Category: Finance

Jobs For Retired People

Jobs For Retired People

Jobs For Retired People: Supplementing Your Savings to Live Your Best Life + Retire Early?

This article, “Jobs for Retired People” is the second article in our New Series: The New Rules of Retirement.

Jobs for Retired People? Doesn’t retired mean “NOT WORKING?” Maybe, but maybe not! In our Series – The New Rules of Retirement, we are exploring what it means to re-define retirement to fit your needs and lifestyle.

In our last article, we discussed how the “Average American” close to retirement age these days might not have as much saved as they would like. We also did some math to discover what amount of side income might be needed for the majority of Americans to still “retire” when they wanted to.

In our case study, the “Average American” with the most average of savings might need an extra $1,295 a month to live the lifestyle they envisioned in retirement.

Retire Early???

Some of these side gigs might even allow you to quit your job earlier than you thought possible. We have heard stories of people LOVING their side job so much, and actually making good money from it, that they were able to retire from their full-time job early.

Side or Part-Time Jobs for Retired People

The Best Side Jobs for Retired People & People Saving Extra For Retirement

This article will help you to find a fun or creative “Side Job” / “Side Hustle” / “Part-Time Work” or another source of passive income to help you retire or save more for retirement.

A few things to keep in mind:

jobs for retired people
  • First, these are jobs to supplement your retirement savings. They may or may not be HUGE money makers – often they are just a way to make some extra income.
  • Second, they are meant to also be enjoyable and creative! Yes, they are still work, but with a retirement flavor and happy attitude. Some keep you active or challenge you mentally. Others are creative, and some even keep you social!
  • Finally, you can start these jobs before you retire. Use them as a second job to give your retirement savings an extra boost. In addition, many of the passive income generating jobs take some time to develop. That means the earlier you begin them, the more you can sit back and just maintain them later.

Side Job Category One: Jobs that Keep You Active

Pet Sitter / Dog Walker

Listen, retirement is not getting any cheaper or any easier. Everyone thinks they have enough saved for retirement as they near their golden years, however, the truth of the matter is that majority of people have nowhere near enough money saved. This is likely why you’re looking for a side job in retirement. Either that, or you’re just plain bored.

Either way, becoming a pet sitter or dog walker is a great opportunity to make a little extra money. 

Sites such as Wag! or Rover make it easy to do this. You’re probably already going to a morning walk anyway, so why not bring a furry friend with you and get paid to do it. If you’re really feeling adventurous, you could let the furry friend sleep over and get paid even more.

You could earn several hundred dollars a week all by just living as you normally would, but having an awesome four-legged companion with you. (From Austin with TheLogicofMoney.com)

Handy-Person

If you are good at fixing things, there are a lot of people that are not, and they need your help. People all over need help with small house projects and light outdoor work.

Becoming a “handyman” or “handywoman” might be as simple as making some quick business cards and passing them out to everyone you know. It is a great word-of-mouth, referral business, for those with a solid network of friends, family and co-workers. If you need help finding people to help-out and are comfortable online, services like TaskRabbit, can point you towards people looking for help.

Category Two: Jobs that Keep You Social

Vacation House/Room Renter

Tom Blake, from ThisOnlineWorld, suggests Airbnb as a way to stay both active and social in retirement while making extra money. He includes this in his list of “The Best Gig Economy Jobs – Make Extra Money On The Side.”

Airbnb allows you to make your house, or a room in your house available for rent to travelers. You can make decent side-income renting your home if you live in a well traveled area.

Tom mentions Airbnb is a great way “to make use of any extra space you might have in your home (in case you haven’t downsized) as well as meet new people!” Many of our friends have great Airbnb stories from both sides of the service. It’s a unique travel culture that can provide exciting experiences to an otherwise quiet retirement.

Drive for Uber or Lyft

Uber and Lyft are good ways to make a little extra money while interacting with new people. If you are in a touristy town and like to talk up your local hot spots and events, then you will find your happiness with a driving service.

On the other hand, driving services can also work out for people that don’t like to constantly chat (or drive around tipsy people late at night). Everyone needs trips to the airport, especially in the quite early mornings. Moreover, if you really aren’t feeling social, Uber Eats allows you to drive around food instead of people.

