Near-government shutdown sheds light on retirement planning

May 09, 2011

A near shutdown for the federal government is an example for seniors planning for retirement

When lawmakers' bickering over the federal budget nearly led to a government shutdown last week, retirees should have taken notice, said a report.

Many government employees wouldn't have been able to collect a paycheck had the government ceased operations, reported U.S. News and World Report, mirroring the plight of many retirees faced with a dearth of income. The report says workers can learn from lawmakers' mistakes by planning early for their drop in income, saving early on in a number of diversified accounts so they have money to draw on once they stop working.

In addition, retirees need to be prepared for when things go wrong - similar to how government employees should have been ready for the possibility of a work stoppage. A term life insurance policy can ensure retirees are protected if the unexpected happens - such as an untimely death.

Permanent solutions, such as a well-managed budget, are always a better move than temporary band-aids, the report added.

In the end, the government was able to seek an extension to work out the budget woes, said the report. Retirees are not afforded that type of leeway, raising the importance for a well-planned retirement strategy backed by a life insurance policy.

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