What is the life event that is the most likely to leave you broke or at least cause serious damage to your financial security? You might think it would be a business failure, a job loss, or a lawsuit. Nope. It’s a divorce.

There’s a good reason all those multi-married celebrity multi-millionaires protect their fortunes by having prospective spouses sign prenuptial agreements. For ordinary people with ordinary incomes, a divorce is even more likely to be a financial as well as an emotional disaster. Dividing assets, paying attorney’s fees, paying child support, and providing for separate households can move a family from “upper middle class” status to “struggling to pay the bills” faster than almost any other cause.

Another leading cause of financial devastation is a serious health problem. Even if a major illness or serious injury is covered by health insurance—not necessarily a given in today’s world—its financial impact can be severe. A serious illness in the family, whether it affects a parent or a child, often results in one of the family breadwinners having to quit a job. Add in all the illness-related expenses that insurance doesn’t cover, and a family can go through all its savings and other assets in a very short time.

As my clients and regular readers of this column know, I’m a great fan of asset protection. My role as a financial planner is not just to help clients build their assets, but to help them preserve what they have. Over the years I’ve learned that asset protection means committing resources to take care of intangible as well as financial assets.

For example, I now ask clients to take two health evaluations as a routine part of our financial planning process. These give me estimated longevity estimates that are helpful in my retirement cash flow projections. Even more important, they can spark conversations with clients about what they can do to maintain and improve their health. Because poor health can be a major destroyer of a retiree’s nest egg, staying healthy is an investment in one’s financial as well as physical and emotional well-being. For the same reason, it’s important to consider disability insurance as well as health and life insurance.

It makes sense to apply the same perspective to relationships. A regular date night with your spouse, a couple’s workshop, or a series of sessions with a counselor to help resolve a long-standing conflict might seem to be something you can’t afford. Even those of us committed to personal growth probably would hesitate to describe couple’s counseling or individual therapy as investments that might have a tangible financial return.

Yet many of us regularly spend significant amounts of money and time to attend college or seminars to build and maintain our professional skills. We recognize these costs as worthwhile investments to keep our careers and businesses profitable as well as fulfilling. The same thinking makes sense when applied to a marriage.

For an eye-opening exercise, try writing down the costs over perhaps six months or a year of couple’s counseling, dates, and other expenses related to maintaining a strong marriage. Then compare those numbers to the anticipated cost of a divorce—the long-term costs, not just the immediate expenses such as attorney’s fees. Seeing the comparison in harsh financial terms is a persuasive argument for relationship-building expenses as investments you can’t afford not to make.

Most of us think of good health and strong family relationships as valuable intangible assets. Indeed they are, but they have measurable financial value as well. The quality of those intangible assets has a direct impact on your pocketbook and your net worth.

My office got an unusual number of phone calls and emails from clients in June. Most of them went something like this: “Rick? I just got my TD Ameritrade statement for this month, and it says last month’s balance was $873,000 and the current balance is zero. And I see from reading your webpage that you’ve been traveling a lot lately. Is there something you haven’t been telling me?”

It’s true that I have been traveling and that I found Norway an expensive place to visit. It’s also true that the latest brokerage statements for all my clients showed zero balances. There was, however, no cause-and-effect relationship between those two facts.

The reason for the zero balances was simple enough. Client accounts have been transferred within TD Ameritrade from one entity to another. This was explained on the statements, as follows: “Please be aware that this statement shows a zero month-end balance because the assets were transferred to TD Ameritrade Clearing, Inc. mid-month. You will receive another statement from TD AMERITRADE Clearing, Inc. for the month of May. That statement will show all positions and transaction history post-Conversion.”

The explanation appeared on page five. In small print. Not highlighted in any way. It was followed by this helpful sentence: “If you have any questions about statements, please contact your Advisor.”

In fairness, there was a full, easy-to-find explanation on the company’s website. It was easy to find, at least, for those account holders with website access who remembered their login names and passwords. Everyone else who had questions apparently picked up the phone. When my assistant called the company on behalf of some of our clients, the lines were so busy that it was two days before she could get through.

Perhaps TD Ameritrade’s account-management software wouldn’t allow putting a highlighted explanation on the front page of the statements. And printing an extra cover letter and sending it with all the statements would have been expensive. Still, the cost of providing an attention-getting, clear explanation would have saved thousands of clients from momentary panic. It also would have saved the company—as well as financial planners all over the country—the time spent answering all those client phone calls.

