Retirement protection - the other side to saving
Your dream may be to travel or spend time relaxing at a cottage; or maybe you want to buy the classic Corvette you've been drooling over for years. You want these goals to become realities.
Your retirement savings plan is in place and your money is growing. You're saving and investing so you have enough to retire on and live the lifestyle you deserve. Your retirement fund is turning into a significant amount of money. By the time you retire, it could be your largest asset. Larger, even, than your house.
Are you protecting your plan?
Are you sure your money will be spent on fulfilling your retirement dreams? Or will you have to withdraw it early?
What is retirement protection?
It's a plan you can put in place to ensure your retirement money is used for your retirement.
Large assets should be insured
Period. Case closed. Fact.
If you don't have all of your large assets insured, you have a big gap in your financial plan.
Insuring large assets ensures your money will be there for your retirement
Let our advance worrying become advance thinking and planning - Winston Churchill
You likely have four large assets that require insurance:
The loss of any of these can have a dramatic effect on your savings if they're uninsured.
House and car insurance exist to replace the object that's insured. Simple. But what about life and health?
Your life and health are large assets too
Prediction is difficult, especially about the future.. - Yogi Berra
Your life is your most important asset. It has tremendous value that reaches deeply into the lives of your family and friends.
You already know what life insurance is for. You have it so your dreams will live on, even if you're not around. You have it so your family can continue on with their lives. Your children will get to university; your spouse will retire in comfort; your family cottage will remain in the family, etc. Make sure you have enough.
Your health is another of your biggest assets, and though you may not think of it this way, becoming seriously ill is a life-altering event, financially as well as physically and emotionally.
You'll be off work, probably collecting disability pay that covers only part of your normal income.
And, in addition to a lower income, there are other costs that can negatively affect your financial health if you aren't prepared for them.
Major illnesses are costly
To pay for the many things that aren't covered by government or employer health plans you essentially have three options. You can:
- Withdraw from your retirement
- Borrow the money you need
- Create a recovery plan
It took sacrifice and self-discipline to build equity and create a nest egg. Certainly you don't want to sell assets like a home, car or family heirloom to finance a recovery from illness. And if you were to withdraw funds from your retirement savings, you'd face tax implications and run the risk of drastically reducing the amount of money you'd have at retirement.
Do you understand how much of a difference a withdrawal can have on the amount available for your retirement?
See an example of how much of a difference a withdrawal can make or use the calculator to see the effect one can have on your own savings.
Borrowing money means you could be looking at a loan amount that's the equivalent of taking on another mortgage. The monthly payment could force you to change your current lifestyle, and prevent you from saving for future dreams and goals.
Create a recovery plan.
Critical illness insurance will help you meet the financial needs associated with recovery from a life-altering illness. It differs from life insurance, which supports your survivors after you're gone, or disability insurance, which replaces a portion of your income if you're unable to work.
If you're diagnosed with one of the covered illnesses and survive the waiting period stipulated in the policy, critical illness insurance provides you with a cash payment that can be used any way you choose.
This insurance payment allows your retirement savings plan to continue on as you planned. Your retirement fund will be there for your retirement.
Sit down and really think about it.
Are your plans for retirement as solid as you'd like?
Do you have a recovery plan to protect your savings as you save?
Do you have enough life insurance?
What will my expenses be at retirement?
What will my investments be at retirement?
And do you have a plan that ensures your savings will last once you are retired? Take a long, hard look at long term care insurance, which gives you the financial resources you need to choose the care you want, should you ever need make the choice. By helping pay for your care, this insurance helps protect your retirement savings, and keeps you in control.
It's all about spending your money exactly how you want, when you want.