Category Three: Jobs that Keep You Creative

Selling Crafts – Online or In-Person

Craft Fairs are still hot! If you like to craft, you can tour your state (and beyond…) selling your creations. Makers Markets, Junk Stocks, Fundraising Craft Fairs, State Fairs and Flea Markets abound and are fun for all involved.

For those of you like enjoy selling online, the popular markets include Etsy, Artfire and Bonanza. If you need help with setting up an online shop, hop onto a site like Fiverr and search for “help with etsy shop” or something similar. You will find freelancers that will help you get started!

Freelance Writer

For those of you that like to write, look into becoming a freelance writer. Online publications (and some local in print ones) are always looking for people to add valuable content to their sites for their readers. We suggest reaching out to the smaller ones you might already read first.

In addition, you can find places to write for by searching for “best sites for freelance writing” or something similar. Here is one article we found to start you off. Insert your specific area of interest to make it more relevant. For example, “best sites for music freelance writing.”

Category Four: Jobs for Retired People that Keep You Busy

Taking Surveys

If you are looking for a way to make money on the side that doesn’t take a whole lot of effort, then taking surveys is a fun way to pass your time. You can sit on the couch, listen to music or the TV, and provide your opinions to people who want them.

Popular online survey sites include Pinecone Research (which I did for a couple years and loved!), Opinion Outpost, Inbox Dollars, and the National Consumer Panel.

If you want to take this one into the “real world,” then look for paid opportunities for participating in Focus Groups and Health Studies.

Category Five: Jobs for Retired People that Keep You Challenged

Start a Blog

Oh boy, if you are up for the challenge, then try starting a blog! People actually do make money from their blogs these days – especially niche blogs. However, there is a steep technology learning curve, if you are not already very comfortable creating online.

Blogging can be a great way to generate passive income. Typically, you can make good money after years of effort, lots and lots of writing, and much search engine optimizing. If you enjoy learning and writing more about a subject you are already passionate about, then you will love blogging. On the other hand, you will also have to find learning about blogging interesting, because half of your time will be devoted to that.

Tutor or Teach

Both in person and online, tutors and teachers are in demand. If you have a field of expertise or passion for helping a certain age, then start there. This is a great business to grow by word-of-mouth if you have a decent network of friends and family to reach out to, but there are also businesses that can bring you students. Tutoring centers exist both online and in physical locations and are always looking for qualified help.

If you have graduate degrees in certain areas, you can look into teaching at your local universities and community colleges as an adjunct professor. Certain fields are always looking for people with Master’s degrees and beyond to teach both online and in person classes.

Jobs for Retired People Conclusions

jobs for retired people

There are so many opportunities to create the kind of retirement and work-life you want in our new economy. The New Rules of Retirement say you have the creative power to shape your life.

You can work and play at the same time with these part-time jobs.

We will be continually adding to this list. We would also love to hear your suggestions and what has worked well for you. Please email us or comment below.

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New Rules of Retirement

New Rules of Retirement

The New Rules of Retirement Series

Retirement is changing, whether you like it or not… whether you are prepared for it or not. Let’s lay down the new rules of retirement and how to follow them, bend them and break them for your needs.

This is the introduction article to our New Series: The New Rules of Retirement. The Next Article in the Series is Jobs For Retired People.

Rethinking Retirement

The New Rules of Retirement - for when the old playbook fails you

You have the freedom to define the word “retirement” to best suit you and your needs. Retirement might have been cut and dry for the previous generations, but it is all over the board for those pondering it now.

We all know the old playbook – put in your time at a company – retire after 40 years – receive your pension and social security. This playbook was scrapped for many in the baby boomer generation on. Events beyond our control may have set us back or have caught us off guard.

Depending on if this happens to you later in life or earlier in life, there are still ways to enjoy a “retirement.” Moreover, some might find the new ways of providing for retirement even more fulfilling than the old ways.

A Case Study in The New Rules of Retirement: The “Average American”

Let’s say that you are the “Average American” who is of retirement age. (We are talking – the most average of average.) You decide to retire at 66, the current full age of retirement. Right now, the average Social Security check for the Average American is $1,461 a month.

