Protect your Assets for Retirement

By: Michael Clark

We all know by now that times have changed since our parents and grandparents retired. We cannot completely count on the things they may have had. That does not mean we should abandon those things, but simply accept them for what they are. They all boil down to asset protection, nothing more. As we approach retirement and enter into a new phase of life, we need to prepare to protect our assets that we’ve worked so hard to accumulate.

There are a few areas where we can prepare ourselves to protect our assets when we transition from work to retirement.

My health insurance is through my employer. What do I do when I retire?

Over time, our healthcare needs change. In most cases, this change means that we use the healthcare system more frequently to pay for our healthcare needs. When we reach age 65 or have certain disabilities, we typically become eligible for Medicare. Information about coverage can be found many places, but the most accurate information is found on medicare.gov. This site is owned and operated by the Federal Government and can help you in your decision making process. Another way could be either to contact a local health plan in your area or better yet, contact an agent that is contracted with ALL/MOST major health plans in your area and can complete an analysis of which plan best suits your individual needs.

I have Short Term and Long Term Disability through my employer. Do I still need it when I retire?

Short Term and Long Term Disability Insurance is something we might have while we’re working to protect our income if we become injured or disabled. Long Term Care insurance is a type of coverage that typically replaces both as we retire. Unfortunately, Long Term Care is one of the least discussed areas of asset protection, yet it is one of the most important. Most statistics show that one out of every two Americans will need some form of long term care in their lifetime, yet only a small percentage of individuals purchase coverage before or when they retire. In the United States, estimates show that long term care provided by a facility can range from $3,000-$10,000 per month, depending on the level of care needed. Again, medicare.gov has information on different plans available. As is the case with health coverage, working with an agent or a financial advisor is a better decision when it comes to evaluating your Long Term Care options.

My employer and I have been making contributions to my retirement plan most of my working life. How do I make sure my 401K/403B/Pension lasts through my retirement?

As life expectancy increases, people need to prepare to make their retirement income stretch further. Social Security is one form of income, but as most of you know, it too is in financial trouble. If you have saved through a 401K/403B or are fortunate enough to have a pension, you need to speak to a licensed, trained and well respected financial planner. We have all heard horror stories where people have lost their entire savings because they put their faith in an unscrupulous “advisor.” Do your homework! A little work on the front end will pay huge dividends in the long run.

I’ve had a couple of different life insurance policies to protect my family. Do I need life insurance after I retire?

There are different needs for life insurance. When you were working, life insurance was primarily used to protect your income and make sure your family was taken care of financially, should you pass away prematurely. As you enter into retirement, there may or may not be the same needs. Some use it as a form of income. Some use it as a means to pay taxes upon their death and some simply need a plan to pay for burial costs. If you had an employer based life insurance plan, you need to look closely at the policy provisions. Many plans decrease the face amount of the policy starting at the age of 65. If you plan to use this, it may or may not be there. Also, many employer based life insurance plans can be converted to an individual plan, but are typically not cost effective. Discuss this with your agent to determine how this fits into your overall assets protection plan. Many people do not like to talk about this difficult subject, but it is important if you want to protect those assets you worked so hard to create.

There are many areas that need to be evaluated when retiring, but if you work with a trained individual or firm, they can help assist you in protecting your assets in the most cost effective way to protect your assets. Homework will be crucial and a thoughtful process will allow you to live the retirement life you hoped and dreamed for.

About the author:

Michael Clark is the Chief Executive Officer of Strategic Growth Insurance Associates Inc. He has held executive level positions at multiple health and life insurance companies, both on a regional and national level. His responsibilities included sales, account administration, pricing/actuarial services, State/Federal government contact and Public Relations.