You’ve been working hard all your life to build that lump sum to retire with. What have you got planned? What does retirement look like to you? Traveling around the world? Or just around Australia? Buying that Shelby Mustang to work on or even just drive? Or is it as simple as just doing nothing? This might be what’s planned but what happens when life gets in the way?
Many young people just out of home would state that their ‘backup plan’ if something goes wrong is to return home. As a parent you want to help support your kids in every way possible but sometimes that means putting your life on hold to help them. Have you thought about what would happen if one of your children was seriously ill or have an accident that means they can’t work? If they’re single and renting, the easiest and most obvious open is to return home for care and reduced costs. If they have a home or family, the other option could be to help with mortgage repayments or stay with them to care for your child or even grandchildren. Or what happens if you have to become the principle carer for grandchildren?
So what happens to your dream of a cruise down the Nile? Well, you don’t have time or the money for that anymore. If only there was something you could do to prevent this happening to you and your retirement. Oh wait, there is! There are a number of options and most include insurance. The first point of call is to discuss this with your kids and remember that this is a conversation to protect you and your lives and not a reason to interfere with your kids lives (are you listening mum??).
They may already have measures or plans in place to ensure that if something unforeseen were to occur, they can get the help they need and stay on track financially. But if they don’t, that’s when you need to assist with the process. You want them to take out ‘going home’ as a option for their contingency plan. This may mean turning their old bedroom into a man cave or cinema room so there’s just no room for them or alternatively, you could discuss insurance with them. Talk about the types of insurances and what they each cover. Talk about who should have it and why.
Many young people feel they are ‘bullet proof’ or alternatively, aren’t earning enough to cover their own daily living bills let alone an additional cost for insurance cover and that’s where you might have to sacrifice some of your funds now to cover the costs until they can afford to take it over. Think of it as an insurance policy for your retirement rather than paying for your kids insurance policy. Alternatively, you could explain that some insurance policies can be established within superannuation to help fund some of the premiums. As they are young, the cost of insurance cover should be minimal – at least a lot less than you would have been or are paying for yourself.
- A 23 year old healthy non-smoking male, could expect to pay around $20 per month for $100,000 trauma insurance
- A 27 year old healthy non-smoking female could expect to pay about $60 per month for $3,200 per month indemnity income protection
- A 30 year old healthy non-smoking male could be paying around $25 per month for a $200,000 life and TPD policy.
Or you could pay for them to see a trusted Financial Planner to get a full and accurate assessment of their insurance needs and be in the best position to stop your kids from stealing your retirement dreams.