Retirement Savings Are Not Emergency Funds…

According to this Barron’s article, retirement accounts have become the new “emergency fund” for more and more people.

Due to economic factors and prolonged inflation, there was a 28% increase in people taking hardship withdrawals from their retirement funds in 2023. Barron’s says that one of the top reasons for the increase was to cover medical bills. That means people are paying taxes and penalties on their hard-earned savings to pay for necessary medical expenses., effectively delaying their ability to retire.

I’m writing this to let you know that there are better, more effective solutions to this issue…if you plan ahead.

Here’s How You Can Avoid Falling Into This Trap

Solution #1: Long-Term Care (LTC) Insurance
Genworth estimates that the cost for a private bedroom in an assisted living facility will be $96,681 by 2031. LTC offers policyholders coverage for any in-home or assisted living expenses in the event that you or a family member are unable to complete a majority of basic daily activities. LTC policies allow you to pay for this with discounted dollars.

Solution #2: Cash-Value Life Insurance
Cash Value Life Insurance is a tax-efficient vehicle for individuals to save money in a tax-deferred account that can be drawn on in a non-taxable event if structured properly. If put in place early enough, life insurance policies can provide an emergency fund that will relieve you from having to pull from your retirement accounts and paying taxes/penalties. Also, certain permanent life insurance policies offer advanced death benefit riders which allow you to begin receiving your death benefit to help pay for medical expenses if your terminally or critically ill. 

Hopefully this insight will allow you to better evaluate your current long-term financial planning. Life insurance has a bad stigma – but when it’s done right, it can have a major impact on the lives of you and your loved ones.

You can email me at with any questions!

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