In addition to Social Security, the “Average American” will have about $172,000 in retirement savings at age 66. This is based on a (median estimate instead of average).

Then, let’s assume you made about $60,000 a year in your last years, and you are about to retire today. You estimate that you will need about 70% of that amount to live in retirement. So, you need $42,000 a year, or $3,500 a month to fund your modest American retirement. (This is all in current dollars, not future money for this example.)

To be reasonably safe, we will assume you will live to about 90 years old and your savings will stay in the stock market with a 5% rate of return in conservative investments.

Just How Screwed/Set are You – The “Average American”?

If you live to 90, for this case study, the math says you will need about $470,000 in savings to compliment your social security (in today’s dollars). However, you only have $172,000. In this scenario (living off of $42,000 a year) you are short $298,000.

You will have $2,205 a month to spend instead of $3,500
= a deficit of $1,295 a month.

This adds up to living off of $26,460 (including social security) instead of $42,000.

Plus… TAXES!

On top of this, we have not even taken into account taxes! Depending on how much you withdraw each year, and where you have your money stashed (401k? Roth?), you may need to pay taxes on your retirement income. Austin, at The Logic of Money, does a good job on quickly breaking down retirement taxes in this article here.

So, What Do You Do?

Many Americans will accept their fate and live on their fixed income, or they may decide to stay in their full-time job longer. However, that does not need to be you! Being retired does not need to be a do nothing sentence.

In Comes the New Rules of Retirement

The New Rules say you can make up the difference by making passive income and participating in side jobs. (This is what the kids call side hustling!) Moreover, you can still maintain your retired status find ways to do things you love (or hopefully come to love).

With your side job, you can showcase your skills/expertise or learn a new skill. You only need to make about $1,300 a month, so there the pressure is revealed to find something that just “pays the bills.” Retirement is a time to spend time doing things you enjoy with people you enjoy. You can tailor your experience to meet your needs with a little bit of planning and initiation.

The new rules of retirement say you have the freedom to define the word “retirement.” You can still be retired and bring in extra income in our new economy.

Passive Income and Side Jobs for Retirement

jobs for retired people

Our next articles in our New Rules of Retirement series will help you explore all the avenues of making extra money. We will explore traditional jobs as well as new jobs available to retirees who need a little extra income.

READ IT HERE: Jobs for Retired People

You can also get a jump start by reading about our favorite retirement money books here.

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How Much Does Medicare Cost?

How Much Does Medicare Cost?

How Much Does Medicare Cost?

Medicare costs can be different person to person, depending on which type of plan you choose. After you have a basic understanding of Medicare and it’s basic components, you will want to know how much does Medicare cost? The answer is, it depends on how you structure it. Let’s break down what you could be paying.

Medicare Costs Broken Down & Made Simple

When you set up your Medicare, you will decide if:

Your costs will also be different if you get help in any way from any state or federal programs.

How Much Original Medicare Costs

  • Medicare Part A – For most people, there is not a cost or premium you pay for Part A. Your Part A is premium free if you worked in the US and paid Medicare taxes for at least 30 quarters. (You will pay between $240 – $437 a month depending on your work history for Part A if you do not meet the premium free requirements).
    • There is also a $1,364 yearly deductible for Part A services and coinsurance tiers on hospital stays.
  • Medicare Part B – You will pay a premium for Part B. In 2019, the standard premium is $135.50 per month. If you make more than $85,000 a year in retirement, you will pay more on an income dependent scale.
    • There is also a $185 Part B deductible and a 20% coinsurance (co-pay) for most approved services.
    • Late penalties may also apply to Part B (and less commonly, Part A) if you do not sign-up when you are first eligible.

How Much Prescription Drug Costs

Medicare Part D Prescription Drug Plans

Medicare Part D – Prescription Drug Coverage needs to be obtained from a private insurance company. Each company will price their service differently and you can shop for the best plan and price for you. In addition, you will pay more for your Part D coverage, on a sliding scale, if you make more than $85,000 a year while on Medicare.

