There’s a new way to save for retirement. For years, many experts have suggested saving for retirement utilizing life insurance policies. The challenge is, most of these strategies are tailored for those with incomes in the millions. The average American is left searching for an alternative retirement savings vehicle. The good news is, there’s a new way to save money for retirement while utilizing life insurance. Selecting a term-life policy with the cheapest rate can help save for retirement, and unlock additional funds for investment. Here’s how the process works.
Shop Around for Term Life Insurance
Those with dependents ought to explore life insurance as a means to preserve income should a tragedy occur. This holds true for single-income homes as well as multi. Mortgage obligations, college planning, retirement and more can be secured with the right life insurance policy. Surviving family members deserve the security they’ve come to rely on.
Life insurance comes in many forms with options available to suit nearly any lifestyle. Rate vary yet term policies consistently have the lowest. Term life insurance is often purchased by those too young to retire, as a measure to secure income in case of early death. Rates and policies for term life will vary based on age, health, and other influences. In some cases, the annual rate for whole life insurance can be almost ten times than term life. a 30-year-old male may spend approximately $750 annually for a 1,000,000 term life policy, while whole life coverage can range over $9000. That’s over $8000 in annual savings which can be otherwise invested.
With numbers like that, term life may be the right decision for those trying to save more for retirement. Term length and coverage amounts will depend on personal needs, wants, and desires. Age, health, and lifestyle will also affect term length, payout, and rates. Those over 65 may encounter challenges obtaining term life insurance. Review any employer-offered life insurance to reveal coverage limitations and determine if additional coverage may be appropriate. To help preserve a term life policy and its rate, opt for guaranteed-renewable term life with a non-cancellation clause. This can help manage rates and coverage, freeing up attention for other investments.
Adding Layers of Financial Security
With annual savings in the thousands, it may be tempting to go on a shopping spree. While that may satisfy a short-term desire, investing savings into intelligent savings vehicles can achieve more.
- Emergency Savings Funds
Creating an emergency savings fund is one of the smartest ways to immediately invest savings. Most recommendations suggest a savings account of 3 to 6 month’s income; personal requirements will dictate. An emergency fund is a barrier between the unexpected and debt. Debt can lead to late charges, interest accumulation, and adverse credit ratings.
Any number of life changes can affect income. Rest assured with the security an emergency savings account can offer. While creating an account may place a short delay on saving for retirement, the added layer of security will more than make up the difference.
- Long-Term Disability Insurance
Long-term disability insurance can help toward securing retirement. Persons below the age of 65 are more likely to become disabled than perish, leaving many people each year unable to earn an income. Relying on government assistance will likely result in high debt, and that’s for the percentage able to claim those benefits at all. There are nuances to disability insurance. Speak with a financial advisor to find out more about preserving income with long-term disability insurance. For those living alone, disability insurance can still be a necessary protection to help cover individual expenses, should a disability occur.
Disability insurance may be carried as part of an employer insurance package and is available for individual purchase. For those with disability insurance through an employer, be sure to review policy limits to ensure adequate protection. Oftentimes, employer-offered disability insurance lacks sufficient levels of protection. Loss of income can derail any retirement savings plan. Preserve income stability with long-term disability insurance and stay on track.
With term life in place to protect loved ones, the cushion of an emergency savings fund, and the assurance of long-term disability insurance it’s time to invest the remaining savings into retirement savings vehicles.
With annual savings reaching into the thousands a number of investment strategies become available. Speak to a financial advisor on ways to save for retirement utilizing annual life insurance savings. Taking more control over life insurance decisions and investing savings can have a significant impact on achieving retirement savings goals.
For more on saving for retirement, additional information on term-life insurance, or questions call today. Check back often for more on this, and other ways to improve health and wealth.