Inflation

Many people think of the need for market-based investments, such as stocks, bonds, and mutual funds, as a necessary protection against inflation in preparation for retirement. While these types of investments can be a very important part of a retirement plan, what happens if the market takes a dip a year or two before your retirement or, even worse, during your retirement? If this is a concern, there are life insurance products available that allow your retirement savings to take part in market gains, while protecting your savings and future income from market losses.

Taxes

Do you think taxes will increase or decrease in the future? Would you rather pay taxes on the money you are putting into your retirement savings while still working, or on the money you will pull out of your retirement savings during retirement? If taxes (or your income) end up being higher in retirement than they are now, your net retirement income is likely to be lower than what you are currently anticipating. To guard against potentially paying higher taxes during your retirement years, there are life insurance products that can protect you from having to pay any taxes on future retirement income.

Long-Term Care Needs

You may end up saving plenty of income to fully enjoy your retirement years only to see your nest egg quickly disappear because of a sudden change in your health that requires assisted living or a nursing home stay. Generally-speaking, neither health insurance nor Medicare will pay for these expenses, which can easily exceed six figures annually. However, there are life insurance products that can protect your retirement income from being eroded by long-term care expenses.

Outliving Your Savings

Life insurance is usually thought of as a product that is for the sole purpose of financially protecting your family or loved ones if you die too young; but what happens if you live too long? In other words, what if you outlive your retirement savings? Once again, there are life insurance products designed to protect your retirement income from ever running out, no matter how long you live.