Doing a poor job of customer service can be extremely expensive in the long run. There are significant tangible costs; it takes a lot of staff time to respond to thousands of phone calls from confused or irate customers. The intangible costs in terms of lost trust can be even more damaging.

One of the many decisions businesses need to make is how to balance customer service with administrative costs and convenience. Obviously, there is a limit to the amount of “hand-holding” a business can provide and still keep costs at a reasonable level. Those costs, of course, are ultimately paid by customers, so it makes sense as a customer or client to keep yourself informed and not demand unrealistic levels of service.

One might argue that those who received zero-balance statements should have read them more carefully to find the explanation. Still, people tend to be a bit sensitive when it comes to issues related to the security of their life savings. When you open a statement and read that your money seems to have disappeared, picking up the phone is an understandable response.

One component of customer service means accepting that the responsibility for clear communication belongs primarily to the business, not the customer. For those of us who are dedicated number-crunchers, it may even mean accepting the reality that very few people read the fine print on page five.

In May, Rick attended the 26th annual Financial Planning Association Retreat, where the top 1% of the nation’s financial planners gather to hone their skills. At least, that’s the story Rick tells. He’s just never told us exactly which skills he’s honing.

We’ve received some candid photos from an unnamed source that may provide some clues. According to our unnamed source, FPA’s president outed Rick in the final session, saying, “One of our first time attendees was watching Rick Kahler fill bottles with a sponge and said, ‘So this is the FPA’s best and brightest?’”

Look at the photos. Then you decide.

Ever wondered what “middle of the road” looks like? Well, here it is. You may be wondering what photographer Johnny Sundby and Rick, fully equipped with Blackberry and computer, were doing sitting in the middle of a highway in the Badlands National Park.

Even though we all know Rick and his Blackberry are inseparable, he hadn’t gone crazy. Rick was doing a photo shoot for Bloomberg’s Wealth Manager magazine, a professional publication read by investment advisors nationwide.

The magazine will feature Rick and several other planners from rural areas in a feature that finds planners from small, rural areas can make an impact, not only in their communities, but on a national stage, too. Look for the article in the July or August edition.

“The only real downside to the experience,” says Rick, “was having to keep one ear tuned to the sound of an approaching vehicle and jump up in time so as to not become roadkill!” Look for the story in the July or August edition.

Make no mistake, Rick enjoys the many aspects of his life, and balancing his time between family, KFG clients, and speaking engagements is a challenge.

Rick’s recent speaking tour was a study in efficient time use. Friday afternoon he spoke to the South Dakota Retailers Association in Rapid City and then was off that evening to Nashville, TN, where he spent the next three days co-facilitating Onsite’s Healing Money Issues workshop with his colleague and co-author Dr. Ted Klontz. Back on a plane Monday night, he was off to Sioux Falls, SD, where he spoke to the annual convention of the SD/ND Bankers Association on Tuesday morning. After his speech, Rick had a quick lunch with the Sioux Falls promotors of a new statewide initiative to require muncipalities to bid bond issues. Then he headed back home, just a bit exhausted. Northwest kept their 64% on-time record fully intact, as two out of every three flights were late, but fortunately no overnight stays were needed.

Menu Foods made headlines earlier this year with its nationwide recall of pet food contaminated with melamine, which is particularly lethal to cats. My initial reaction to the news was an impulse to go pick up some of the offending cat food before it disappeared from the shelves. (Before I get nasty emails from offended cat-lovers, let me hasten to add that it was just a passing thought.)

The source of my momentary urge toward cat assassination goes back some 13 years. It was then I fell in love and married my wife, Marcia, who brought many wonderful things into my life. She also brought her two cats.

As a lifelong dog owner, I had never experienced living with a cat. Since I was petless at the time Marcia and I married, I thought cats might be a welcome change. They seemed like the perfect low-maintenance pets for two childless travel buffs. Wrong. I changed my mind after more than $10,000 in ruined carpets and many nighttime bathroom trips where trying to avoid regurgitated hairballs resembled tip-toeing through a minefield. I acquired a reasonable dislike for cats.

We eventually banished the guilty kitty to Marcia’s family in Texas, where legend has it she lived out her remaining years as an outdoor cat and met her demise at the hand of a hungry raccoon. For five years, I managed to keep our cat population down to one. Since my wife has clandestinely inculcated the love of cats into our children, however, a new little feline terrorist joined the family last year. Hence my wistful, if fleeting, thoughts about contaminated pet food.

