Insure Your Retirement
One of the most underrated and often ignored pieces of a retirement plan is Life Insurance. Life Insurance is an important tool for retirement planning because it can help protect wealth and replace income in the event of an early death. Yet, most retirees have either minimal or no life insurance and most working individuals only carry insurance through their employer. The down side to only having employer coverage, is that once you leave the workforce your insurance either ends or the price increases substantially without the employer subsidizing the cost. Planning ahead can save you money down the road and prevent any lapses in protection.
With most people only carrying life insurance through their employer, an often overlooked area is when one spouse works while the other stays at home. Life insurance should not only be limited to the income-generating or working spouse. A non-working spouse may contribute a great deal around the home. For instance, the non-working spouse could be the primary caretaker of children or an elderly parent and perform a variety of other critical functions that would greatly increase the costs to the working spouse if the non-working spouse predeceased them.
How much insurance do I need?
The amount of life insurance required will depend on a number of factors including income replacement, funeral expenses, mortgage and other outstanding debts, college funding, and retirement planning.
When planning for the amount of life insurance protection needed to replace income, it may be best to make a conservative assumption that the surviving spouse would not go back into the workforce. Household spending typically does not drop significantly, if at all, after the loss of one spouse and taxes typically increase. This is an important consideration when determining the necessary amount of life insurance. Another factor to consider is making sure you choose the appropriate type and term of insurance. The appropriate term for the insurance should generally match the length of your insurance need.
There are countless benefits and uses for life insurance, whether it’s providing a legacy to your loved ones, providing for a spouse, college funding, or tax free retirement income. Determining what type, term, and coverage amount can seem like a daunting task, but delaying can cost you. Seek the help of a qualified professional to help you in making these difficult decisions.
“Fun is like life insurance; the older you get, the more it costs.”
Financial Planning and Investment Advisory services are offered through Prosperity Capital Advisors (PCA) an SEC registered investment adviser with its principal place of business in the State of Ohio. Brandon Williams is registered as an Investment Advisor Representative of PCA in the state(s) of South Carolina. For more information about PCA, please visit www.adviserinfo.sec.gov to obtain a copy of Form ADV Part 2. PCA does not provide tax or legal advice.
The information contained herein should not be construed as personalized investment advice. Past performance is not necessarily indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment, model, or strategy (including the investments, models, strategies recommended or undertaken by PCA) made directly or indirectly through this communication, will be profitable or equal any performance level referenced directly or indirectly. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will either be suitable or profitable for a client’s or prospective client’s investment portfolio. Information presented herein is subject to change.