We’re with Matt Pastor, a financial advisor on our team, to talk about life insurance and the need for it in retirement. Once you’ve earned enough to take care of your family and the kids are through college, do you still need to carry that policy? This is a great question and the answer will vary from person to person depending on your needs.
We’re with Matt Pastor, RICP® a financial advisor on our team, to talk about life insurance and the need for it in retirement. Once you’ve earned enough to take care of your family and the kids are through college, do you still need to carry that policy? This is a great question and the answer will vary from person to person depending on your needs.
The uses for life insurance are fairly obvious when you’re working and starting a family. You need a way to replace your income should something happen to you, and this policy is a very common way to fill that income gap. This tax-free death benefit helps your spouse pay off debts and cover any other financial needs, but once you get into your late 50s and 60s, the wealth transfer tool typically becomes your retirement savings.
That’s why people typically think there’s no longer a need for life insurance but we’re seeing more scenarios where it’s still useful. You might still carry a mortgage, which isn’t necessarily a bad thing. You also might have other debts like student loans or car payments so those liabilities might make it a good idea to keep life insurance. Typically we see life insurance used to either cover a larger mortgage payment or help with paying for funeral costs, but it can also be used to replace a pension payment in some situations.
When you get more creative with your planning, life insurance could be used as an income strategy in retirement as well. Different policies allow you to build up cash value over time, which you can borrow from and create a tax-free cash flow for you. Be aware that the projected cash value isn’t always accurate but this could still be a great idea for you.
As you can see, the answer to this question needs much more information for each individual situation, but if you have an existing policy in place, let’s discuss your options before you make any decisions.
Here’s some of what we discuss in this episode:
• Some of the considerations we make with life insurance in retirement.
• A case where we would tell someone they probably need to keep life insurance.
• Can life insurance help replace a pension?
• How can you use life insurance as an income strategy?
• If you have a policy now, what should you do?
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Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
