If you built your financial plans five, ten, or more years ago, you may find upon close examination, that they no longer fit your life today. Whether from outside circumstances such as market fluctuations or outlooks to internal changes such as approaching retirement, or changes in your family situation, any risk analysis you may have done in the past may not be relevant today.
It’s a given that as humans get older, their priorities change. Carefree youth is for building a career and spending money, whereas with middle age, priorities such as children (and their college funds), charity donations, post-retirement life, and protection for one’s estate for heirs loom larger on the horizon. For this reason, it’s wise to engage in a new round of risk management for your finances to ensure that your strategy matches your life as it is now.
First, Update You Will
We believe that roughly every five years, legal documents such as a will/living will and healthcare proxies should be reviewed. It is important that the wishes outlined in your will correlate with your beneficiary designations of certain assets. Even if you have a living trust in place, a properly set up will is going to help the trust function properly. If there has been a significant change to your finances, relationships, or property, it’s likely time to visit your attorney to get everything up to date.
Update Your Life Insurance
Life insurance needs to change as we get older. For many of us, a small policy – often through one’s employer – is sufficient for our needs. Later, we may turn to term life policies that are generally affordable, though they are not permanent. Ideally, older Americans should be looking for permanent insurance policies that will last their entire lifespan as long as the premiums are paid. These policies often come in the form of universal, variable, variable universal or whole life, and have cash value with a rate of return, and in most cases, the death benefit will never change.
Consider Disability Insurance
As we get older, the chances that we’ll be out of commission for either the short term or the long term due to health issues become greater. You may wish to pick up a short-term disability policy that will pay benefits for three to six months in case of accident, injury, or illness. With these policies, you can often have the majority of your earned income paid directly to you with no restriction on expenses.
Long-term disability insurance offers an important benefit for those who may be at risk of losing the income they need to survive financially because of permanent illness or injury. These benefits are typically 40 to 70 percent of the policyholder’s income. Long-term disability can be purchased with different elimination periods, and for durations usually stated in years. Some policies will pay until retirement.
What to Know About Long-term Care Insurance
As the population lives longer than ever, chances are greater that we could live to the point where we require others to care for us. Many people mistakenly believe that programs like Medicare will pay for long-term care. (It will not.) Medicaid may cover long-term care, but only after your assets have been reduced to near zero. For this reason, it may be wise to entertain a long-term care policy to avoid exhausting our assets and placing the burden of care onto loved ones. Long-term care insurance is a policy that helps pay for the costs associated with long-term care, either at home or in a care facility. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.
Talk to a Professional
Toomey Investment Management, Inc. is a Wallingford, Connecticut-based financial advisory company that offers clients risk management services as well as asset protection.
At TIMI, our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients but much less to service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your financial situation and solve your problems. Call us at 203-949-1710 or visit our website for more information.