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A year and a half ago when everyone’s 401k’s had suddenly turned into 201k’s I threw out the suggestion that people buy 10 year term insurance as a way to kind of fill the bucket back up until things recovered.

Now true, it wasn’t an idea to fill your bucket back up, but rather your surviving spouse’s bucket. Now, if you had $10 million in investments for retirement and you lost half of that during the 2008 economic bowel movement, you could probably make a case for the idea that if you died, your wife could get by on the remaining $5 million. I’m thinking your wife might take exception to that line of thinking, but you could give it a whirl.

But that scenario isn’t the average American couple. The average American couple has saved something in the neighborhood of $100,000. That means retirement at all is going to be rough and if you lost half of that when the toilet flushed, even if you cut the number of people in half by kicking the bucket, the surviving spouse is going to be hurting.

When I suggested 10 year term life insurance, it was based on the fact that most of the “experts” believe that the economy will recover, eventually, to the point where it was before the fan got hit. But, if they’re right and it does recover to that point, you will have lost years of growth because, face it, recovering isn’t growing. So here’s kind of what I’m thinking these days.

Term insurance is still very affordable. If you are average and only have $100,000 socked away, consider buying $500,000 of term insurance and buy it for as long a term as you can comfortably budget. Face it. The way our country is going right now they may not even get the toilet clean from the last experience before it goes into use again. Instead of just barely getting your spouse back up to “average”, consider getting her to a point where she has a chance at a comfortable retirement.

Inflation is coming. Everyone believes it is and I don’t know enough about it to disagree. If it does, just getting your portfolio back to where it was isn’t going to cut it. Am I suggesting you buy more life insurance than you need? Absolutely not. I am suggesting that if you and your spouse have underachieved on savings and you don’t have a great plan in place to turn that around, there is a way to ensure that if only one of you is around to deal with it, they have enough money to do just that.

Bottom line. Americans are getting better at saving and we’re getting out of debt faster than ever (thanks to Dave Ramsey), but for most of us we started a bit late in life. I feel bad about that, but at least I can make sure my lack of planning doesn’t create an unfortunate situation if I check out early.