Woman helping elderly man

Planning for the expected

Share

The challenges seniors have met throughout their lives have made them wiser and stronger, preparing them for the unique challenges that can come with aging.

As we age, the potential for cognitive decline increases, ranging from simple forgetfulness to dementia. Long-term illness can sap time and energy from tending to your financial affairs in retirement. Even a decline in vision may make it harder to manage your financial affairs.

If you fit into this age group – or may soon – you can plan ahead to protect yourself and your family against the financial consequences of deteriorating health, and in many cases, insurance may play an important role.

Let’s examine some of the ways you can employ insurance to help protect your financial health.

Healthcare Costs

For some, healthcare costs represent a larger share of their budget as the years pass.

Recognizing this, you may want to consider Medigap insurance to cover the expenses that Medicare does not, which can add up quickly. You also might want to consider some form of extended-care insurance, which can be structured to pay for nursing home and home healthcare services—two services that Medicare doesn’t cover.

Managing Your Wealth

The involvement you have with managing your investments may change as you age. For many seniors, that sort of day-to-day responsibility is unattractive and even untenable.

If that’s the case for you, you may want to consider alternative forms of investment, including annuities. Annuities can be structured to pay you income for as long as you live, relieving you of the concern of outliving your retirement money.1 Certain annuities even offer long-term-care benefits, which allow you to address two concerns with one decision.

Transferring Your Estate

If you’re like many seniors, you have a strong desire to leave something to your children, grandchildren or perhaps a favorite charity. Through the use of life insurance, you can pursue these objectives. For example, life insurance can be used to create an estate or to equalize an estate transfer among your heirs.2

Insurance will never be able to prevent the health issues that can come with age, but it can be used to mitigate the potential financial consequences of them.

FOOTNOTES:

  1. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).
  2. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Need more insight? Let us be your guide.

Our national network of experienced financial advisors can help you create a personalized plan to help you identify financial goals and get you where you want to go in life.

Find an Advisor

Related Insights

End of year tax planning

2018 year-end planning checklist

Consider meeting with your financial advisor to discuss year-end planning strategies that make sense for your situation.

Read More
Man talking with hand gestures

Understanding long-term care

Is your financial plan ready should you need care on an ongoing basis? Long-term care insurance can help defray the costs of the medical and non-medical services you may need in retirement.

Read More
Woman showing document to clients

Assessing your life insurance needs

How much life insurance do you need to protect your family? Waddell & Reed Insights has some tips for determining the proper amount of coverage for your situation.

Read More

Associated Tags: Long-term care, Estate Planning, Succession Planning

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 FMG Suite.