Broadly speaking, resilience is the ability to recover from adversity. It’s important in every aspect of life, including your finances, and especially during retirement. You can’t control all the circumstances that might shake your financial stability, but you can take steps to help improve your financial resilience in retirement, and life insurance is one of those things.
To start, let’s look at some of the issues that make resilience so important during retirement. Topping the list are healthcare costs and medical emergencies. It’s no secret that as you get older, your healthcare needs increase. What some people don’t realize is that healthcare inflation outpaces the general inflation rate by a huge margin.
That’s bad enough, but if a major medical event or other unexpected accident or emergency hits you during retirement, it can rapidly drain your savings. If you’re not prepared, you may end up recovering physically, but not financially. This issue only gets more challenging as you get older. That’s why it is essential that you have the right insurance plan in place for your situation.
For example, you could quickly run out of money in retirement if you need long-term care and don’t have a plan to pay for it.
According to the 2023 Genworth Cost of Care Survey, the average annual cost of care in an assisted living facility was $57,288. The annual cost of a private room in a nursing home is over $115,008.1
There are several insurance strategies that can help you be financially prepared in the event that you do end up needing long-term care. Options include getting a long-term care insurance policy, a hybrid life insurance policy that will pay out if you need long-term care, or a longevity annuity.