4. RESEARCHER AT THE US FOOD AND DRUG ADMINISTRATION

Economic Status: This 43-year-old man has worked at the FDA for 15 years. He makes $82,000 a year, has saved $130,000 in a government retirement plan and has more than $3,000 in checking and savings accounts. His wife is a stay-at-home mother to their two children - ages seven and three.

Financial Considerations: Planning for retirement, saving for college education, and paying all of the bills, as the sole breadwinner.

Goals: Focus on retirement first, says Linda Stratton of Stratton Advisors in Arizona. There are student loans and other assistance plans to help students with college tuition, she says, but "there's no program to help you pay for retirement." He can retire with more than one million dollars in 20 years, says Stratton by maximizing contributions to his Thrift Savings Plan (TSP), the federal employee's 401(k). Put about $4,000 a year into low-cost Roth IRA as part of his retirement savings and plan for worst case scenarios.

The Plan: Bolster liquid assets, and build savings from about $3,000 to around $8,000, says Stratton. "With only a little over $3,000 in liquid assets," she says, "he doesn't have much room to cover his mortgage payment if something goes wrong." Contribute 10% of salary ($700 a month) to the TSP. The TSP gives government employees many options. Stratton suggests the 2030 lifecycle fund, which automatically diversifies his TSP savings among the plan's five different flavors of investment funds - government securities, fixed income index, common stock index, small capitalization stock index, and international stock index - until his retirement. The plan reshuffles his portfolio in an increasingly conservative manner as his retirement approaches. "I would recommend he watches his budget and make sure he focuses on retirement even if it means doing some tighter budgeting in the next couple of years."

The Bottom Line: Maximize contributions to your TSP retirement fund and maintain portfolio diversification concurrent with your age and closeness to retirement. Secure a retirement plan first, then think about saving for college.