Are You Financially Covered In Retirement?
Imagine this.You’re retired. Your kids are self-sufficient and the house is paid off. There’s really no reason to continue carrying a life insurance policy, right? After all, life insurance is intended to replace lost income when the policyholder dies. If you’re no longer working, there’s no income to replace.
You might be a long way from retirement or your own parents are just reaching retirement age. Either way, you should read this.
Fixed income, but expenses continue to increase
The most important aspect is realising that you have a fixed amount of money in retirement. This amount is competing for many potential priorities. They may include a larger home, more travel, bigger inheritance, leave a safety net for medical expenses, and so on.
Your Employees Provident Fund (EPF) can be an important source of retirement income. However, with the current inflation rate, it may not be sufficient to finance your total retirement needs. What if you outlive your financial resources?
What type of retirement annuity plan suits you?
It is important to check all the options offered by various insurance companies before you buy the annuity plan that best suits your needs. If you are helping your parent to get the right plan for their retirement, it is also in your best interest to ensure they are sufficiently covered.
The type of annuity you choose and its benefits will determine the amount of income you will receive during retirement. You can choose to have your income paid every month, every three months, every six months or once a year.
If you have just entered working life, this is the best time to get started. You have time on your side to grow your annuity plan using the power of compounding.
When you start saving as early as possible during your working years, you have decades to build enough funds to provide you with a financially comfortable retirement. Even if you have other saving or investment plans that enables you to do so, it is still even more beneficial to purchase an annuity to help you financially through retirement.
