Income for life: Dawn Greene needs a plan to help her live beyond her injuries. (Investment Strategies).

In 1997, former magazine editor Dawn Greene, 48, turned her worst nightmare into an opportunity. Although doctors only gave her a 30% chance of survival from a botched fibroid surgery, after a six-month-long hospital stay--three months in a coma--she emerged determined to reclaim her health while securing her financial well-being.

After withdrawing all the money that she amassed through her former employer's 401(k) and profit-sharing plans to pay for living expenses, Greene, who has two college-aged children, realized that she needed financial guidance to safeguard approximately $400,000 (part of the judgment she was awarded from a medical malpractice suit) she decided to invest. "I wanted to preserve my capital because I didn't know how long I would be able to physically work after the accident," she says. "Also, I wanted to invest for my children so that when I leave this world, they will be provided for."

Working with Merrill Lynch Financial Advisor William Betts in New York City, Greene is taking gradual steps to regain solid financial footing, even as she slowly relearns basic physical functions and adjusts to her limitations. "Dawn came to me not understanding the ins and outs of investing," explains Betts, who fashions a conservative investment philosophy emphasizing asset allocation, wealth preservation, and retirement/estate planning for his clients. Greene's portfolio consists of 45% fixed income, 30% equity, and 25% cash, using a laddered investment model that invests heavily in Certificates of Deposit (CDs) that mature at different times.

"When each CD matures she has the option of renewing the same CD or allocating the funds elsewhere," Betts explains. The CDs in Greene's portfolio provide an average yield of 2.87%. "The portfolio will provide her with income while ensuring that she can cash out if she needs to," he says.

The fixed-income portion of Greene's portfolio contains CDs worth $25,000 each from such institutions as Banco Popular, Coral Capital, MBNA American Bank, and ETrade Bank. The equity portion is invested in two new Merrill Lynch mutual funds: the Fundamental Growth Principal Protected fund (MCPUX) and the Basic Value Principal Protected fund (MCPVX), both of which are backed by a payout guarantee for extra asset protection. "The Merrill Lynch Protected fund is guaranteed by Bank of America and is great for people who want to invest for the long-term," says Betts. "Investors keep their cash in the fund for seven years and at the end of that period, they get back the principal plus appreciation accrued. If you invest in other mutual funds, there is no guarantee and you can lose money."

While Betts cautions this strategy is not for everyone, he says it works for Greene because of her risk-averse personality and the need to safeguard her portfolio, as it may be the only funds she'll have to retire. Because of market volatility, Betts believes it is prudent to keep 25% of Greene's portfolio in cash in a money market fund. He has also discussed the importance of establishing a healthcare proxy, which spells out her wishes if her health fails and completes the estate-planning portion of her financial plan.

As a final note, "I've referred her to an attorney for her taxes," Betts says. With her financial plan in order and her medical recovery on track to allow her to contemplate returning to work part-time, Greene is in a good position to have income to live on while she strives to reach her future goals.