee/custodian) allows. In fact, the only investment you can't have in an IRA is life insurance. (Collectibles--for example, artwork, stamps, wine, and antiques--aren't prohibited, but if your IRA purchases these items, you could suffer adverse tax consequences.)

Get A Specialist
To get started, you'll need to find a trustee or custodian that specializes in self-directed IRAs. Make sure you understand the expenses involved--some trustees charge transaction fees and/or asset-based fees, depending on the particular investment.
You also need to be aware of the prohibited transaction rules. These rules are designed to make sure that only your IRA, and not you (or your immediate family), benefits from your IRA transactions. For example, you are prohibited from buying investments from, or selling investments to, your IRA. If you violate these rules, your account will cease to be treated as an IRA, with potentially devastating tax consequences.

Understand the Additional Costs
Finally, you need to understand the UBIT (unrelated business income tax) rules. Even though IRA investments usually grow tax deferred (or even potentially tax free in the case of a Roth IRA), if your IRA conducts certain business activities, or has debt-financed income, then your IRA could be taxed currently on all or part of the income generated.

Although we don't generally recommend these alternative IRA accounts, a qualified financial professional can help you weigh the benefits and risks of a self-directed IRA...and help you determine if it's the right choice for you.

When deciding if your parents, grandparents, or yourself can afford to retire early, the cost of health insurance should be a key factor in the financial equation. Unless you're lucky enough to have retiree health benefits through an employer, or are entitled to coverage through a spouse's plan, you may need to consider individual health coverage and pay the entire premium cost--which can be high--until the senior becomes eligible for Medicare at age 65. If you're looking to bridge the gap between the time of retirement and the time of Medicare enrollment, one option worth considering is a health savings account (HSA).

HSA basics
An HSA is a tax-favored account that can be opened in conjunction with a high-deductible health plan (HDHP) to pay for current health costs and save for future ones. The HSA/HDHP option may be attractive to healthy retirees under age 65 who want more flexibility and potentially lower health insurance premiums than traditional individual health insurance offers.
An HDHP begins to pay benefits only after you've satisfied a high annual deductible (at least $1,100 for individual coverage in 2007), although some preventative care may be covered in full immediately. Because you're shouldering a greater portion of your health-care costs, you'll usually pay a lower premium for an HDHP than for traditional health insurance, and you can contribute your premium savings to your HSA. In 2007, you can contribute up to $2,850 if you have individual coverage, and if you're 55 or older, you can make an extra "catch-up contribution" of up to $800. Your HSA contributions are tax deductible, and accumulate tax deferred (along with any earnings) until withdrawn. You can use your HSA funds to pay qualified health-care expenses that aren't covered by your plan. Before age 65, you can withdraw money and use it for nonqualified expenses, but you'll generally pay a 10% penalty, and you'll owe income taxes on the amount you withdraw.

What Happens at Age 65?
Once you reach age 65 and enroll in Medicare Part A or B, you're no longer eligible for a high-deductible health plan, and that means you can no longer contribute to your HSA. However, any money remaining in the account is yours to keep.
Reaching age 65 gives you a little more flexibility when it comes to using your HSA funds, since at age 65 the 10% penalty on nonqualified withdrawals no longer applies. But before you use your account funds for something other than health-care expenses, keep in mind that you'll still owe income taxes on money used for nonqualified expenses.
The only way to avoid paying taxes on your HSA funds (at any age) is to use them for qualified health-care expenses. Fortunately, the list of qualified expenses is long, and includes items such as prescription drugs, eyeglasses, and Medicare-related expenses such as premiums, deductibles, and co-payments. If you have health benefits through your former employer, you can use your HSA funds to pay your share of your retiree health insurance premium. And, if you decide to buy a tax-qualified long-term care insurance policy, you can also use your HSA funds to pay the premiums (though dollar limits apply). One thing you're not allowed to use your HSA dollars for is the premium cost of a Medigap policy to supplement your Medicare coverage. For a list of other qualified expenses, see IRS Publication 502, Medical and Dental Expenses.

Although no one enters marriage with the intention of ultimately getting a divorce, the sad truth is that many marriages today do end in separation. For most couples, it can be prudent to have a prenuptial agreement.

What is it?
A "prenup" is a legally binding contract between two people who are about to marry which, among other things, dictates how property will be divided in the event of a divorce, and whether alimony or spousal support will be paid. In the absence of such an agreement, state law decides these issues.

A typical prenup agreement states that each partner will keep the property they bring into the marriage, and that assets accumulated during the marriage will be split 50/50. However, your prenup should be customized to your particular situation. You should consider having a prenup if you fall into any of the following categories:

• You earn significantly more income than your future spouse
• You have substantial assets
• Your spouse has substantial debt
  
• You own a business or business interest
• You anticipate receiving an inheritance
• You have children from a previous marriage

Although the concept of a prenup seems like it might extinguish the flames of romance, the open communication it requires often serves as a powerful building block to a strong marriage. It can also provide each partner with financial security and peace of mind, and may save you from emotional distress and court costs later on.

Make it Legal
To create a valid prenup, keep the following points in mind:

• Hire a separate and independent lawyer for each partner
• Sign the prenup at least six months before the wedding
• Fully disclose all financial information
• Make sure the agreement is fair and reasonable to both parties

Do you own your own business? If so, then you know how important it is to keep some cash available to pay bills. But assuring adequate cash flow doesn't mean your assets can't do more for you. For example, if you have an infusion of cash that you don't expect to spend immediately, you don't have to let it sit idle. It may make sense to explore alternatives for putting at least some of that money to work. Managing your working capital wisely can help improve your business's overall performance.

