Insurance Needs for Empty Nesters and Retirees
As you get older, your needs change. While you worked hard to accumulate wealth early in your career, your goal now is to preserve your wealth for your retirement and future generations. Plus, as you age your health will begin to take a bigger role in your life, and ensuring you aren’t saddled with large healthcare costs will become more important. Consider the types of insurance you may need as you enter the later stages of your life, and how you can stay protected.
Health insurance
As you get older, your health-related costs are likely to increase. Before you hit retirement age, you’ll have to continue with your employer-sponsored health insurance plan, or find a plan on the health insurance marketplace. But once you reach age 65, you can enroll in Medicare to cover your health insurance.
As a federal program, Medicare is broken down into several parts which can help cover most health-related expenses.
Medicare Program Coverage
| Medicare Program | Covers |
|---|---|
| Medicare Part A | Hospital insurance |
| Medicare Part B | Medical insurance |
| Medicare Part C (Medicare Advantage) | Vision, hearing, dental, etc. |
| Medicare Part D | Prescription drugs |
| Medigap | Private insurance to cover additional healthcare costs |
Disability insurance
As long as you continue working, you may want to consider including disability insurance to protect your income. Disability insurance will pay for your income in cases where you are injured or sick and are unable to work. If your employer doesn’t already offer you disability insurance, you can purchase coverage for yourself.
If you continue working in retirement, it’s likely a good idea to keep your existing disability insurance plan. However, you’ll want to double-check that your policy doesn’t have limitations or reduced benefits for older policyholders. Plus, you may not need disability insurance if you feel that your Medicare plan covers you sufficiently in retirement.
Extended care insurance
Sometimes referred to as long-term care insurance, this will cover the costs of healthcare services that aren't covered by your health insurance. Extended care can be necessary if you contract a chronic illness or disability that needs more extensive care. This can include covering costs associated with assisted living, nursing homes, hospice, occupational therapy, or other related expenses.
Keep in mind that premium costs for extended care can be high, especially if you purchase a policy later in life, so consider if the cost is worth the coverage.
Life insurance
One of the best ways to financially protect your loved ones after you pass is through life insurance. There are a variety of policy types to choose from, including:
● Term: Provides coverage over a fixed period of time
● Whole life: Coverage for your entire life, usually with a higher premium
● Variable life: Builds a cash value over time
● Burial: Covers the cost of a funeral, burial, and other end-of-life expenses
If you have an existing life insurance policy, now may be a good time to reassess whether that policy is providing you with the coverage you need at this stage of life. If you aren’t sure, you can always walk through your existing policy and your options with a financial professional.
Homeowners insurance
If you still have a mortgage on your home, you have homeowners insurance coverage because your lender requires you to have a policy for protection. But if you have paid off your mortgage, you now have the choice of whether to continue paying for homeowners insurance, or get a new policy that meets your needs.
Homeowners insurance covers you against damages and other risks to your home and its contents. With a policy, you can be covered against natural disasters, fires, personal property, and liability if someone gets injured on your property. Assess your current coverage and if you want to consider an updated homeowners policy for the remainder of the time you have in your home.
Insurance = protection
Whether you’re looking to protect your health, wealth, or home, insurance is a useful tool. But as an empty nester or retiree, your insurance needs are likely to change, so make sure to review your insurance coverage as you enter new stages of life. That way, you can ensure you don’t pay for more than you need, but still have the coverage you need.
Looking for more personal guidance as you plan for this new phase of life? Contact us directly with any questions or comments or to schedule a one-on-one meeting. We’re here to guide you on your journey to financial security.
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