Beyond Ozzie and Harriet

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For instance, a healthy 40-year-old woman in Massachusetts could get a 20-year policy with no change in annual premium payments for $700 to $900 a year, or $58 to $75 per month. Also crucial is a will that provides for guardianship of children.

Long-term disability insurance is important as well. It's really paycheck protection, or more accurately, partial paycheck protection. Disability insurance replaces a portion of your income if you can't work because of an illness or injury. A typical group plan policy is cheap as part of an employee's benefits package, costing the employee nothing to a few dollars a month. An employer's policy usually replaces up to 60% of salary, and highly compensated employees often pay for supplemental coverage offered through their employer or buy an individual policy to boost coverage by an additional 10% to 20%. It's much more expensive to buy an individual policy if your employer doesn't offer one—usually about 3% of your annual salary.

After paying those bills, finding the money to keep saving may seem difficult. But Rick Brooks, a CFP with Blankinship & Foster in Solana Beach, Calif., urges single mothers to try. He recently put together a plan for a friend who is a single mom. Working through a temp agency, she had had three jobs over three years. He encouraged her to set a goal of putting aside enough money to meet two years of expenses. "From my perspective, unless you have a very stable job, single moms really need to focus on building up rainy day funds and paying down debt," says Brooks.

TRADITIONAL COUPLE

The rules of thumb for traditional couples are often inadequate for dealing with blended families, older boomers with young children, and marriages with a significant age difference between partners. For instance, for couples who are about the same age, it often makes sense to reduce sharply or even eliminate life and disability insurance policies as retirement nears and the children go off on their own. But for late-age boomers with young children, eliminating life and disability coverage doesn't make sense. They may also need to plan on retiring later, perhaps not until age 70. That way, their savings will compound longer and they'll have some income to help out with college expenses.

It's not unusual today for an older husband to be thinking about retirement while his younger wife's career is going gangbusters. And an age difference can affect something as basic as deciding when a spouse should start taking Social Security payments. That was the case with David Perlmutter and his wife, Kathy. The 63-year-old Palo Alto (Calif.) entrepreneur sold his business, usedlaptops.com, in 2007 and decided to retire a year ago. His wife, 52, continues to work as a vice-president at the health-care information technology company Cerner (CERN). She contributes the maximum into her 401(k) plan to minimize current taxes. But David decided to start taking Social Security. His reasoning: They have two children under age 18. Since he is retired and claims the children as dependents on his taxes, each child gets $9,000 from Social Security. The total annual family benefit from Social Security is $36,000.

Perlmutter exemplifies another trend some might label unconventional but that's becoming more common—the stay-at-home dad. And, as women have long noted, remaining home with the kids can be a full-time job. "My wife works all the time," says Perlmutter. "It isn't really retirement, since I do all the cleaning, cooking, and taking care of the kids. It's funny how roles have reversed."

Farrell is contributing economics editor for BusinessWeek. You can also hear him on American Public Media's nationally syndicated finance program, Marketplace Money, as well as on public radio's business program Marketplace. His Sound Money column appears on BusinessWeek.com.

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