A second opinion on how Life Insurance will fit in your retirement plan.

The way Americans look at their retirement has changed considerably since 2020.  Many begin to wonder if they should retire early without having planned it, others are taking early withdrawals from retirement accounts like 401(k)s and IRAs.  There is even some who postponed their retirement plans.

Regardless of your financial situation, this year the principles of retirement apply as they always do: make conservative decisions about retirement savings and Social Security, cut expenses, and continue to earn income if you can.

Whether your Retirement Plan looks secure or not, now is a good time to check its status.

Rebalance and make an inventory for your Retirement Plan.

Check your investments: Make sure your current investments are favorable with your long-term investment goals and risk tolerance.

Deal with your debt immediately: If you are still working, now is the best time to pay off debt.

Check if your financial generosity priorities have changed: Due to marriage, divorce, having children or grandchildren?

Consider your insurance policies: Confirm that you still have the beneficiaries you want and need on your list.

Speaking of insurance policies, more than half of American workers have life insurance through work. Once you stop working, you may no longer have access to that employer benefit.  It’s also true that not all retirees need life insurance, but if you want or need a policy, it’s worth considering your options.

It is very likely and convenient to include your Life Insurance within the budget of your Retirement Plan, keep in mind that once you begin using the  benefits as a retiree, you will have to overcome a learning curve of how to live with a fixed monthly income.  Taking this into account, you should already have in mind that beyond wanting this becomes a necessity.

Some key questions could arise that you should discuss with your insurance advisor.

Is your coverage still current in today’s economy?

It is important to know what portion of your income your family would need to replace and for how long.

Do you have any debts that would be a load on your family?

Debt is a financial loop around your neck, working toward paying down what you owe is key.

Should you build an Emergency Savings Fund?

Keeping a buffer of cash that you might get only for true emergencies can help you stay current when unexpected costs come along.  With some savings, you are less likely to have to rely on credit cards or loans.

Does your Life Insurance offer a large enough death benefit?

Have that in mind for upcoming goals that your family may need to meet, such as your children’s education.

Knowing these facts, we can suggest that one of the best ways to prepare for retirement is also to think about buying Life Insurance, even more so when only half of Americans have calculated how much they need to save for retirement. In 2020, more than a quarter of private sector workers with access to a defined contribution plan (such as a 401(k) plan) did not participate. 1

How you plan today will determine how your family lives tomorrow.

To put things in a little more perspective, it’s a good idea to review the Life Insurance planning stages, as when it comes to it, your needs may differ depending on where you are in your personal and professional life at any given time.

Just Married!

This association means that you depend on each other both emotionally and financially.  Make sure you both have enough life insurance to cover the loss of your financial contributions if one of you passes unexpectedly.

New home

It is a big step and a big financial responsibility. Do you have a plan to cover the cost of the mortgage if something happens to you or your spouse?  What about other expenses like maintenance, utilities, unexpected repairs, and property taxes? A well-thought-out life insurance plan would allow you to keep the house you bought together.

Planning a family?

Financial responsibility comes even before the baby! Life insurance will be the most important purchase you make to secure your child’s financial future.

Raising children

The cost of raising a child from birth to 18 years old is now more than $240,000. Life insurance will help protect your children’s financial future.

So you might be asking yourself, how much Life Insurance do I need?

By now you already know that financial security does not happen by itself, it takes planning, commitment, and money.  To calculate how much would be enough, estimate your anticipated expenses and your family’s future needs.  Such as:

  • Household expenses
  • Living expenses including mortgage or rent
  • Educational expenses
  • Emergency needs
  • Outstanding debts
  • Taxes
  • Funeral expenses

How can you get Life Insurance quickly?

Taking out Term Life Insurance for your family used to be an arduous, inconvenient ordeal.  It required you to submit to a medical exam, give a blood sample and then wait at least 30 days and up to three months for  approval.

You can go to https://www.aafpins.com/2021/06/can-get-life-insurance-quickly/ for more information about:

  • No Medical Exam Application Process
  • Accelerated underwriting
  • Simplified issue
  • Automated underwriting
  • Speed and convenience
  • Portability

Bottom line, even if you feel financially secure for retirement, your assets may need to last for many more years.  Depending on your health care costs and lifestyle, you may end up spending a large portion of your savings and investments.  Although you will not have to worry about your expenses after you die, your spouse, adult children, and grandchildren will, especially if they depend on you financially.




Contact Information

AAFP Insurance Services
Attn: Policyholder Services
PO Box 7470
Leawood, KS 66207-0470

(800) 325-8166

Email Us

Hours of Operation

Monday through Friday
8:30 AM – 4:30 PM Central Time

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