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Home > If you were 47 and your SO was 57 and you *had* to pick just one....

If you were 47 and your SO was 57 and you *had* to pick just one....

December 3rd, 2009 at 03:41 am

which would it be...buying life insurance or catching up on retirement savings/investments? Really, let's say you just can't do both so you need to pick between getting life insurance of somewhere around $150,000 on each of you and using non-essential income for saving and investing.

The kids are grown, you're not big wage earners, you don't have a mortgage or much debt of any sort but you don't have much savings, either, and you don't have health insurance. You both have health issues that make health and life insurances difficult to find and expensive but you don't have enough money to pay for high insurance premiums and play catch up for retirement.

Which one would you pick? Or would you take a totally different path?? Come on, I know most of you are thinking something like, "But I'm not in that situation..." or "But I wouldn't find myself in that situation..." but we're pretending here.

Discuss amongst yourselves..but share with me, please. Enquiring minds really do wanna know. Smile

12 Responses to “If you were 47 and your SO was 57 and you *had* to pick just one....”

  1. gamecock43 Says:
    1259845143

    I have NO EXPERIENCE in this area and AM NOT AN AUTHORITY but I would pick long term care insurance (for if a nursing home/cancer/in home nurse is in the future)then life insurance that you can cash out if you need to...otherwise I would go with retirement accounts.
    BUT I have never researched these options- I know nothing.

  2. Caoineag Says:
    1259850172

    Catching up on retirement savings would be my priority but then this uses the assumption that either my husband or I could survive on one income (true in my household, may not be true in yours). Another reason I would do retirement savings is that without health insurance, your risk of bankruptcy goes up tremendously. Retirement savings you get to keep despite bankruptcy.

    Life insurance money is only available to spend once one of you dies. Just because you have medical issues doesn't mean you can't live for a very long time. Savings can be useful while you are both still living AND while only one of you lives. I like options.

  3. LuxLiving Says:
    1259851171

    Buy larger term life insurance (cheaper than you might think) on whichever of you is the bigger income earner, buy only enough term life insurance to get the other buried ($10-15 thousand) and invest the rest in retirement.

  4. Broken Arrow Says:
    1259856386

    Wow. That is a really good question. A really, really good one.

    By the way, are you talking about health insurance, life insurance, or both?

    Since you mentioned that you BOTH have health issues, I'm going to go with health insurance. To have health issues and not health insurance sounds like a recipe for disaster.

    If it's life insurance, I'm with Lux in that I don't think the policy needs to be a big one. After all, your kids are grown and your house is paid off. So, I imagine most of bills now are revolving living expenses.

    Throw everything else you have left into retirement savings.

  5. Ima saver Says:
    1259856833

    I would chose retirement savings. I had health insurance and wasted about $90,000 on it without ever getting a penny back. I dropped that and I also have no life insurance on either of us. I do have enough cash saved to live many years if needed.

  6. financeaholic Says:
    1259857300

    retirement savings. hands down Smile

  7. financeaholic Says:
    1259857422

    Caoineag makes a good point - even if you have to declare bankruptcy at some point (due to medical bills possibly), your retirement savings are exempted from inclusion in bankruptcy.

  8. CouponAddict Says:
    1259862027

    I would go retirement savings in your situation. Why do you feel the need for life insurance? Are you thinking that you would pay in less to get a larger return? How long do members of your family live? My family live into late 90's early 100's so better for me to save $ than insurance but you might have a totally different situation playing in your mind.

    I am thinking of increasing my life insurance but only because #1 I want to lock in insurance before I have health issues as my insurance is only through my employer (cant take with when I leave), #2 I have dependant children, #3 my child would go to my cousin to be raise if DH & I died and I want her to not feel like it is a burden financially to care for my son and finally #4 I have a Mortgage. Once items 1 through 3 are not longer an issues I will drop the insurance but for now I included #4 in the factor because my income pays for the mortgage and I have a child I want to put a roof over his head if something happens to me.

  9. DeniseNTexas Says:
    1259889403

    Thanks for the great input, yall! He already has a policy (universal, which was the best we could get with his health problems) for $15,000 and policies larger than that, for the most part, are simply too expensive. He's definitely the primary earner and we've already discussed how either of us could do without the other's income. It would be easier for him (he makes double what I do in a year) but I could manage on just mine.

    BA, we're talking about life insurance but we'd love to have health insurance too. Unfortunately, coverage for us both would come to about $800 a month. In a month or two I qualify for better insurance through my employer so that might be an option. In the meantime, we're simply uninsured.

    CouponAddict, the only reason we're thinking about life insurance is that Dave Ramsey and other gurus talk about what a necessity it is. We're not sure we agree with that or perhaps its simply a matter of having differing priorities than some. Replacing income isn't a goal in respect to life insurance for us so we aren't sure it's actually the necessity some make it out to be. As for the longevity of family members, my grandparents all died before their 70th birthday and my father was about 71. Most people in our family don't live past 70 or so but my mother is 73 and going strong.

  10. baselle Says:
    1259898563

    The rule that I heard is that life insurance is necessary only for kids to get them to adulthood should you die. If your children are grown or don't exist, then Lux's advice holds.

    Definitely get a list of *every* benefit your new workplace offers. I don't have life insurance (no kids), but I picked up a bit of AFLAC supplemental accident insurance - covers me as a pedestrian, bus commuter, at home, in the gym if I get smacked by a barbell.

  11. LuxLiving Says:
    1259944021

    If a person is relying on the other spouse's income to maintain a certain level of lifestyle regardless of children at home or not, and can't meet their obligations to uphold that standard of living on their own income capabilities then you look to replace the other spouse's income via life insurance.

    If, as in your case Denise, folks think they can maintain that lifestyle on one income alone, then the life insurance issue is a wash.

    You just don't want to come up having to sell your home or investments at a trying time in order to pay off a funeral bill, or to maintain the home after the primary breadwinnner's passing.

    But, for a small investment $15-20 a month (for $10-15K coverage) on each of your parts you can buy small term policies to get each other buried then it might be worth it. All other dollars then to go to catch-up retirement.

    Or you decide you'll cover burials out of other investment vehicles then I vote all dollars to catch-up retirement investing.

  12. DeniseNTexas Says:
    1260541452

    LL and baselle, I forgot to respond to you earlier. I'm sorry! I have a list of the benefits through my employer being sent to me and I'll peruse that as soon as I get it.

    We don't have a home right now that we'd have to sell so at this point that isn't an issue though it will be one if and when we buy another home, which seems unlikely with the 2007 foreclosure in our lives. DH really thinks we need life insurance on me too so we're looking into it. I think a small policy would be good but so far we can't find term for either of us. Universal is the best we can locate so far but we're still looking.

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