Over 65 and Working

Today TaxMama hears from Mike in New York City who’s got this question. “If you’re 65 or older and still working, does it still pay to open an IRA and get insurance coverage in case of disability? I have neither.”

Hi Mike,

At your age, are you able to get affordable disability insurance? And how long will the policy pay out – a year, or for life?

Lifelong disability policies don’t come cheaply.

They also generally require a physical examination. Can you pass that? I couldn’t pass that physical when I was 30 – and I was in pretty good shape then, swimming daily.

Look at the cost of the policy and compare it to your expected risk of being disabled. You know more about your lifestyle, genetic risks and personal fears than anyone else.

And you know how long you’re expecting to live, based on your parents’ and grandparents’ lives and related health factors.

If you get disabled, for how many years will you need income?

Also, look at the income stream you currently expect to have at retirement.
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Will you need to supplement that income? If the cost is still worth it – get a policy.

As to an IRA? At this age, I’d probably try to fund Roth IRAs rather than regular IRAs.
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Keep working as long as you can – or want to – and keep putting as much money as possible into Roth IRAs. For now, select investments that will grow, rather than those that pay dividends. You can always change the investment mix when you retire and need a stream of income.

Of course, since I know nothing about you, your health, your present level of savings, whether or not you have any company pension plans or 401(k) savings or… it’s hard to give you the best possible advice.

If I were you, I’d sit down with a good financial planner and work out a retirement strategy. It will be worth your time.

And remember, you’ll find answers to lots of questions about retirement considerations and other tax information, free. Where? At TaxMama.com

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