Insurance Options In Retirement

Insurance and pension plans have fallen and there are limited options to choose from when it comes to live life comfortably in your old age. Contrary to youth, old age has different needs and thus customized retirement plans that help live without further hassle become mandatory. Our senior mortgage advice is not just about mortgages – but much more.

Retirement plans can be categorized as personal plans (life insurance policy, disability insurance, long-term care plans, health insurance, and critical care illness) government sponsored plans, annuities, and employer sponsored plans.

Let’s have a brief insight on them-

1- Personal plans-

Life Insurance: Okay, this one is a cliché & it costs you good money. Even when you had good policies saving you during youth, having a good life insurance in old age is the gateway to converting it into emergency funds, building assets out of it and still having a scope to have money saved for your dependants.

Health insurance: Depending on your budget and suitability, this one helps a real lot when you qualify for a premium subsidy.

Disability insurance: In case, you face any type of disability in your geriatric phase, this one serves you well by serving as an income replacement tool.

Long-term care illness insurance: Not most people consider this. But, long-term care comes handy when you really need long term care for your particular illness. Including nurses, caregivers, and others offering assistance with daily tasks, it works as a supplement to Medicaid, typically covering only medical-related activity. If you have enough assets to cover potential and typical home healthcare costs of $100,000 to $200,000, you may “self-insure” and not need long-term care insurance.

Critical care illness: Allowing you to cover additional costs associated with an illness, or use the payment for any other purpose during or after recovery, do not think that a need as such will not arise.

Disability insurance: Disability insurance guarantees that you still have cash, funds left with you. Covering your costs you can still save, invest, and be on your path for your retirement years.

Insuring yourself against personal liability is also important because there is no alternative to getting compensated for an accident caused by thyself.

2- Government sponsored plans-

The social security plan makes great retirement insurance for old age folks who want to receive government benefits.

3- Annuities: A set of monetary contracts established with an insurance company, fixed and variable annuities become your later age companions.

4- Employer sponsored plans:

Qualified plans, non-qualified retirement plans.

Qualified plans meet the IRC or ERISA requirements. These offer several tax benefits- they allow employers to deduct annual allowable contributions for each participant. Contributions and earnings on those contributions are tax-deferred until withdrawn for each participant and some of the taxes can be deferred even further through a transfer into a different type of IRA.

Non-qualified plans do not meet this criterion of qualified plans but still offer a great deal of options.

These are some of the basic retirement options that you can choose from.

Do not let what you cannot do tear from your hands what you can.

Mich Sneddon, CPA, CA

A Canadian Chartered Accountant and licensed Mortgage Professional – creator of Reverse Mortgage Pros – the #1 reverse mortgage specialists in Canada.  I make it my mission to educate Canadians about how reverse mortgages work so that you can make an informed and educated decision that’s right for you and your family.