Preparing for your end of life can be a daunting proposition. No matter what age, mortality is a touchy subject for many. However, it’s important to take various factors into consideration at various times in your life to ensure that your final years aren’t too stressful. There is a common temptation to stall for time and put these considerations off until the 11th hour, but there are many reasons that you should confront this matter early and often. Here’s what you need to know.
For the uninitiated, life insurance is more or less exactly what it sounds like: a service that provides your loved ones with monetary compensation in the event of your death. It’s only natural that the idea of life insurance may be repulsive to some, but it’s no less important that you approach this matter with the appropriate level of consideration and a sound plan. Since you can technically never truly predict your time of death, there’s no telling when you’ll happen to need a life insurance policy, for one thing. However, the early and often mantra comes to mind especially in regard to participating whole life insurance.
Whole life insurance is exactly what you would expect, a life insurance policy that can persist indefinitely, provided that the monthly payments are made reliably. However, there is an additional benefit to this type of insurance plan. Much like the duration of a whole life policy is theoretically infinite, the amount of compensation your loved ones will receive also scales up over time with each payment made. This means that a whole life policy is much more effective when you start investing in it as early as possible, which also serves to protect your family in the event of your untimely demise.
On the other hand, a term life insurance policy has a finite duration, typically 10-30 years. This timeframe may be ample for certain policyholders, because the older you get, the less likely you are to outlive these policies. This makes elders the prime demographic for term life insurance policies, but the same can be said of those who work in dangerous fields such as military service or construction.
Another major consideration for your twilight years is retirement. As you age, you’ll be less suited to working day in and day out, so you will ideally retire from the workforce at age 55. However, this isn’t simply given to you, and it’s all too easy to delay or forgo retirement due to poor choices or simply from failing to seriously consider the problem beforehand. Starting a retirement fund is essential, and doing so as early as possible yields the best result. Like a whole life insurance policy, a retirement fund increases in value over time as you continue to invest money into it. However, there is also a key difference in terms of how a retirement fund typically works.
For example, a pension plan is one way to save for retirement, and it’s one in which your employer will invest money on your behalf to be contributed, with interest, to your retirement benefits. On the other hand, a retirement fund can be controlled entirely or in part by your own direct contributions, a process that can be automated so that your deposits are taken out of your earnings before you ever receive them, ensuring that you can’t easily avoid paying the cost and short changing yourself in the future. This option has the advantage of allowing you to avoid taxation in some cases or to defer taxation in others.
Preparing for your retirement and eventual passing is a heavy topic to get into, but doing so early is advised so that you can make the most informed decision and the decision that best suits your circumstances and your needs. This will not only ensure that you can live your best life free from worry, but can also protect you when and if the unexpected threatens your best laid plans.