For many of us, spring is a time of fresh starts, from spring cleaning to assessing the winter’s damage to our property and making plans for the growing season. Unfortunately, many of our best-laid retirement plans have suffered the ravages of two difficult winters.
People are starting to realize the importance of having a retirement plan that doesn’t rely too much on either high investment returns or the value of residential real estate. Guarantees backed by true financial strength may seem elusive, but they are, in fact, the basic, time-tested concept behind insurance companies. Similar to the way we prune plants and freshen closets, should we not also look at our retirement financial plan at least once a year?
If we agree with the common advice to rebalance a portfolio, we also should make sure that we have all the proper insurances in place and in the right amounts. And this should include a solid plan to pay for possible long-term care expenses.
Here are some things to consider in spring-cleaning your insurance program:
First, review what you pay for jewelry, antique and fine-arts coverage, especially for highly sentimental pieces—they cannot ever be truly replaced. It may not make a difference to your financial future if an heirloom brooch, for example, is lost or stolen.
Next, consider the annual premium expense closely for scheduled items on your homeowners coverage, and only carry those that make sense. If you are age 60 or older and own individual disability insurance, review your policy. Many policies will pay only a maximum benefit of 2 years for claims that start over age 60.
This is a great time to purchase long-term care insurance if you haven’t yet. Inflation overall has been very low for quite a while. Some say we can expect this to change. Long-term care insurance plans with guaranteed built-in inflation protection increase the amount of coverage year in and year out. Some clients are saying, “That’s the only thing in my plan that’s grown consistently lately!” Make sure that you understand if and how inflation is taken into account with your long-term care insurance plan.
Spring can be a time of rebirth for your retirement plan, when you make sure to take care of the big problem of how to pay for long-term care if it’s needed
Ross Perloe C.L.U., C.L.T.C.