Actually, of course, the contamination was anything but funny. Authorities estimate that thousands of cats were killed by the bad food. The lawsuits are next. This raises an interesting question as to what legal rights a pet owner has in suing over the death of a pet.

The answer varies, depending on your particular state. It is fairly rare that a court will award damages for emotional distress and loss of companionship for the death of a pet. However, such judgments are not completely foreign. A recent Wall Street Journal article gave several examples of judgments as high as $50,000.

When damages are awarded, in most cases they are limited to the replacement cost of the pet. These can vary widely, ranging from tens of thousands of dollars for a barrel racing horse to the cost of an adoption fee from the humane society for a tomcat. In the majority of cases, the court costs and legal fees will typically nullify any economic benefit of obtaining a judgment. While some type of class action suit may stem from the recent melamine incident, the winners will undoubtedly be the lawyers. Outside of bringing suit in small claims court, suing over the loss of a pet doesn’t seem to be a good economic decision.

Which brings me to pet insurance. Yes, indeed, there is such a thing. As veterinary medicine becomes more sophisticated and pet owners demand more complex treatments, pet health insurance is becoming more and more common. Many policies also provide for replacement costs if a pet dies of an unexpected illness or in an accident. Some also cover liability in case a pet injures someone else or damages property.

Before you consider buying any kind of pet insurance, do your research. The Internet is a good place to start. Whether pet insurance makes sense for you depends upon the value you place on your pet.

And what is the value of a cat, in my opinion? It’s probably wiser not to ask.

Join Rick’s guest, Stacey Tisdale, a financial reporter for CBS, for a unique perspective into her view of financial planning.

After more than 15 years of reporting on the ways in which people manage and struggle with their finances, Stacey came across the most significant finding of her career. She discovered Integrated Financial Planning – an expansion of traditional financial planning that combines the “exterior” factors of money (IRA’s, investments, budgets, wills, etc.) with the “interior” aspects of money (what a person thinks, feels, and believes about it).

As a reporter, Ms. Tisdale got to see first hand how Integrated Financial Planning helped people transform their lives. She has devoted years to getting the real story on why an integrated approach to financial planning works. She and co-author Paula Boyer Kennedy report her findings in a new book, The True Cost of Happiness: The Real Story Behind Managing Your Money (John Wiley & Sons, 2007).

Ms. Tisdale currently reports for the business news division of CBS News. In addition, she reports for “The American Consumer,” a weekly, nationally syndicated show on PBS, and she has recently been named as the U.S. Contributor for Shattered, a magazine for women. From 2002 to 2004, she reported for all of the CNN networks, filing business and consumer reports for CNN, Headline News and Marketsource, CNN’s affiliate service. During this period, she also reported for a nationally syndicated program created by BusinessWeek TV called “Money Talks.” Ms. Tisdale has appeared on “The Oprah Winfrey Show” as an expert on the financial issues facing women. Her experience also includes hosting and anchoring on “Tech Live,” TechTV’s daily news program. Ms. Tisdale was also a business correspondent for CBS MarketWatch, The Early Show, CBS Evening News, and CBS Radio in the late 90’s.

Click here to register for “The True Cost of Happiness” and join us on June 28 at 4:00 p.m. MDT.

When it comes to retirement, often what many people expect doesn’t turn out to be reality. Take the case of what you think you’ll be spending when you retire.

A recent survey on retirement spending done by Fidelity Research Institute shows that many retiring Americans don’t have a very good grasp on how much money it will take to enjoy their golden years.

The participants, surveyed both prior to and after retirement, were asked to estimate how much they expected to spend in retirement. Before retiring, 48% expected their expenses to decline from pre-retirement levels. Another third expected expenses to remain about the same. Only 18% expected any increase whatsoever in expenses.

That was the expectation. The reality was a bit different.

After retirement, expenses actually increased for 39% of retirees, double the number who expected an increase. While 48% expected expenses to decrease, only 33% found that they did. Only those expecting expenses to stay the same were close to being right; 28% found that to be the case.

To maintain your current lifestyle, you will need to have saved about 25 times your annual spending as of your date of retirement. Unfortunately, only 44% of all baby boomers are saving ANYTHING. About 56% spend every nickel they make, or more than they make. That’s scary, but that’s not all. Of those 44% actually saving for retirement, as of 2005, the average retirement nest egg was $50,000 and the median savings was $2,000. No, that’s not a typo. (These statistics are taken from an article, “Comparing the Retirement Savings of the Baby Boomers and Other Cohorts,” by Sharon A. DeVaney and Sophia T. Chiremba, published at the U.S. Bureau of Labor Statistics website at www.bls.gov.)

