Retirement in 1975 meant a gold watch or some other trinket and a check in the mail every month. That was 40 years ago and I suspect if you look far enough you can find people that still retire like that, but the new retirement norm is a whole different scene. And with that new scene comes a new consideration for life insurance.
Now we have the retire and find another job retirement plan. This is either because the retirement fund, 401k, IRA, etc that we so dutifully socked away money in since we settled down and got a real job isn’t worth boo today. And there is this restless need to have a life style that matches our new 60’s health. We now have CEO’s in need of key person business life insurance at age 80. It used to be that we could retire in our 60’s and our health was already starting down that slippery slope and even if we retired in our 60’s, living past 75 was not the norm. Today at that age we are still active, traveling, hiking, golfing, waiting in line to be on Dancing with the Stars or…..working. So, if we are going to keeping working and playing and the life style is dependent on working it should make some sense that we should carry life insurance to replace that lost income if we happen to die before we reach that point where, like my parents did, we sit around with the TV on, the sound off, and do nothing.
The good news is that when we were young and raising children and really didn’t have any money saved, our need for life insurance was much larger than it is in our 2nd or 3rd career. Houses are paid off and way down. Children are self sufficient or they’ve bought into the fact that we are old, retired and penniless. So where we used to need $500k to $1 million of life insurance just to keep our family fed if we died early, often our spouses can make things work with $100k to $250k. Sometimes the life insurance need is no more than bridge money to settle things and get on with their life. They’ll have whatever net worth we leave behind, plus social security and enough life insurance that if we are still carrying a mortgage or debt, it can be paid off.
Bottom line. Where the norm used to be letting life insurance, except for possibly a small final expense policy, lapse once we retired, the new norm is to revisit the need and make sure you haven’t left a gap in your planning as we continue to work. If you have questions about how to determine a way to address life insurance needs in our 60’s and 70’s, call or email me directly. My name is Ed Hinerman. Let’s talk.