You’ve probably been saving for retirement for much of your career. If you’re like most other workers, you’ve likely been contributing to your 401(k) and possibly even an IRA. That disciplined savings effort should serve you well after you retire. However, even the most carefully planned retirements can become undone by just one catastrophic event. Unfortunately, it only takes one major life change to alter the course of your financial future. Are you exposed to major risks that could sink your retirement? If so, now may be the time to reassess your risk management strategies and possibly implement new solutions. Below are three sizable, but common, risks that could pose a serious threat to your financial stability and your retirement:
Unexpected Death Obviously, death will impact your ability to retire, but it could also hurt your spouse’s financial future. Many people assume that once your children are out of the house, you no longer have a need for life insurance. However, that’s often not a correct assumption. If you pass away before retiring, your spouse may miss out on any future retirement contributions you would have made. Your spouse may also be left with financial obligations such as debt, mortgage payments and more. If he or she doesn’t have the resources to pay those bills, they may have to drain the retirement assets. Make sure both you and your spouse are protected against each other’s potential premature death. Term insurance is often an affordable way to protect against such risks. Permanent insurance, though, may offer opportunities to accumulate cash that you can use to fund other needs in the future. A financial professional can help you decide which is right for you. Disability Think the odds of becoming disabled are low? Think again. According to the Council for Disability Awareness, 1 in 4 adults will become disabled before they retire.1 Disability can have a big impact on your ability to retire. If you are disabled to the point that you can no longer work, you’ll lose out on the ability to save for retirement. Even more problematic, you may need to draw down your savings to fund your lifestyle and your medical costs. Fortunately, you can easily manage this risk with disability insurance. Many policies offer options to receive benefits up to age 65. That way, if you become disabled, you can receive benefits up until you’re old enough for Social Security. Many workers believe that they’re covered by their employer’s disability plan. However, group coverage can have limitations on the benefits. For instance, the benefits may not pay up to age 65. Or the plan may be “any occupation,” meaning the only way you qualify for benefits is if you’re so disabled that you can’t work in any occupation. Review your group plan. You may find that an individual policy can provide better protection. Long-Term Care According to the U.S. Department of Health and Human Services, today’s 65-year-olds have a 70 percent chance of needing long-term care at some point in their lives.2 As you might imagine, that care can be costly, especially if it’s needed over several years, which is often the case. Without coverage in place, you could drain your retirement assets paying for care. Many retirees assume that Medicare covers long-term care, but that’s usually not the case. Medicaid provides some coverage, but you must have few assets and little income to qualify. Other possible options include long-term care insurance, in which you pay premiums today for benefits and protection in the future. You also may want to talk to your children and loved ones to see how they can provide support if you ever need extended assistance. Are you adequately protected against these types of risks? If you’re not sure, let’s talk about it. Contact us today at J. Harris Financial. We can help you analyze your risk exposure and develop a protection strategy. Let’s connect soon. 1http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp 2http://longtermcare.gov/the-basics/who-needs-care/ This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 16111 - 2016/9/20
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