When it comes to wealth, there is more to it than just building it. You should have a plan in place to protect it. Ultimately, there are three major contingencies that you should have a plan for, as the result of having no plan could devastate your finances.
Protecting Your Ability to Earn Income and Risk Management:
- Disability Insurance – Your greatest asset is your ability to earn income. Disability insurance can replace a percentage of that income in the case that you become ill or unable to work. There are different types of riders and policies that are available to fit the specific needs you may have.
- Approximately 40% of full-time workers, or 50 million Americans, do not have any form of disability insurance, and an even higher number have inadequate amounts of income replacement coverage.
- 8 out of 10 that did not have disability insurance, say that they have not fully recovered financially.
- Long-term Care – What would happen if you became seriously ill or disabled? Have you thought about your medical and family history and lifestyle (diet, exercise, etc.)? Long-term care is an insurance product that offers a variety of services designed to help individuals meet their personal healthcare needs when an individual can no longer perform everyday activities on their own. In addition, it can supplement the cost and ease the financial burden of assisted living/nursing homes to make it more affordable for people who need it.
- Someone that is turning age 65 today has almost a 70% chance of needing some type of long-term care services in their remaining years.
Protecting Your Loved Ones, Business and Dependents:
Do you have kids or financially support your parents? Are you married? Do you have debt? Are you self-employed or is the job you work considered high risk? The topic of life insurance is not intriguing but can be important in protecting and leaving your loved ones, business, and/or dependents in a safe financial position should you pass away. Life insurance can help pay for debt and expenses and can be purchased at a reasonable price that will permit you to continue with your normal savings habits. While something like term insurance is cheap and simply provides a death benefit, there are other options that provide additional benefits should you deem it necessary.
Protecting Against the Risk that You Outlive Your Income:
One of the reasons that we encourage people to begin saving as early and as much as possible is because we are seeing that people are living longer and healthier lives. It is possible that you could outlive / run out of money that you have saved for retirement. What happens if you run out of money? What happens if you need full-time care or need to live in an assisted living facility?
- Retirement Income Planning – In addition to having a strategy for putting money away to save for retirement, you should also have a strategy for withdrawing that money in retirement. When you are building a retirement income strategy, you should consider what you want your retirement to look like, and the cost of the lifestyle that you would like to have. Building a retirement income strategy is not a “one size fits all” plan. These plans are unique to you!
Building a financial plan takes time, effort, and a lot of planning. With an advisor to guide you, the process towards a life of financial security and success can be simplified. If you have any questions, please feel free to contact Tycor at 610-251-0670 to speak with one of our advisors.
Sources:
https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html