There are certain financial moves it pays to make once you turn 50. For one thing, it's a good idea to increase your IRA or 401(k) contributions, as savers aged 50 and over are allowed to make catch-up contributions in these accounts. It's also a good idea to sit down with a financial advisor and make sure you're on track for retirement.
But if you don't already have a life insurance policy in place, you may want to add that to your list of must-dos at age 50. Not only is it not too late to buy life insurance at 50, but you may find that it brings you and loved ones a world of peace of mind.
You're not too old to get protection
The purpose of life insurance is to provide your loved ones with a financial benefit in the event of your passing. If you're truly on the cusp of retirement age without life insurance, you may decide to just skip it. After all, if your spouse is eligible for Social Security in a year, and you're both at an age where you can tap your IRA or 401(k) penalty free, then you may decide to just save your money instead.
However, when you're 50, there's still a pretty big gap between where you are and when retirement might begin for you and your spouse (assuming you're roughly the same age). So it's a good idea to buy life insurance to potentially bridge that gap for your spouse in the event of your passing. A life insurance policy might also come in handy if you have older kids whose college you're hoping to pay for in the coming years.
How much life insurance should you get at age 50?
The amount of life insurance you decide to buy at 50 should hinge on your personal circ*mstances. Let's say you know your spouse wants to wait until age 70 to tap your retirement savings and file for Social Security (that's generally considered the latest age to sign up and it gives you the maximum monthly benefit). It could pay to put a 20-year term life insurance policy in place so that if something happens to you during that time, your spouse would get a payout that enables them to be able to stick to their original retirement plans.
Also, let's say that at age 50, you have one child who's first starting college and another who's a junior in high school. You may decide to buy added coverage to pay for tuition in case you're not around to earn the money for it.
As far as the cost of life insurance goes, as you might imagine, you'll likely spend more for coverage in your 50s than you would've spent earlier on. Forbes Advisor puts the average cost of a 20-year, $250,000 term life insurance policy for a 50-year-old man at $487 a year or $41 a month. A 40-year-old man looking for that same coverage might spend $226 a year or $19 a month.
But if you can swing the cost of life insurance, it could pay to buy some at 50. It could really end up sparing your loved ones a world of financial stress. And it might give you the peace of mind you need to enjoy your 50s and beyond with less worry.