Other costs to consider with your Part D coverage are co-pays and coinsurance, in addition to deductibles.

There are also late enrollment penalties associated with not signing up for Part D coverage when you are first eligible if you do not have “credible coverage.”

How Much Medicare Supplements or Medicare Advantage Plans Cost

On top of your Original Medicare, you will need to make a decision to either participate in a Medicare Advantage (Part C) plan or to consider having a Medigap (Medicare Supplement) Plan. If you need help deciding on which one is best for your needs, please read our article on Medicare Advantage Vs. Medicare Supplements.

  • Medicare Supplement Plan Costs – Medicare Supplements will each have a different cost depending on the Letter Plan you choose and the company you go with. The government decides what benefits are offered by each letter plan. Then, each private insurance company decides what price they can offer for each plan in each market. It is a good idea to compare multiple plans by multiple carriers (insurance companies) in your area before choosing a plan. An independent insurance agent will be able to help you do this.
  • Medicare Advantage (MA/MAPD) Costs – Part C, or Medicare Advantage Plans are also offered by private insurance companies and stand in place of Original Medicare. In addition, they often include Part D Prescription Drug Coverage. Some of these plans have low or zero premium plan options. A few even cover Part B premiums. All of them are required to have max out of pocket expenditures and deductibles. It is a good idea to talk to an independent insurance agent on MAPD plans in your area to help you choose your best option.

Medicare Costs Summary

In summary, Medicare will cost you something, unless you are on full benefits from Medicaid. Moreover, you have already been paying into the Medicare system during your working career with Medicare taxes. Common set-up for Medicare beneficiaries include:

  • Having Original Medicare, Part A Premium Free, Part B Premium at $135.50 /month and a stand alone Part D Premium to pay. Then, adding on a Supplement Plan to cover the expenses Original Medicare does not pay.
  • Or having a Part C Medicare Advantage Plan that includes a drug plan with a premium to pay (sometimes a $0 premium). Most commonly, you will still pay your Part B premium with Medicare Advantage.

Get More Help Understanding How Much Medicare will Cost You

One good resource for learning more about the costs of Medicare is the Medicare and You Book published by the government every year. It is a large book, so please star with our Medicare and You User’s Guide to learn what it offers and to get a copy if you need one.

In addition, finding the best Medicare options for your budget can be a lot to take on, but hopefully this breakdown is helpful. I strongly suggest talking to a professional to help you in setting up your Medicare plan. As an independent agent myself, I suggest using an independent agent. They are not tied to one company, so they work for you, not one carrier and can help you in considering many different carriers and plans.

Carly Cummings, Medicare and Medigap Expert

As always, if you live in Nebraska or Iowa, please give me a call, and I can help you out either in person or over the phone.

Carly Cummings, NE/IA Licensed Independent Insurance Agent for Life and Health.
how much does medicare cost?
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Best Near Retirement Money Books

Best Near Retirement Money Books

Here are the best books for when you are at or near retirement

Best Retirement Money Books Pin - Medicare Life Health

For those of you that are near retirement, but not quite there, this is your crunch time. Your money should be working in overtime by the time you are 5 to 10 years away from leaving employment. So, let’s look at some of the best near retirement money books that will give you the most return on your hard earned investments.

Even the busiest of individuals should spend at least a couple hours with each of these books as they have the potential to not just help you save money, but potentially earn thousands of dollars more.

It should be your goal to not only take advantage of your best earning years and best investing years, but to also use this time to set yourself up for the most advantageous tax situation possible. All of this can mean the different between a comfortable retirement and an excellent one.

Don’t want to “read”? Then listen instead!

If you are “not a reader” I would encourage you to consider listening to these books. With an Audible account, you can knock a book out a week on your daily commute. Medicare Life Health readers can get two Audible books free by clicking on this link!

The Power of Zero by David McKnight

The Power of Zero, Revised and Updated: How to Get to the 0% Tax Bracket and Transform Your Retirement by David McKnight is one of the best retirement money books out there. You could even get away with reading it in retirement to take advantage of some of McKnight’s financial recommendations.

