What Happens When You Don't Protect Your Retirement?

John F. Kennedy once said, “The time to repair the roof is when the sun is shining.” We can’t wait for things to start going wrong to start a good plan.

Ethan and Natalie planned ahead, just not well enough.

They had both just begun their careers after grad school when Ethan finally proposed. At their parents’ urging they sat down with a fee-only, fiduciary, wealth advisor. The early planning allowed them invest a rather modest monthly amount and still plan on retiring around age 60.

They had planned well, just not well enough.

Four years later, they bought their first house. Two years after that, Natalie gave birth to a little girl. And a year after that, Ethan was hit broadside by a distracted driver. Ethan died on impact.

Natalie struggled, heart-broken and alone, with a baby to care for. She went back to work earlier than she planned making less than a quarter of what Ethan had. With help from family and occasionally draining the seven years’ worth of retirement savings, she got by.

But what about her retirement plans?

Despite thoughtful planning in her early twenties and disciplined saving and investing throughout Ethan’s life, Natalie joined the 31% of Americans with no retirement plan.

Two thirds of adults put off buying life insurance, because they think it will be too expensive.  But studies show they overestimate the cost by over two times.

A healthy 35 year-old male could get $1,000,000 in coverage at a fixed rate for less than $30 per month.

Had Ethan done that in his twenties, it would have been even less. Natalie would have been able to replace Ethan’s income with the interest paid off the life insurance benefit. She could have kept the house, and stayed home with her daughter as long as she needed. And she could have maintained the retirement plan she and Ethan had worked on and planned for.

Risk management is an essential element to an effective financial plan. You can plan better.


Shannon Caroland is a life insurance agent with Farm Bureau life insurance where he is an All-American and Life Elite agent, and member of the Multi-line Sales Council.