We always hear the paraphrase “nothing is certain in life except death and taxes,” but I think we can all agree that medical expenses could be added to that list. According to Fidelity, an average couple retiring this year is expected to spend $285,000 for medical expenses in retirement – and that’s out of pocket! This estimate doesn’t include the potential cost of long-term care, which can obliterate retirement savings without proper planning. Now that I’ve scared you (sorry!), let’s try to improve our financial plan and determine if a health savings account (HSA) could help!
If someone else financially depends on you, term life insurance can be an inexpensive way to transfer the financial risk of unexpected death – with the knowledge that your dependents will not lose your financial support. The substantial benefits from these policies can provide income replacement, pay off debt, and ultimately cover your family’s financial needs in your absence. This could mean that a spouse does not have to find additional work or sell the home to cover living expenses, among other sources of relief.
Most of us can agree that we should have an emergency fund. Some call it the rainy day fund or the “OH NOOOO!” fund, but we all have a basic understanding that each new day brings with it the possibility of sudden financial burden.
The purpose of an emergency fund is to cover unexpected expenses without going into debt. This means that your ability to borrow against your credit limit is NOT part of your emergency fund. Consumer debts like credit cards are an emergency in and of themselves.
The goal of this post is to help you turn your emergency fund into merely an “inconvenience” fund.