There are all sorts of expenses to consider as you enter retirement. After having a steady paycheck for decades, you will have to live on a fixed – and reduced – income when you finally separate from the workplace. For many, understanding which expenses are necessary and which ones can be set aside is a tough decision. Whether it’s cable TV or retirement insurance for seniors, “How important is it, really?” will get asked a lot as your final day on the job nears. Some retirees will come to the end of term or whole life policies right before or just after leaving work behind. Though coming up with the answers can be a challenge, there are a few things to consider in order to make your final determination:
What is paid off?
The security provided by your life insurance policy is generally tied to those assets which will put the greatest burden on your family in the event of your passing. In most cases, this means a mortgage or car payments – do you have balances on loans like those? If so, having some coverage lined up is probably a good idea. Otherwise, you might be able to get by without it.
Who is counting on me?
To many, the idea of setting up a monetary protection for loved ones remains an attractive proposition. This goes far beyond paying off any debts you and your spouse might have, it allows you to put loved ones on solid ground for years or ensure your grandchildren will be able to attend college – both of which are admirable goals. Though it will require necessary notation in your will, having family or a favorite charity as beneficiaries will give you a tangible legacy beyond the affect you have on their lives as a person.
Are there financial incentives?
It may sound like an odd question, but some whole life insurance plans are structured to act as an annuity. This cash value, which accrues over time, can be drawn on or borrowed against in the event of medical emergencies or unforeseen home repairs. Some couples use these as an additional form of retirement planning beyond the stock market. If you are looking for a more stable investment as part of your portfolio, this might be one way to achieve that.
Can I afford it?
Ultimately, this may be the most important question you have to answer, but it’s last for a reason. As you consider cutting costs in order to fit your new, career-free lifestyle, the amount of money you have on hand from month-to-month can be a powerful motivator to just slash what seems unnecessary. With life insurance, however, you lose track of how crucial it is until you actually have to use it. This is why it’s important to look at cost last. Sit down with your accountant or financial planner and go over your options. A trusted professional will have insights into your goals, as well as how to make everything mesh together to the greatest benefit of you and your family.