After a long career contributing to the economy and taking care of your family, you deserve to be able to rest while still maintaining a good quality of life. Many financial demands will follow you into retirement, meaning you must have made ample preparations for this period. It’s never too early to start planning for retirement.
How Does Retirement Insurance Provide Security?
Retirement insurance may not refer to a single type of insurance product. In many cases, insurance companies may not carry policies that equate literally to this term. Retirement insurance may refer to various policies and coverages that, when appropriately assembled and customized, can provide financial security for you, your spouse and others who may depend on you even in retirement.
Although the ideal composition of your retirement insurance portfolio may vary depending on your unique circumstances, including your needs, preferences, lifestyle, expenses and budget, acquiring and maintaining the following products may be advisable:
- Health insurance—As you age, you may be more likely to require regular medical services. Accidents and illnesses may be inevitable even if you’re in good health and commit to a responsible lifestyle. Fortunately, health insurance can ensure that you and your spouse can access essential health care without incurring extensive out-of-pocket costs. If you’re a retiree over 65, Medicare may be a desirable and affordable option.
- Life insurance—Although income replacement, one of the primary components of most life insurance policies, may be less necessary for retirees, this coverage can prove valuable for you during this period. This is because many life insurance policies also double as a form of savings, accruing cash value over time, which can be borrowed against or invested. Furthermore, while replacing your income may often be less essential in retirement, your spouse or other family members may still need financial assistance for medical expenses, funeral costs and outstanding debts in the event of your death.
- Homeowners and renters insurance—Whether you downsize your living situation in retirement or stay in the same home, maintaining adequate insurance is essential. If you lack coverage, a single accident or incident could destabilize your living situation and leave you with significant financial hardship.
Depending on circumstances, individuals planning for retirement may also want to consider retirement funds, which can help with expenses during retirement. Availability can vary, but potential plans include 401(k) accounts, individual retirement accounts (IRAs) and other savings mechanisms (e.g., bonds). Your agent can help review your situation and make recommendations in this area.
How Are Retirement Insurance Rates Determined?
Like many types of insurance, the cost of the aforementioned policies may vary significantly depending on your unique circumstances. When analyzing your needs and quoting you rates for adequate coverage, insurance companies may consider the following:
- Age(s) of insured(s)
- Number of people insured on a policy
- Type of policy
- Coverage limits
- Prior claims history
What Are Some Additional Retirement Financial Tools?
As mentioned earlier, several financial instruments may also be available to you that can help you plan for retirement, including the following:
- Social Security benefits
We’re Here to Help
Consulting with a qualified professional can make all the difference as you prepare for retirement. The dedicated staff at First Community Insurance and Annuity Center has over 30 years of experience helping families and individuals assess their circumstances and establish optimal financial plans. Contact us today to get started.