Disability Insurance

Disability insurance is more important for most workers than life insurance.   You are three times more likely to become disabled than die before age 65.  The most common disabilities are arthritis, back pain, and heart problems. Although death is certainly a great human tragedy, disability is a more serious financial problem than death, since a death reduces expenses and a disability does not. Continue reading Disability Insurance

Is Supplemental Insurance Necessary?

Our former employer offers supplemental insurance to employees including:
Accident Insurance
Cancer Care
Critical Care and Recovery Insurance
Hospital Intensive Care Insurance
Hospital Confinement Indemnity Insurance
Critical Illness Insurance Continue reading Is Supplemental Insurance Necessary?

Should You Get Long-Term Care Insurance?

Do You Need It?

According to Consumer Reports,  if you have more than $2.5 million in liquid assets, you can probably afford to pay long-term care insurance premiums out-of-pocket, and if you less than $500,000 in liquid assets, you won’t be able to afford the premiums.  That article was written in 2012, but inflation has been low in the last several years for adjusting the dollar amounts.  We fall in the under the $500,000 in liquid assets category.  We only plan to have around $250,000.  Clark Howard recommends not buying long-term care insurance if you have over $3 million in liquid assets or if you are on Medicaid. Continue reading Should You Get Long-Term Care Insurance?

Reducing the Cost of Life Insurance

Do you need life insurance?
Life insurance is to protect income. You really don’t need it if you have no dependents. You should also be able to drop it after you retire and have pensions and investments set up to pay for your spouse. My wife and I currently only each have a $10,000 group term life policies that we get inexpensively through the school district we retired from. It would help cover funeral expenses. If I were die today, my wife would receive 60% of my pension.  We plan to use returns on our investments as fun money until one of us dies, and then use investment income to make up the gap for losing 40% of a pension and one Social Security check.  A rule of thumb is that you will need 80% of your current income if your spouse dies, since some of your expenses are fixed.  You can examine your own budget to see what expenses would drop and what would stay the same, if your spouse dies. Continue reading Reducing the Cost of Life Insurance

The Affordable Care Act and Retirement

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Our school district had a retirement incentive of 85% of our final salary spread over five years, so 17% of our salary per year.  This  can be used to pay health insurance premium or put in a 403b retirement plan.  While we were working, I had family coverage and my wife didn’t take health insurance benefits.  When we retired, we dropped family coverage and my wife and I each took individual policies.  If we hadn’t, my wife would have had to withdraw money from her 403b and then pay taxes on it before using it to pay for our family health insurance premium.  Our older daughter graduated from college and is no longer on our health insurance policy.  We took out a private individual health insurance policy for our daughter who just started college. Continue reading The Affordable Care Act and Retirement