Life insurance may seem unnecessary if your children have graduated from college, your house has been paid off, and you’re preparing to retire (or have already done so). You may believe that your retirement funds and Social Security benefits will cover your financial needs in the years to come.
Many empty-nesters and retirees cannot purchase or retain the life insurance coverage they need because of these misunderstandings. If any of these four misconceptions apply to you, it’s time to reevaluate your assumptions.
Myth #1: I don’t need life insurance after my children are financially independent and my mortgage is paid off.
If you died today, however, your spouse would still have to deal with the costs of everyday existence. Isn’t it possible that your spouse may survive to see you grow old? Would your spouse be able to sustain the standard of living you’ve both worked so hard to acquire if you died unexpectedly?
Myth #2: I’ll leave my children and grandkids a legacy of money saved up by the time of my death.
There is a chance that you can achieve this goal if you work long hours and are careful with the money you earn for your family. That being said, there is a chance that you may not live long enough to accomplish your financial goals.
Furthermore, what if the economy goes into a prolonged slump and you lose money on your investments? When you die, the proceeds from your life insurance policy can be used to benefit a charitable cause or leave a legacy for future generations.
Myth #3: I believed I’d need life insurance to cover inheritance taxes, but that’s no longer an issue.
Even if you don’t owe federal estate taxes right now, this doesn’t mean you won’t get them in the future. Tax rules are subject to rapid evolution – and even if they don’t, there are many good reasons to keep your life insurance policy in force as you age.
Paying for items like state estate taxes, debt, probate charges, and burial preparations can be covered by life insurance, letting your loved ones grieve unburdened by financial worries. Equalizing an estate among your heirs or the succession of a firm can also be accomplished via this tool.
Myth #4: It is too expensive for me to obtain life insurance as I age.
The fact that life insurance costs more as you get older does not indicate that you cannot afford it. For example, a 55-year-old individual in good health who does not smoke can pay around $1,600 a year for a 20-year, $500,000 level-term coverage.
A healthy 55-year-old woman should expect to pay around $1,200 yearly for her prescriptions. As a result, if you require coverage regularly, you should not assume that you cannot afford it.
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For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.
Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claims‐paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.