McKnight is an expert on putting your money in the right financial accounts to get you to a place where you can keep your taxes as low as possible in retirement. He will even teach you how to structure your savings and withdrawals to keep you in the zero percent tax bracket! Even if you have thousands or millions of dollars saved to enjoy in retirement.

The best parts of this book are:

  • It’s short and to the point – but packed with information.
  • It gives you a game plan that is very doable for the “average retiree.”
  • However, it is a different way of thinking. McKnight teaches a unique solution to how to structure your retirement accounts to keep taxes low.

Bonus Books by David McKnight: Look Before You LIRP: Why All Life Insurance Retirement Plans Are Not Created Equal, and How to Find the Right One for You

This book goes into more detail on one particular retirement finance vehicile: IUL’s or Indexed Universal Life Insurance. We have an article that introduces you to IUL’s as well. They are a good option for people that are looking for another tax advantaged way to save/use money in retirement.

You Can Retire Sooner Than You Think by Wes Moss

I like that this book is one part psychology, one part finance. Wes Moss very much wants you to be HAPPY in retirement. However, no specific amount of money saved up will make you happy. What you can do, to help in the happiness department, is to make lifestyle and money choices now that will ensure a base level of happiness later.

In addition to sharing profiles and attributes of happy retirees, Moss has five helpful money secrets of happy retirees to share with you. He distilled these secrets from his listeners on his popular radio show and also from his clients as is a financial adviser. These secrets are not revolutionary. However, they will give you a great place to start preparing for retirement. This is true especially if you are ten years out or less.

The best parts of this book are:

  • Moss’s two way approach to preparing for retirement – mentally and and financially.
  • The book is full of practical advice and interesting statistics.
  • Moss makes a good case on the side of paying off your mortgage in the debate of mortgage vs. no mortgage.
  • One of Moss’s “Secrets” covers having multiple streams of income in retirement. I think this is one of the most essential parts of retirement in this century. It will only get more important as our social structures continue to change.

Your Money or Your Life by Vicki Robin

I am recommending Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century by Vicki Robin to those of you that might need a reboot in order to make it to your retirement goals.

This book is usually recommended to younger people that are just starting to save for retirement. However, it is really a book for anybody that wants to reshape their relationship to money and retirement. Everyone should read this book (I have read it more than three times.) In this instance, I want to call out one group of near retirees that need to read this book NOW:

If you are like “most Americans” who have an average of $84,821 saved for retirement, you need to step up your game in these last few years before retirement. This book will help. It will show you how to save more money fast, so you can retire even faster.

What’s the best near retirement money book you’ve read?

We are now in the “New Age of Retirement”. These books will help you in defining what that means to you. Then, they will help you to get there.

Let us know what you would add to the list. What are your best near retirement money books? Please comment below!


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What is Indexed Universal Life Insurance (IUL)

What is Indexed Universal Life Insurance (IUL)

What is Indexed Universal Life Insurance (IUL)? Do I Need One?

What is Indexed Universal Life Insurance (IUL)? That is a question we hear often as IUL’s have been increasing in popularity. I am sure we will hear it even more as they are expected to continue to rise this year.

They have become popular in our low interest bond market as an alternate way to grow savings fund conservatively for both retirement purposes and legacy purposes. However, not everyone needs an IUL. Let’s take a deeper look into what are IULs and who might need/want one.

What is Indexed Universal Life Insurance (IUL)?

An Indexed Universal Life (IUL) Insurance Policy offers insurance with a cash value in addition to a tax-free death benefit. Both the cash value and the death benefit are useful and attractive tax advantaged ways to provide for your family. The cash value can provide you tax advantaged income in retirement, and the death benefit can provide tax advantaged cash for your family when you die.

Premiums

IULs are structured so that premium payments cover not just the cost of insurance, but also the extra money needed to create and maintain the cash value of the policy. Each month the policy cash value grows with excess cash payments and interest. However, the policy is also debited by the cost of insurance and policy charges/fees.

