At this life stage, with years of hard work behind you, you can look forward to retirement. What kind of retirement do you want, and how can life insurance help protect your goals? Here are some tips for finding the right life insurance plan in the decade before retirement.
Ongoing expenses
Ideally, in the years leading up to retirement, you’ll see your expenses decrease and your savings increase. But in today’s world, many professionals are still supporting children while also caring for older family members. In fact, 20% of all working Canadians identify as part of the “Sandwich Generation,” juggling work and caring for both their children and elderly relatives at the same time (Globe and Mail, 2013). If you’re older relatives are collecting a pension, then you should make sure that they are paying the proper tax. You can get started with that here. If they are paying too little then they could face hefty consequences, which will put more of a burden on you. If they are paying too much then they might be entitled to compensation, which could relieve some of the financial stress for you, if you are financially supporting elderly relatives.
Being the main support for your children and older family members can be challenging. If you are caring for elderly relatives you might want to consider a company like Careshyft, who provide home care for the older generation. You can learn more about CareShyft here. You hope that by the time you pass your children will have themselves set up, but that is not always the case; your children might still be in education, and how will they pay for it? Life insurance can help reduce worry and stress about looking after your family. In the event of your death, a life insurance plan can help pay for geriatric care for your elderly relatives and help support your children. When considering your life insurance needs, consider how much it would cost to provide support for those who depend on you and factor this into your plan.
Save for each other
If you were to pass away, the loss of your income could prevent or delay your spouse’s retirement. Calculate how much your spouse will need in order to retire compared with how much you already have saved and/or reserved in a pension plan. Is there a gap between your current savings and what your spouse will need to retire? In the event of your death, life insurance coverage can help fill that gap to ensure your spouse has enough to retire comfortably and when planned (Kimberly Lankford, 2015). A good life insurance plan can help ensure that your spouse will be taken care of if you pass away.
Protect your estate
Settling an estate can be expensive. And did you know that the average cost of a funeral in Canada is more than $6,500? (Money Sense, 2011) Final expense insurance is a type of life insurance that can help pay for a funeral and for expenses related to settling your estate. This type of insurance can help save your family from paying out-of-pocket for end-of-life costs. Ultimately, there is no right or wrong way to plan for your final resting place. For example, whether you want to be buried or would prefer to be cremated, contacting the relevant funeral directors or cremation services to prearrange your circumstances can give you peace of mind.
For more information about settling your estate, check out the guide to wills and estates from the Ontario Ministry of the Attorney General.
Leave a strong financial legacy
At the end of your life, you may want to leave an inheritance to your family. An inheritance can provide greater security for your children and/or a financial foundation for your grandchildren. Perhaps you’d like to leave a final gift to a charitable organization or other good cause. Both options can help you leave a financial legacy. Talk to a Teachers Life representative about planning for final gifts as part of your life insurance plan.
Follow along for more tips and tools
At Teachers Life, we’re here to support educators from their first day in the classroom to retirement. In our new blog series, “Insurance for Your Life Stage,” we’ll discuss how life insurance needs can change through each of life’s stages. Follow us on Twitter and be a part of our Facebook community.
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