Preparing for the Expected

As Teddy Roosevelt once observed, "Old age is like everything else. To make a success of it, you've got to start young." The challenges seniors have met throughout their lives have made them wiser and stronger, preparing them for the unique challenges that come with aging.

As we age, the potential for cognitive decline increases, ranging from simple forgetfulness to dementia. Long-term illness can sap time and energy from tending to your financial affairs in retirement. Even a decline in vision may make it harder to manage your financial affairs.

Fortunately, you can look ahead to help protect yourself and your family against the financial consequences of deteriorating health, and in many cases, insurance may play an important role. Let's examine some of the ways you can employ insurance to help protect your financial health.

Healthcare Costs

For some, healthcare costs represent a larger share of their budget as the years pass.

Recognizing this, you may want to consider Medigap insurance to cover the expenses that Medicare does not, which can add up quickly. You also might want to consider some form of extended-care insurance, which can be structured to pay for nursing home and home healthcare services—two services that Medicare doesn't cover.

Managing Your Wealth

The involvement you have with managing your investments may change as you age. For many seniors, that sort of day-to-day responsibility is unattractive and even untenable.

If that's the case, you may wish to consider what role annuities can play. Annuities can be structured to pay you income for as long as you live, relieving you of the concern of outliving your retirement money. Certain annuities even offer extended-care benefits, which allow you to address two concerns with one decision.

Transferring Your Estate

If you're like many seniors, you have a strong desire to leave something to your children, grandchildren, and perhaps a favorite charity. Through the use of life insurance, you can pursue these objectives. For example, life insurance can be used to create an estate or to equalize an estate transfer among your heirs. Insurance will never be able to prevent the health issues that come inexorably with age, but it can be used to mitigate their potential financial consequences.