At a glance:
- Purchasing income protection insurance allows retirees to pay for their living expenses without dipping into their retirement savings.
- Both retirees’ expectations and experiences of retirement and the factors that shape retirement have changed significantly in recent decades.
- Both retirees’ expectations and experiences of retirement, as well as the factors that shape retirement, have changed significantly in recent decades.
- Saving for retirement is made easier with income protection insurance.
Purchasing income protection insurance allows retirees to pay for their living expenses without dipping into their retirement savings or taking on debt. By doing this, they can preserve their retirement savings, allowing them to grow and compound over time, resulting in a larger nest egg in retirement.
Retirees can use this replacement income to pay their bills and expenses if they are unable to work because of illness or disability.
How is retirement different today?
In the wake of the existing economic situation, securing your retirement funds has become even more crucial. You never know what the world has planned for us, so it’s always better to be safe than sorry. In recent decades, both retirees’ expectations and experiences of retirement, as well as the factors that shape retirement, have changed significantly. Among the changes in retirement today are:
Changes in pension plans: Superannuation has emerged as one of the most significant changes in retirement today as defined contribution plans have replaced defined benefit pensions. In large part, retirement savings and investments are up to the individual, and the performance of their investments will predominantly determine their retirement income. For this reason, retirees are placed under additional pressure to understand their finances and make proper retirement preparations.
Rising costs: Retirement has also been impacted by rising costs of living, especially healthcare and aged care expenses. These costs, which retirees need to take into account when planning their finances, can significantly strain retirement savings.
Increased life expectancy: Medical advances and healthcare have enabled people to live longer, thereby implying that retirement lasts longer. Retirees must ensure that their savings are long-lasting, which requires more sustained savings efforts.
Delayed retirement: This is a common phenomenon, either because people work longer by choice or because they do not have enough savings to retire early.
Increased need for planning: Retirement savings can be significantly strained by the end of pensions, meaning numerous factors need to be considered, including taxes, healthcare costs, and lifestyle choices.
Impact of inflation on retirement plans and why you might need to consider income protection insurance.
Retirees face an increasingly difficult time maintaining their standard of living due to inflation. Hence, retirees may want to consider purchasing income protection insurance as part of their retirement planning.
This is primarily because income protection insurance provides a guaranteed income stream in the event of a disability or illness. This ensures that retirees can maintain their standard of living without having to worry about covering their essential expenses. Those without pensions and who are dependent on their savings for retirement may find this especially useful.
Financial security allows retirees to enjoy their retirement rather than worry about their finances. Inflation can also negatively impact retirees’ finances, which is another reason why income protection insurance can be beneficial. Retirees can preserve their purchasing power and take advantage of the rising cost of living by investing in income protection insurance.
Since premiums are generally tax-deductible, further tax benefits are available from purchasing income protection insurance. This will lower retirement costs and increase financial security.
Ultimately, inflation can make maintaining a standard of living in retirement increasingly difficult for retirees. Apart from providing a guaranteed income stream, income protection insurance can provide tax benefits and protection against inflation. Retirement planners can achieve greater peace of mind and financial security by purchasing income protection insurance.
What to consider before purchasing income protection insurance as part of your retirement plans?
Before retirement, it is imperative to evaluate your circumstances and determine the exact type of insurance coverage you need. Consider the following factors:
Expenses & Income: Identify how much insurance coverage you will require by considering not only your current income and expenses but also your expected retirement expenses.
Families: In the event of your accidental death or disability, insurance coverage may help provide financial support for your dependents, such as a spouse or children.
Debts and assets: Before deciding what kind of insurance coverage is appropriate for you, assess your assets, including savings and investments, as well as any debts you may have, including mortgages and loans.
Savings options: Ensure that your insurance coverage complements and enhances your overall retirement plan by taking into account other retirement savings options, such as superannuation and self-managed super funds.
Alternatively, speak with an expert advisor at Aspect. As a result, they can help determine what income protection insurance plan would work best for your unique circumstances.
Why purchase income protection insurance from Aspect?
Aspect is one of Australia’s leading income protection insurance providers – with a range of coverage options available to meet the needs of individuals and families. Aspect offers dependable income protection insurance for these reasons:
Comprehensive coverage
Aspect lets you choose from a variety of income protection insurance options that cover accidents, illnesses, and disabilities. Furthermore, they provide trauma, TPD, and accidental death coverage, which can be purchased separately or bundled together with income protection to provide comprehensive coverage. Consequently, you can provide coverage that best suits your needs while providing the greatest level of financial security.
Customisable policies
You can customise Aspect’s income protection insurance policies based on your specific needs. As a result, you can select the level of coverage that is right for you and ensure that you are properly protected.
Experienced team
As part of Aspect’s financial advisory and underwriting teams, underwriters are equipped with extensive knowledge of the insurance industry. This, in turn, lets them provide expert guidance and support.
Flexible claims process
With Aspect, you can get support fast and easily through our flexible and efficient claims process.
Reputable providers
Aspect has established itself as an established and reputable provider of insurance products in Australia thanks to a long and credible history of providing quality insurance coverage and excellent customer service.
Get a free quote from Aspect.
Contact our team of experts to find the right coverage for your needs and budget. Get a quote from Aspect today and take the first step toward financial security—contact Aspect to learn more. Income protection insurance from Aspect is a great way to ensure a secure financial future.
Mike Wallis
Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.