Let’s assume the average baby boomer couple spends $50,000 a year to support their lifestyle. Assuming they will get Social Security of $10,000, they need to find an additional $40,000 a year. That means they need $1,000,000 in retirement saving to have a 90% or better probability of funding their retirement without running out of cash.

When you consider that the average baby boomer born between 1946 and 1955 has $147,000 (using data from the Federal Reserve Board’s Survey of Consumer Finances, as reported by AARP in 2004), the picture gets pretty bleak.

Hopefully, you aren’t average. Hopefully you’ve saved 10% to 20% out of every paycheck you’ve ever received, fully funded your employers’ retirement plans, and made sound investment choices. And hopefully, your retirement expectations are a reflection of reality.

What if you are only average, but you want to do better? Where can you get some help? My recommendation is to find a Certified Financial Planner (CFP®) who will guarantee, in writing, that you are a client, not a customer. This means they have a legal obligation to put your interests first and there is a good probability their source of income is only from client fees and that they do not sell anything. Two online sources of fee-only planners are http://www.myfinancialadvice.com and http://www.garrettplanningnetwork.com. Or check your local yellow pages for financial planners or investment advisors and look for the words “fee-only.”

My second recommendation is that you take to heart the findings of the Fidelity survey. Retirement will probably cost more than we think. When the majority of us retire, our current living expenses will remain the same or increase. That is different from the picture most of us have painted for our golden years. As one of my clients says about those years, “They call them golden because you’d better have a lot of gold.”

One of the services most requested from a financial planner is helping clients determine how much they need to save in order to retire comfortably.

The biggest obstacle to anticipating retirement needs is the unexpected. Unanticipated changes in portfolio returns, significant health problems, unexpectedly high inflation, longevity, the economy plunging into a multi-year recession, or other variables can greatly affect someone’s retirement nest egg. The best a planner can do is to try and take such unexpected events into consideration.

Accordingly, I like to err on the conservative side of expectations when planning for retirement. I have always assumed most planners would. I would much rather tell retired clients they can spend more than we anticipated, rather than less.

That assumption was challenged this week by one of my software providers. I was obtaining some additional training on my retirement needs analysis software. Many years ago I stopped using this company’s portfolio models because I felt they were too optimistic. For example, their most aggressive portfolio (80% stocks) estimates a 14% annual return, while their most conservative portfolio (20% stocks) estimates a 9% return. I am not so sanguine about future returns. I estimate my most aggressive portfolio at 7.5% and my most conservative at 6%.

Now, you don’t need to be a rocket scientist, or an investment advisor for that matter, to figure out that you can live far more lavishly on a 14% return than a 7% return. If a portfolio with a 7% return will kick out $30,000 a year, adjusted for inflation, a 14% return will net $100,000 a year, adjusted for inflation. That is a considerable difference. If clients plan their retirement lifestyle based on a 14% return, and the investment advisor is wrong and they earn 7% instead, the result is an unhappy surprise.

For that reason, I use my own estimates instead of the pre-packed assumptions that come with these sophisticated software programs. When I told the trainer that, he got surprisingly belligerent. He claimed I was not serving my clients well because they were spending less than they actually could, thereby sacrificing more than necessary in lifestyle.

The expected returns projected by the software company are based on the past history of the capital markets. They expect the future to look the same as the past. In my book, the past 35 years have been incredibly good times for the economy. I don’t want to base my retirement, or my clients’ retirement, on the assumption that the good times will continue.

The trainer and I parted, agreeing to disagree, but I was left with the distinct impression that I was unusual in disagreeing with this company’s portfolio assumptions. Apparently few of the thousand of advisors question the software projections they use to assure clients that their retirement years are safe. This is a bit troubling to me, and it should be to you.

When your advisor gives you a retirement projection, it would be wise for you to ask a few questions about the variables used to create that projection. Here is a short list of the more important variables you need to question:

• The inflation rate

• The rate of return on your investments

• The estimated date of death

• The income tax assumptions

• Investment advice and management costs.

Even the smallest variations in any of these variables can make a huge difference in how much you can spend in retirement. Questioning them can help you understand whether your investment advisor is overly optimistic. Optimism may be a great way to approach life, but it’s not such a great way to approach retirement planning.