Interest

The interest growth is tied to a financial index (like the S&P 500, Russell 2000, Nasdaq 100 and the Dow Jones) and usually with a minimum growth rate and a maximum (capped) interest rate. This allows participants to take advantage of market growth without having the threat of losing money. The tradeoff for this security is the growth cap. For instance, you might have a minimum interest of 2% and a cap at 12%. If the market loses money, you don’t. If the market grows 20% or 30%, you only see 12%.

The Flexibility of IUL

One of the main reasons, IULs are popular is their flexibility.

  • Premium Flexibility – The premiums are flexible each month. There is usually a minimum and maximum you can feed into the policy each month. Staying within your contracted terms, this allows you to let the accumulated cash value help in paying the cost of insurance if you miss a month’s premium. However, the policy will lapse if there is not enough cash value to cover the cost of insurance and fees. (This is true with most policies, unless you have a no lapse guarantee rider.)
  • Death Benefit Flexibility – You have the ability to increase or decrease your death benefit (subject to underwriting).

Do You Need Universal Life Insurance (IUL)?

Here are some reasons you might need an IUL.

  • First, if you are looking for another avenue to bolster tax advantaged (tax-free) cash flow in retirement.
  • Second, if you need to leave money after you die for final expenses, income replacement, debts, or estate taxes.
  • Finally, if you need an alternative to long-term care insurance.

Let’s break each of these down.

IULs for Retirement Planning

Sometimes you need another revenue stream in retirement. You probably have your taxable accounts (IRAs, Pensions, Social Security, Investments) to draw from as one stream. In addition, you might have tax free accounts such as a Roth IRA (or Social Security if you keep your tax threshold low enough), but often times you need another vehicle to in this tax advantaged category.

This is where an IUL’s cash value comes in. You can borrow against this amount in retirement and the loan is considered a tax free event. This is an avenue is not just for the super wealthy, but if you are looking for a place to grow a lot of money conservatively, this is a good place. It is also a good way to manage your tax exposure in retirement. Are you interested in keeping your taxes as low as possible in retirement? I suggest reading the book, The Power of Zero by David Mcknight to learn more.

IULs for Survivor’s Benefits

These are the traditional reasons for taking out life insurance, and they all stand-up in an IUL. You can structure your policy so that your beneficiaries will receive a lump sum of cash that is not taxed by the federal government. You will need to plan to see how much of a death benefit you will need to leave to help your family in paying off your expenses (funeral, medical) and your debts. In addition, your beneficiary(ies) might need to replace your income after you pass or pay off big ticket items to maintain their lifestyle. Moreover, the death benefit can offer money to help pay estate taxes.

IULs for Long-Term Care Planning

What is an IUL

Long Term Care Riders are a newer benefit of IUL policies. However, only some carriers offer them. Long Term Care Insurance can be very expensive… very, very expensive. Wrapping up the “cost” of insurance in an upfront IUL rider is one way to make it less painful. With an LTC rider, qualified long-term care expenses are paid using the death benefit before death. The insurance company pays what is left to your beneficiaries as a death benefit when you pass. Remember, Medicare doesn’t cover Long Term Care.

Action Steps

Now that you know what is Indexed Universal Life Insurance (IUL) Policy, here is what you can do next:

  • If you have decided that you want an IUL or want more information on one, you should talk to a licensed insurance agent. IUL’s are complicated. In addition, each company structures them differently. This is not a product you can just “click to buy!.”
  • If you have read through this article and thought, “not me” or “not now,” then I would encourage you to consider other alternatives to solve your planning problems.
    • Investing: If you need a place to access cash that is not taxable in retirement, make sure you are maxing out your Roth IRA first.
    • Insurance: If you need life insurance, but just not that much, check out final expense policies, or if you are younger, term life.
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Life Insurance in Retirement?

Life Insurance in Retirement?

Do I need life insurance in retirement?

Personal Finance and Insurance for Retirement

In retirement, you need a plan that will keep you healthy and happy for many years, but what happens when those years run out? Well, you need a plan for that too. Life insurance in retirement is one solution.

We all will end up in different financial places in retirement, and our cash flow and savings will dictate how our “final expenses” play out after we pass. Not everyone needs life insurance in retirement, but even if you don’t “need” it, you still may want it.

