Insurance a guard for retirement funds

May 13, 2011

Insurance can be a guard for one's retirement funds

Many families may find their retirement savings account to be healthy enough to support their lifestyle after work, but if an incident requires them to tap into that account as a source of emergency income, they could soon find their retirement savings depleted.

That's why retirement expert Jonas Roeser suggests consumers consider insurance that would cover their medical or health-related expenses in the event that they need long-term care. If a family member requires the costly care, it could be tough for workers to resist tapping into their 401(k) to pay for expensive health treatments and daily care. Long-term care insurance - which consumers can sometimes find as a supplement to life insurance - may provide them with the security they need to keep their retirement account healthy.

"If you don't have long-term care insurance, you're in effect self-insuring, and your retirement money will most likely take the hit," said Roeser.

The scenario could become especially costly if a family needs to finance a loved one's stay at a long-term care facility. A report from MetLife showed monthly costs for an assisted living center totaled $3,293 in 2010.

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