The rising cost of health care in the United States has become one of the primary risks to a financially secure retirement. With health care costs expected to continue increasing faster than inflation, the time to plan for your future health care needs is now—before you retire. Here are some things you’ll need to plan for:
Long-term care services: Are you familiar with the variety of long-term care servicesavailable? If it becomes necessary, what type of services would you prefer? How will you pay for them? Have you looked into long-term care insurance?
Advance directives: Have you communicated your medical care wishes in the event you suffer a catastrophic medical event? Have you named someone else, a spouse or other family member, to make medical decisions for you in the event you are incapacitated?
Paying for health care in retirement: Do you know what your out-of-pocket health care costs might be after you retire? Are you aware that Medicare, while it covers many health-care costs, has significant limitations? Are you familiar with the various types of insurance that can help pay health and long-term care costs not covered by Medicare?
If you would like assistance in planning for your health-care needs in retirement, contact you agent or advisor. 909-593-8923
4. Automate your emergency fund.
While not as fundamentally critical as the above tips, this will probably have the most impact on your day-to-day life. Everyone one of us runs into unexpected events that are costly—a major car repair, a leak in the roof, a job loss … the list, as you know, can seem endless. To give yourself peace of mind and bit of cushion, set aside a certain amount each month—it could be $50 or $500, depending on your financial situation—and have it automatically deposited into your savings account. If it’s easier to track, you could even keep it in a separate account. Then it becomes a no-brainer, because that money isn’t there for you to spend. In a year, if you chose one of the above amounts, you could have $600 or $6,000 stashed away!
These tips will set you on the path of ensuring that if the unforeseen happens, you and your family will be OK financially. And what’s worth more than your peace of mind?
3. Don’t skip disability insurance.
Many people aren’t really familiar with what disability insurance is and what it does. Basically, it replaces a portion of your income if you’re unable to work due to a disabling illness or injury. Why is that important? Think about how long you could make ends meet—pay rent or the mortgage and all your monthly bills if your paycheck suddenly disappeared. At Ernest Dorado Insurance found that a majority of those who work wouldn’t make it more than a month before they’d have to make some serious financial sacrifices.
So, how do you get it? Your employer may offer disability insurance coverage through a group plan. If you’re not sure, contact your HR department or benefits manager to find out what kind of coverage you have (if any). If you don’t have coverage or need more than is offered through work, buying your own disability insurance policy is worth considering. Unlike group coverage, privately owned insurance stays with you even when you change jobs.
Also keep in mind that most people overestimate what the government will pay or cover if something were to happen. According to the National Safety Council, 73% of long-term disabilities are a result of an injury or illness that is not work-related and therefore wouldn’t qualify for Workers’ Compensation. And if you were hoping for Social Security disability benefits, know that about 45% of those who apply are initially denied, and those who are approved receive an average monthly benefit of around $1,100, which would leave you living at about the poverty level.
2. Review your life insurance beneficiaries.
Would you like your ex-spouse to get your life insurance if something were to happen to you because you forgot to change the beneficiary on your policy? Would you like the money to get tied up in court because you named your minor children as the beneficiaries? These are missteps that happen more than you think. Add to that the fact that people may have more than one policy—for example one through the workplace (a group policy) and one that they bought individually.
This is exactly the type of thing that a life insurance agent or advisor can help you with. And it won’t cost you anything to talk to them about it. Plus, if you’ve gone through tip #1, they can double check that the amount of coverage you came up with meets you needs. Also, it’s honestly a lot less hassle to have someone who knows what they’re doing help you out, and isn’t that what we’re trying to achieve here—get it done?
In the next couple of weeks we will be discussing the 4 Tips to keep your family safe!
It’s tough to get our financial house in order, not because it’s especially hard, but because it’s … boring? Tedious? The last thing we want to spend time on? To remedy that, here are four tips that you can take on and accomplish:
1. Make sure you have life insurance—or enough of it.
Do you really need life insurance? Well, answer this question to find out: Would your loved ones suffer financial if something happened to you? If the answer is yes, you need life insurance. Then comes the question, how much? There are a number of factors that go into calculating how much life insurance you might need. But it doesn’t have to be difficult. If you already have life insurance, then contact us today to make sure you have enough!
And don’t let cost—or actually perceived cost—stop you from getting coverage. Did you know that 80% of people overestimate how much life insurance costs? And those under 25 think it’s four times more expensive than it actually is. Let’s frame it this way, say you’re 30 and in good health, a 20-year level term life insurance policy with $250,000 of coverage may cost around $13 a month. That’s the equivalent of a few Starbucks drive-through lattes. Here are a number of ways you can get coverage or search for an agent if you don’t have one.
People buy life insurance because they love someone and want to protect them financially.
Life insurance is love insurance, which makes February—the month of love! The Insure Your Love campaign, coordinated by Dorado Insurance Services.
It allows you to bring emotion or humor into a conversation that is usually serious or dry.
February and Valentine’s Day is a perfect time to protect the ones you love through proper life insurance planning. But keep in mind, love is eternal, making the Insure Your Love appropriate all year long.
We will be Educating in the next couple of days, Stay Tuned!!!