Determine Your Time Frame
Before you think about increasing returns on any excess cash, you need to make sure you've adequately forecasted upcoming needs. What looks like excess now could be needed if your cash flow projection is faulty or an emergency arises.

Is your cash flow relatively steady? Does it change dramatically from season to season? Vary from month to month, or year to year? All of these factors will influence whether and how you should put working capital to work.

For money that's likely to be used at any moment, your major objective is to preserve both capital and liquidity. For money that isn't needed immediately--for example, money you plan to use eventually to grow the business or pay off existing debts--you may have additional flexibility to try to increase the return on that money until it's needed.

For Money You'll Use Soon
A high-yield savings account, especially one linked to your checking account, is a relatively straightforward option, and one you may already be using. You may be able to combine your checking and savings balances to meet any minimum balance requirements and avoid monthly fees. A savings account's yield will depend in part on how actively a bank is courting deposits, so it can pay to comparison-shop. Also, check on how many transactions are allowed each month.

If you're a sole proprietor or run a nonprofit organization, you may be able to find an interest-bearing checking account. Otherwise, a sweep account combines a checking account with an investment account that pays interest. With a sweep account, you set a target balance for the checking account. Once transactions have been posted each day, the account automatically sweeps any cash above that target amount into the income-producing account--often a money market account or mutual fund, though you may also be able to choose from a range of investments. Investments are automatically liquidated as necessary and the proceeds moved into the checking account to cover outstanding payments and maintain the target balance, which in some cases may be as low as zero.

A sweep account also may be linked to a line of credit, enabling you to set a zero target balance for one or more checking accounts and borrow to cover checks. Deposits are then automatically used to pay down the line of credit and minimize interest charges.

If You Have a Longer Time Horizon
If you're confident you won't need the money for at least several months--for example, if you're raising capital for a future expansion or equipment purchase--you could explore buying a certificate of deposit (CD) with a term that matches your time frame. You get a guaranteed interest rate, FDIC insurance up to $100,000, and return of your principal when you need it. Or put some money into a short-term CD and the rest into a longer-term investment with a higher yield. If an emergency requires use of the money, you might forfeit interest on only part of the assets.

You also could explore short-term Treasury bills, which can be bought in $1,000 multiples and whose terms range from a few days to six months. T-bills are bought at a discount to their face value; when they mature, you receive the difference between the purchase price and the face value as interest. Treasury notes are available in 2-, 5-, and 10-year denominations. CDs and T-bills can be rolled over if they mature before you need the cash.

A short-term bond fund might offer a higher yield; however, it will not be FDIC-insured. Also, share prices of the fund may go down as a result of interest rate increases, and you could lose principal. Companies in a high tax bracket or with frequent large cash balances might consider tax-exempt bonds or even a custom-tailored money management solution.

If you're a sole proprietor, you have more freedom to invest the money as you might in a personal account--for example, by having an investment account with a specific goal, such as retirement or purchasing office space.

Perhaps you're fortunate enough to be considered wealthy--maybe even very wealthy. If so, you know that wealth alone doesn't fulfill all your dreams; in fact, it may create a few challenges of its own. Where can you turn for advice tailored to your level of wealth? The answer may be wealth management.

What is Wealth Management?
Wealth management offers an individually customized array of sophisticated financial planning services to high-net-worth clients. These services may include banking, investment portfolio management, asset and trust management, legal services, taxation advice, protection planning, and estate planning. Services may be provided by a team of professionals under one roof; alternatively, a wealth manager may coordinate the efforts of a customized network of professionals who specialize in the areas relating to your needs.

Wealth managers work with you to articulate and understand the hopes, dreams, and goals you really want to fulfill with your wealth, then craft solutions to help. These plans focus not only on accumulating wealth, but also on protecting and distributing it, both during your lifetime and after your death.

Managing What You Have
You've already been successful at accumulating wealth; now you need to optimize the degree that your dollars work for you. Wealth managers may ask probing questions to help paint a picture of your fundamental desires, and then recommend investment vehicles, asset allocations, and even borrowing strategies designed to help you most effectively obtain all you'll need to fulfill those dreams at a level of risk you're comfortable with.

Minimizing Your Risk
As you accumulate your wealth, you'll need to have measures in place to protect it. What if the market changes--will your investments still be allocated appropriately? Are your assets structured in the best possible way to minimize taxes, not only as you accumulate them, but also as you distribute them during your lifetime and after your death? And what would happen to your plan if you were to fall ill, become disabled, need long-term medical care, or die?

A wealth manager may recommend adjustments to your investment portfolio as the financial weather changes, structure tax-advantaged investment vehicles most congruent with your goals and timetable, and suggest life, health, disability, and long-term care insurance products appropriate for your situation.

Deciding What to Take When
In most cases, you'll have accumulated your wealth to provide (at least in part) for your own retirement needs. But what will your needs be? Wealth managers help you assess your anticipated retirement lifestyle and its cost, the assets you'll have to meet that cost, and the best ways to "cash in" those assets--everything from when to start collecting your pension payments to how much and in what order to draw against your investments.

Leaving a Legacy
Perhaps you want to help your heirs get a "leg up" in life, or maybe you want to engage in philanthropy, or both. Wealth managers can help you explore what's most important to you when it comes to leaving a legacy, and can devise strategies (e.g., trusts, beneficiary designations, and leveraging transfer tax allowances and gift tax exclusions) to help you make your dreams a reality.

Don't just dream about what you want--reach for it. A wealth management team can help you find creative solutions to fit all your financial needs.