'We'll Pull Through'

Sitting in her darkened Bronx apartment, watching a video of her missing father salsa dancing, Michelle Nieves is grieving--and thinking about money. Her father, Juan Nieves, a 56-year-old Puerto Rican immigrant, worked as a salad maker at Windows on the World and was the sole provider for her mother and younger sister. When he died in the Sept. 11 attack on the World Trade Center, "we went from having something to having nothing," says Michelle, 23. Juan had just $15,000 in union life insurance; the family's medical benefits could expire as early as next month. He leaves an ill wife who's never held a job, $7,600 in savings and a beloved 1968 Mustang that the family may have to sell. Two adult Nieves children, Michelle and John, 25, who had their own apartments, may be forced to move back into their mother's two-bedroom, $521-a-month rental with their two younger siblings. Christine, 15, is already looking for a part-time job to help out. And the older siblings will dip into their own salaries to help pay the family's expenses.

So far the Nieveses have received just $725 in aid from New York's Crime Victims Board, part of which they used to pay their mom's $66 phone bill and $117 electric bill. They're trying to find other programs that might help. Navigating that bureaucratic maze "is like being in a room with the lights off," says John. "You know there are things in the room, but you don't know where they are." Michelle can't help feeling resentful of the overflowing aid for firefighters' families. "I know they died rescuing people--I understand that," Michelle says. "But they died doing their job," just as her dad did. As for the family's financial future, she says, "Everything is a giant question mark."

Grieving dominates life in the weeks after a tragedy. But slowly, survivors are beginning to contemplate the financial worries that lie ahead. Many of the dead were their family's primary breadwinner. Thousands left behind small children and years of obligations for orthodontist bills and college tuitions. It's difficult to say how many families face futures as perilous as the Nieveses'. The damaged buildings (including the Pentagon) housed mostly white-collar workers, but the list of the missing include dozens of lower-paid employees: at least 79 restaurant workers, 20 electrical workers, 15 carpenters, 5 painters and 26 security guards, elevator operators, janitors and window washers. There could be dozens more undocumented workers. But even more-affluent families' finances will be tested in the aftermath of the disaster--and it's a challenge that will continue long after round-the-clock cable coverage ends. "The financial hardships that hit these families don't make the news," says Trish Goodman, an Edmond, Okla., adviser who helped survivors from the 1995 Oklahoma City bombing rebuild their budgets. "They're left to deal with that on their own."

In fact, many of the survivors' economic futures may be less dire than they now imagine. The vast majority of the victims were professionals killed on the job while working at big companies. That means they're far more likely than most Americans to have access to life insurance, Social Security and Worker Compensation. There's also been an unprecedented outpouring of charity--$700 million and counting--much of it destined for victims' families (sidebar). And lawyers are already signing up families, either to file lawsuits or to claim settlements from a fund set up by Congress; many awards, based largely on victims' future earning potential, could measure in the millions. Yet while those resources will likely give most survivors at least something of a long-term safety net, many still face a short-term budget crunch. "These families have not received paychecks, they're out of money and they're having immediate problems," says Manhattan attorney Lee Kreindler.

So far the New York obituary pages are mostly filled with traders, accountants and other executives--people who probably lived much like Stephen Hoffman, 36, a Cantor Fitzgerald bond broker who worked on the 104th floor of the North Tower. In the days after Sept. 11 his widow, Gabrielle, 40, struggled to decipher their finances. Among the most pressing issues: their $3,000-a-month mortgage was due, but their checkbook and the mortgage statement were in Stephen's missing briefcase, and she had no idea what their bank balance was. But with help from her lawyer, she's realizing how she'll benefit from fortuitous decisions Stephen made before his death. The family's Long Beach home in New York's Long Island is small, she says, and she'd wanted to move to something bigger. But Stephen, who was sharing his passions for surfing and golf with their daughter, Madeline, 5, loved its location seven blocks from the ocean. Now Gabrielle is thankful he talked her out of taking on a bigger mortgage. "He was not a materialistic man," she says. "He'd say, 'Be happy where we're at; it's about living, not what you have'."

