How much life insurance after FIRE?

Den26 · 09-01-2008, 02:06 PM

How much life ins $ is necessary after early retirement, age 57? I currently have mortgage paid in full, approx 100K in IRA's, no debt, kids grown & out, and a government pension indexed to inflation. Is 50K adequate, or 100, or more?

growing_older · 09-01-2008, 02:11 PM

Anyone who you need to support? Any estate tax trickery you want to make sure larger pile goes to next generation? If none of these, then probably no life insurance needed.

Meadbh · 09-01-2008, 02:17 PM

If you have a cottage that you want to pass to your children, it may generate large taxable capital gains. In this case a life insurance policy could be used to pay the taxes.

If there are no nasty financial surprises for any loved ones when you die, or if there are no loved ones, life insurance premiums are money down the drain.

harley · 09-01-2008, 02:20 PM

I've still got my old 30 year term life policy in place ($500K) because I got it 10 years ago, it's cheap, and as Growing Older says, it's a good way to bypass estate taxes. In reality there's no real insurance need for it. If you are truly FI you don't need to replace income, thus no life insurance needed.

**Khan** · 09-01-2008, 03:24 PM

None.

(Well, 2 $1000 (free) ones from organizations I belong to).

megacorp-firee · 09-01-2008, 04:13 PM

Quote:

Originally Posted by Den26

How much life ins $ is necessary after early retirement, age 57? I currently have mortgage paid in full, approx 100K in IRA's, no debt, kids grown & out, and a government pension indexed to inflation. Is 50K adequate, or 100, or more?

If you don't have any one reliant upon you for support then the easy answer is ZERO. The balance of your portfolio should be enough to pay for burial expenses... if not then go ahead and get a small policy to cover that ... if you are really worried about it.

Gardnr · 09-01-2008, 06:58 PM

Do you have a spouse that needs to be provided for if you die?

Is there a survivorship provision in your pension; and if so, how much? If there's not, or it's only 50% or so, then you clearly need some life insurance if you spouse has no income means of his/her own.

Den26 · 09-01-2008, 07:35 PM

Thanks for all the responses. I do have a survivor benefit, and it appears that my life ins is a bit of an overkill, so I think it's time to cancel that. Spouse is eligible for SS in her own right, and I want to provide for her, BUT I don't think it's necessary to make her rich.

youbet · 09-01-2008, 10:22 PM

Quote:

Originally Posted by Den26

BUT I don't think it's necessary to make her rich.

Have you discussed that with her?

harley · 09-01-2008, 10:36 PM

Quote:

Originally Posted by Den26

Spouse is eligible for SS in her own right, and I want to provide for her, BUT I don't think it's necessary to make her rich.

I've found that it's important to walk a fine line with insurance. Don't let the spouse get the idea you are worth more to her dead than alive!

Den26 · 09-02-2008, 04:10 AM

Quote:

Originally Posted by harley

I've found that it's important to walk a fine line with insurance. Don't let the spouse get the idea you are worth more to her dead than alive!

That's how it is at this point in time.

chinaco · 09-02-2008, 04:59 AM

Life insurance is to guard against a financial loss doe to death (generally speaking). When you die, is there a loss of income (e.g., you dies and DW is left with less income) or large expenses that will be incurred (e.g., taxes).

It is not uncommon to at least have final expenses (i.e., burial) covered if that extraordinary cost presents a financial burden.

Here is a recent link that discusses the subject... not so much insurance, but planning. Retirement -- Financial Planning for the Survivor.

OAG · 09-02-2008, 06:30 AM

None except a small ($8K) burial - cremation policy which does not cost any premium from a company that specializes in military assistance after the veteran's death. Other than that I see no need for it.

Canadian Grunt · 09-04-2008, 01:05 PM

Unless one spouse has a pension that cannot be commuted and there would be a substantial loss of income to the surviving spouse I don't see any advantage for an early retiree to be insured for death, unless they wanted to leave their kids a guaranteed inheritance. Costs would outweigh the benefits.

FinanceDude · 09-04-2008, 01:15 PM

Quote:

Originally Posted by Den26

Thanks for all the responses. I do have a survivor benefit, and it appears that my life ins is a bit of an overkill, so I think it's time to cancel that. Spouse is eligible for SS in her own right, and I want to provide for her, BUT I don't think it's necessary to make her rich.

