I currently have life insurance through my job, plus an additional $300,000 out of term policy. I plan to retire next year at age 63 with $1.2 million in retirement and savings. At 65, I will receive a $1,000 monthly pension for life, and at 67, Social Security. My wife will continue to work for about 3 more years.
We have no debt at all. Besides the house, he plans to own a farm worth $600,000. Do you need life insurance after you retire? My wife will receive my Social Security and she will also receive my pension, so my passing does not seem to make her life worse.
look: I’m 52, single, no kids, and have a 401(k) of just $190,000. “I don’t want to die alone, forgotten at home.” What should I do?
Dear Reader,
Sometimes it makes sense to keep life insurance after you retire, sometimes it doesn’t.
Casey Buckner, a certified financial planner and owner of Granite Financial Group, said life insurance can be helpful when retirees are in debt, such as a mortgage, because it helps their surviving spouses pay off their debts. rice field. That may not apply to you right now, but it will if you move and get a new mortgage.
It may also make sense to keep the policy if there is any doubt that the wife’s retirement income will not support her standard of living. She said she had social security and a pension, but it wasn’t clear whose pension she was. If you died before her and your property disappeared, would her Social Security and remaining assets be enough for her?
Of course, $1.2 million is a lot of money, but there’s no way of knowing when either one of them will die or how much money they’ll have at the time. You may have spent very little during that time period, or your retirement savings may be nearing depletion.
Before you make any hasty decisions, do some simple math to determine if what she plans to bring in will be enough for the amount she’ll need to spend herself. Run several scenarios, including different years she (or you) will be alone, multiple retirement income levels and needs, and more. And don’t forget to consider emergency, medical and long-term care needs. Any one of these three factors can completely ruin a happy retirement.
See also I’m 64 years old, drive an Uber and earn $1,500 a month, and nearly $5,000 a month in pensions and social security. Should I pay off my mortgage before I retire?
If you don’t want to keep paying premiums, which is obvious, consider the numbers. For example, choosing to enroll in Social Security determines how much you can receive in benefit checks and how much investment you are withdrawing each year. If you can rely primarily on Social Security checks and pensions, that means less money coming out of your retirement and savings accounts and more money that can grow over time. You could wait to enroll in Social Security as a way to maximize your benefits by age 70, but how much should you withdraw from your assets each month to pay your bills?
Your employer’s life insurance plan is usually term insurance, but if you have whole life insurance, you have additional coverage. optionsuch as cashing out policies or reducing benefits.
Of course, a qualified financial planner can also help you work out the numbers, make sure your assets are well maintained, and check if you have additional insurance.
Readers: Any suggestions for this reader? Add them in the comments below.
Questions about your retirement savings? Email us at HelpMeRetire@marketwatch.com