She'll also benefit from her husband's decision to increase his life insurance. She fought the move--"Why the hell do we need that?" she wondered--but he insisted, ordering a term policy he found at Selectquote.com just six months ago. Including his $100,000 policy from work, he carried slightly less than $1 million in coverage. Even with $400 a week in Worker Compensation and $1,300 a month in Social Security benefits, the insurance won't replace Stephen's entire $130,000 annual income (including his bonus). But Gabrielle's teaching salary remains intact, and she'll probably rent out her home's first-floor apartment, allowing her to keep the house and continue making payments on their $500-a-month Volvo. Friends have already established a memorial fund to help pay for Madeline's education, and even the florist and the bagpiper refused to take money for Stephen's memorial service. "I've never seen such kindness and graciousness," Gabrielle says.

For some families, it's still too early to tally up insurance and benefits. In an interview early last week, the wife of one Brooklyn, N.Y., firefighter was hoping for a miracle. "He's just missing, and we still have hope," she said. (Later, after visiting the World Trade Center site, she became grief-stricken and asked that her name not be used.) Like so many bereft families, she's received a flow of prepared meals, groceries, cash and support from friends. Assuming her husband was killed in the collapse, her family will have access to a generous safety net, receiving his full salary and union benefits. "We're the least affected financially," she says. Observers who've watched the lives of the Oklahoma City bombing survivors unfold say the families of federal employees generally fared better financially than other victims; in this tragedy Pentagon and city rescue workers may have the most secure futures.

Other workers' families are likely to be more dependent on individually purchased life insurance. It's impossible to know how much protection the average victim carried, but national statistics aren't that encouraging. The percentage of U.S. households owning life insurance has been declining for years, from 83 percent in 1960 to 76 percent in 1998, according to LIMRA, an insurance research group. No one knows exactly why, though some speculate that as Americans have invested more money in stocks, they're devoting less to insurance. Among those who have coverage, the average death benefit of $196,200 may sound like a lot, but consider: invested in 10-year Treasury bonds, it would replace less than $9,000 in lost income a year. And not every family will invest the money well. "It's not unusual to find a distinct aversion to even thinking about this money, kind of a denial factor," says Eleanor Blayney, a McLean, Va., financial planner.

John Creamer doesn't have the luxury of denial. His wife, Tara, 30, a planning manager at TJX, perished on American Airlines Flight 11, leaving two children, Colin, 4, and Nora, 15 months. John, 30, a burly, goateed former captain of the University of Massachusetts football team, is a high-school teacher in Worcester, Mass., and earned less than his wife. "We lived off a double income, and we needed it to survive," he says. John's mother, also a Worcester teacher, will take the year off to care for Nora, saving him $1,000 a month in day-care expenses. He thinks Tara's individual insurance will allow his family to keep their house, but he's been so focused on getting the kids back into a routine that he hasn't even checked into her employers' group policies. "I'm not going to be rich, but it'll lessen the financial burden of losing an income that we relied so heavily upon," he says.

To help people like Creamer manage their radically altered finances, the Financial Planning Association is urging members to work pro bono for victims' families. Some pros hope that watching thousands of families regroup from the tragedy will force the rest of us to get our act together, too. "If there's a message from this, it's to use this to inspire people to get prepared," says Goodman, the Oklahoma planner. Make sure both spouses know the basics of the family's finances, from how much life insurance they carry to where to find wills, deeds and account statements. Build up a cash cushion, useful not just after a tragic death but during an illness or layoff. And, of course, count your blessings while you have them--a lesson that no one touched by this tragedy will ever forget. "We had a great life going here," says Creamer, sitting in his kitchen and petting his beagle, Oliver, a gift from Tara on their first anniversary. "But I have faith in America. We'll pull through this as a country, and my family will take things day by day, to do what we can to make a great life for Colin and Nora." A nation wishes them Godspeed.