When thinking about retirement planning, the focus naturally turns to investments, savings strategies, and market performance. But there’s another piece of the puzzle that may get less attention, but often plays a critical role in protecting all you’ve worked for: Insurance.
If you’re used to associating insurance with worst case scenarios, reframing your mindset may help you want to prioritize having the right policies for you. Think of insurance as a tool to help keep your long-term plans on track, even when life doesn’t go according to plan. As retirement gets closer, it’s worth taking a step back to evaluate where gaps may exist.
Reviewing Long-Term Care, Disability, and Supplemental Coverage Gaps
One of the most common assumptions we see is that Medicare will cover most healthcare needs in retirement. Medicare is an important foundation, but it does not typically cover long-term custodial care. Unless you have family on board to provide care, it’s important to consider how you will cover possible expenses related to nursing home needs, assisted living stays, or help with daily living activities. These costs add up quickly and without a plan, you may wind up drawing down retirement assets faster than expected.
Long-term care insurance is one option to help address this gap, but timing and policy structure matter. Evaluating your coverage options earlier rather than later can provide more flexibility in both cost and eligibility. The cost of long-term care insurance does lead many to self-fund these costs. The key here is to understand what the potential expense could be and ensure it’s factored into your retirement plan.
Disability insurance is another area often overlooked. If disability insurance isn’t part of your employer’s benefits package, do you know what you’d do if you were no longer able to work due to injury or illness? While it may feel less relevant as retirement approaches, these final working years are often peak earning years.
In addition, supplemental coverage such as dental, vision, or hospital indemnity plans can help manage routine and unexpected expenses. While these costs are often not significant individually, every expense should be considered in an all-encompasing budget and insurance plan.
How Insurance Planning Protects Assets and Peace of Mind
At its core, insurance is about protecting you and your assets. Without the right coverage in place, you are up against unexpected withdrawal, tax implications, and a disruption to your long-term investment strategy.
The peace of mind that comes with having insurance is hard to quantify. Even if you have the funds, spending them during a stressful or unexpected situation is still not easy. Instead of scrambling to figure out how to pay for care or manage a sudden expense, insurance can provide a welcomed framework for how you’ll handle the decision at hand.
This level of clarity can bring a sense of confidence, not just for you, but for your family as well. Knowing there’s a plan may help reduce uncertainty and may make it easier to navigate life’s transitions.
When to Adjust Policies as Life Stages Change
Insurance policies are not something you research once, set and forget. As your life evolves, your coverage should evolve with it.
Approaching retirement is a natural checkpoint. At this stage, it may make sense to reevaluate policies that were originally designed to protect income during your working years. For some, this could mean reducing or eliminating certain types of coverage, such as disability insurance, once that income risk is no longer present.
At the same time, other considerations may become more relevant. Long-term care planning often becomes a more prominent conversation in your 50s and 60s, and healthcare-related coverage changes for nearly all retirees as they transition to Medicare.
Changes in your personal life also matter. Paying off a mortgage, becoming empty nesters, or experiencing changes in health are all meaningful triggers to revisit your policies. Even shifts in your overall financial picture, such as reaching certain savings milestones, can influence how much coverage is appropriate.
A simple way to stay on track is to review your insurance coverage every three to five years. These reviews don’t need to be complicated, but they can help ensure your protection remains aligned with your current goals and priorities.
Bringing It All Together
Insurance may not be the most exciting part of financial planning, but it plays a quiet and important role behind the scenes. Insurance supports the work your investments are doing, helps manage risk, and provides a layer of stability as you move closer to retirement.
Taking the time to review potential gaps, understand how coverage fits into your overall plan, and adjust as life changes can help create a more complete and resilient financial picture.
If you haven’t revisited your insurance coverage recently, this can be a great place to start. A few thoughtful updates today can make a meaningful difference in how prepared and confident you feel about the years ahead.
About Foundation Wealth Management
Foundation Wealth Management is a CPA-led organization that provides financial planning
services and tax planning support; services and outcomes vary based on each client’s
circumstances. Our team includes qualified professionals, such as CPAs and CFP®s, who
are integral to our service offerings. Our team includes 3 Certified Financial Planners: Burt
Hutchinson, CPA, CFP®, Paul LaViola, CFP®, and Stephen McDade, CFP®.
As fee-only financial planners, we are compensated directly by clients rather than through
commissions from brokerage or insurance products, which we believe helps align our
services with client goals.
Disclosure Statement:
This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax, or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice. All investments are subject to risk, including the possible loss of principal.
The client scenarios presented in this blog are entirely fictional and created solely for illustrative purposes. Any similarities to actual persons, entities, or events are purely coincidental and unintentional.
Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, Past performance is not a guarantee of future results.