Reasons for life insurance in retirement and recommendations

Let’s break down some of the reasons for having life insurance in both the need and want categories.

1. No Savings

You may need life insurance if your saving plan didn’t quite pan out like you thought it would. According to a study done by Northwestern Mutual, 1 in 3 Americans have less than $5,000 saved for retirement. The average funeral costs between $7,000 and $9,000, and many people have large medical bills from their last days, so you can see how that math does not add up.

You might have Social Security coming in monthly or even a pension. However, you typically need that money for retirement living expenses. Unless you think you can save a little of that money each month in retirement, life insurance is a good idea. (Be honest with yourself. If you could not save it before retirement, you probably will not save it now.)

Life Insurance Recommendations

Your options will depend on your cash flow situation. First, you need to decide how much insurance you need. Second, you will need to see what you can afford to pay each a month in premium.

Final Expense – Term life and whole life insurance is usually too expensive when you are older, and your social security death payment is only $255. Final Expense Insurance will give you a smaller face value ($10,000 to $20,000 is very common) but it is priced accordingly. I recommend getting this insurance sooner rather than later, as the premiums will go up every year you get older.

Life Insurance for your final expenses has a bonus when it comes to cash flow – it is paid to the beneficiary directly and is not subject to federal income tax which can save hundreds/thousands. Moreover, because it does not have to go through probate delays, your family gets the money faster. Here is one last benefit. You can assign funds from the life insurance to be paid directly to your funeral home. This little convenience can be a big deal to your loved ones.

2. Market Volatility Concerns

Another type of retiree may want life insurance because they are concerned about their savings being affected by market losses. Maybe you are like “most Americans” who have an average of $84,821 saved for retirement. However, $85k well below what experts consider enough for living expenses. Think of what one bad market year could do to your nest egg.

Even if you had a couple million in retirement, there are reasons for life insurance in relation to market losses. It just depends on how much you are intending to leave behind and for what reasons.

Example

For example, one spouse dies right after a large market crash (hopefully unrelated). The crash leaves the other spouse with half their portfolio assets and the same amount of living costs. The surviving spouse can use the life insurance money to fill in the holes from the lost income and catch up in the market.

You could use this money to pay off a mortgage. Similarly, you could use it to handle any issues with the estate. In addition, it is always good to know that your loved ones will have cash to bury you, no matter what the market conditions.

Life Insurance Recommendations

  1. IUL – For those that have cash to pay premiums and market assets to protect, I recommend you talk to a licensed agent about an IUL – Indexed Universal Life Insurance. These policies offer flexibility for your particular phase in life. However, they are complex, so please talk to a professional about your options.
  2. Final Expense – For those that are mostly concerned about final expense costs (i.e. funeral, medical bills, credit card/loan balances, etc.), a small final expense policy might be your best bet.

3. Long-Term Care Considerations

As an alternative to Long Term Care Insurance, some retirees consider Life Insurance Policies that have LTC riders or a Chronic Illness Rider. For example, an insurance carrier might offer a product (like an IUL policy) with an option to purchase up-front a rider that will cover long term care events. You can pay qualified long-term care expenses with the death benefit, naturally, before death. Then, when you pass, the insurance company pays what is left to your beneficiaries

Life Insurance in Retirement Summary

I would recommend some form of life insurance to retirees.

  • If you can afford to be responsible for your final expenses, do it. Your family will appreciate it.
  • If you can afford to make sure your spouse can continue to enjoy retirement when you are gone, hop to it.
  • If you are looking for an alternative to Long Term Care Insurance, call an agent and learn your options. Medical expenses are not getting cheaper. In addition, Medicare does not cover these.

My Personal Experience

I’ll leave you with my own family’s relevant story. Last year, when my father-in-law unexpectedly passed away, his Final Expense policy saved everyone time and from stress. This left my mother-in-law well taken care of financially, but a lot of her assets were not in cash at the moment.

It was a great relief for all of us not to have to jump through a bunch of hoops to get the bills all taken care of. The policy paid money directly to the funeral home and then sent my mother-in-law the rest in a check. All of that without a tax event. It made me grateful to have a family that planned for each other and made the last year a little less stressful for all.

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