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Personal Insurance

Insurance: An Important Financial Tool for Retirement Planning

February 1, 2022

While most of us look forward to retirement, financial planning for those years is tricky. Not only do you need to consider at what age you will retire, but also how long you will live. How do you plan for that?

While most people who are 65 today can expect to live into their mid-80s, according to the Social Security Administration (SSA), one in three will live beyond 90. One in seven will live beyond 95. How long will your savings last?

Another consideration is what will happen if you are no longer able to take care of yourself at some point. Could you afford in-home support or live in the type of assisted living facility you would choose for yourself? Traditional health insurance and Medicare don’t cover these options.

Two financial retirement planning tools are available to protect your lifetime income and help put you in control if you ever need care not covered by your health plan: annuities and long-term care insurance.


Investing in an annuity provides the account owner with an ongoing revenue stream. There are two types: deferred and income.

With a deferred annuity, the investor puts money into an account and accumulates income on the investment. The income generated exceeds that which a savings account or CD would generate, and tax isn’t paid until the account owner begins withdrawing funds—typically after retirement when the annual income (and income bracket) is smaller.

An income annuity begins paying immediately once the account owner makes the investment. This type of account pays the owner as long as he or she lives, no matter how long that is. The principal, however, cannot be touched, and the amount of income generated can fluctuate over time.

Long-Term Care Insurance

According to the U.S. Department of Health and Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care service during his or her lifetime. These could include things such as assistance with bathing and dressing at home, enrollment in adult day care, or living in a facility that cares for those with Alzheimer’s or other chronic diseases.

Most people who purchase this insurance do so when in their 50s or 60s; only people who have not developed a serious medical condition are eligible. Pricing varies for this type of insurance, depending on whether you choose long-term care insurance only or long-term care plus life insurance. The premium also can change yearly.

Next Steps

Planning for all aspects and possibilities of retirement is complicated, and there are pros and cons related to all of these decisions. Working through it while you are healthy and relatively young, though, will yield the most and best options. For more information, visit our resource center. If you would like to talk about annuities or long-term care insurance, you can reach me at to set up a call. I am here to help.

Authored by

Nick Chupack

Nick Chupack

Personal & Small Business Life Insurance Mgr

Nick helps individuals and small businesses navigate the complexities of life insurance, disability, long-term care, annuities, health insurance, Medicare and group benefits. He has earned Life Underwriter Training Council Fellow and Certification for Long-Term Care designations.

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