Keep in mind while BOTH of you are alive, you get TWO SS payments, when you die, she loses hers if yours is higher, or vice versa, so the money drops. Also, most pensions, even yours, has a substantial drop in monthly amount to the survivor, normally 50% of what you were getting.

09-01-2008, 02:06 PM	#1
Den26 Dryer sheet wannabe Join Date: Jun 2007 Posts: 23	How much life insurance after FIRE? How much life ins $ is necessary after early retirement, age 57? I currently have mortgage paid in full, approx 100K in IRA's, no debt, kids grown & out, and a government pension indexed to inflation. Is 50K adequate, or 100, or more?

09-01-2008, 02:20 PM	#4
harley Full time employment: Posting here. Join Date: May 2008 Location: MD's Eastern Shore Posts: 841	I've still got my old 30 year term life policy in place ($500K) because I got it 10 years ago, it's cheap, and as Growing Older says, it's a good way to bypass estate taxes. In reality there's no real insurance need for it. If you are truly FI you don't need to replace income, thus no life insurance needed. __________________ "A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort." DW and I - FIREd at 50, two years ago, living off assets

09-01-2008, 03:24 PM	#5
Khan Moderator Join Date: Aug 2006 Location: Greater Dayton area Posts: 3,411	None. (Well, 2 $1000 (free) ones from organizations I belong to). __________________ "Candle wax and red wine can do interesting things to a keyboard."

09-02-2008, 04:59 AM	#12
chinaco Thinks s/he gets paid by the post Join Date: Feb 2007 Posts: 2,996	Life insurance is to guard against a financial loss doe to death (generally speaking). When you die, is there a loss of income (e.g., you dies and DW is left with less income) or large expenses that will be incurred (e.g., taxes). It is not uncommon to at least have final expenses (i.e., burial) covered if that extraordinary cost presents a financial burden. Here is a recent link that discusses the subject... not so much insurance, but planning. Retirement -- Financial Planning for the Survivor. __________________ Disclaimer: I make no warranty or guarantee about the accuracy or completeness of this information. I am not a financial planner, my comments only represent my opinion.

09-02-2008, 06:30 AM	#13
OAG Thinks s/he gets paid by the post Join Date: Jun 2006 Location: Dublin, Ohio Posts: 1,927	None except a small ($8K) burial - cremation policy which does not cost any premium from a company that specializes in military assistance after the veteran's death. Other than that I see no need for it. __________________ Proud Vietnam Veteran: Cu Chi 66, 1 Bde, 25ID & Pleiku 66-67 41st Sig Bn 1st STRATCOM - Army Retired Jun 1979.

09-01-2008, 02:11 PM	#2
growing_older Recycles dryer sheets Join Date: Jun 2007 Posts: 430	Anyone who you need to support? Any estate tax trickery you want to make sure larger pile goes to next generation? If none of these, then probably no life insurance needed.

09-01-2008, 02:17 PM	#3
Meadbh Thinks s/he gets paid by the post Join Date: Jul 2006 Posts: 1,644	If you have a cottage that you want to pass to your children, it may generate large taxable capital gains. In this case a life insurance policy could be used to pay the taxes. If there are no nasty financial surprises for any loved ones when you die, or if there are no loved ones, life insurance premiums are money down the drain.

09-01-2008, 06:58 PM	#7
Gardnr Recycles dryer sheets Join Date: Jul 2008 Location: ENE MO - near STL Posts: 377	Do you have a spouse that needs to be provided for if you die? Is there a survivorship provision in your pension; and if so, how much? If there's not, or it's only 50% or so, then you clearly need some life insurance if you spouse has no income means of his/her own.

09-01-2008, 07:35 PM	#8
Den26 Dryer sheet wannabe Join Date: Jun 2007 Posts: 23	Thanks for all the responses. I do have a survivor benefit, and it appears that my life ins is a bit of an overkill, so I think it's time to cancel that. Spouse is eligible for SS in her own right, and I want to provide for her, BUT I don't think it's necessary to make her rich.

09-04-2008, 01:05 PM	#14
Canadian Grunt Recycles dryer sheets Join Date: May 2007 Location: Edmonton Posts: 197	Unless one spouse has a pension that cannot be commuted and there would be a substantial loss of income to the surviving spouse I don't see any advantage for an early retiree to be insured for death, unless they wanted to leave their kids a guaranteed inheritance. Costs would outweigh the benefits. __________________ it's the journey that matters

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