As a retired construction worker you’ve spent your whole life building and creating things. You’ve mudded walls, you’ve butted joints, you’ve done slump tests and trussed until you couldn’t truss anymore. You’ve solved problems on a daily basis and created the dwelling and working places of so many people! You are a genius, right? And then you decide to retire, and this little “project” of going into retirement arises. The information thrown at you looks as though a drunk architect tried to draft a blueprint for you to follow. It can’t be that difficult, can it? When broken down into simple pieces, the “nuts and bolts” so to speak, retirement insurance isn’t that difficult to understand. Here are 3 things every construction worker approaching or in retirement needs to know:
1. As a retired/retiring construction worker, what do I need to know about health insurance?
With a career in the construction industry, you most likely had a couple of different options for health insurance over the years. You may have been the employee of a company that offered group health insurance. It was a benefit provided to you, paid for by your employer and a portion of your paycheck. Or, if you worked where a health insurance benefit was not provided to you, you may have picked up a private plan, or more recently a plan through healthcare.gov, otherwise known as Obamacare. Interestingly enough, of the 20 professions least likely to have health insurance, 11 of them are in the construction industry, according to MarketWatch. I am sure most of you have heard it once or twice from one of the crew: “Workman’s Comp. will cover me! I don’t need insurance!”
Well, now that you are a retired construction worker, it’s a whole new job site!
If you have yet to turn 65, and are not on your spouse’s health insurance, you will want to have someone help you navigate the marketplace to get an affordable care act plan in place. Keep in mind that these plans change every year, and your situation is different now that you are retired. The plan a professional can help you find might just actually be affordable!
If you, a retired construction worker, are Medicare eligible, having a professional guide you through this process is a must as well.
Anyone who turns 65 years of age needs to sign up for their Medicare part A benefits. If you are receiving your social security benefits, you will automatically be enrolled in Medicare part A and part B three months prior to turning 65. Most likely, your FICA taxes have already paid for part A of Medicare, and the premium for Part B will be deducted from your Social Security. If you are not receiving your Social Security benefits, you will need to go and sign up for parts A and B of Medicare at the Social Security office. In this case you will need to pay for your part B premium from a bank account. You can also complete your enrollment online at the Social Security website. Signing up should be done three months prior to the first day of the month that you will be turning 65. Note that Medicare itself is not full coverage. You will need a secondary insurance in place to help cover what Medicare doesn’t. Best of all, it’s not as complicated as you’d think!
2. As a retired/retiring construction worker, what do I need to know about life insurance?
In construction, it is often said that safety rules are needed to “protect the ignorant from what they don’t know, the idiots from themselves, and the innocent from the aforementioned two.” According to USA Today, five of the top twenty five most dangerous jobs in America have something to do with the tasks construction workers do on a daily basis. The conversation about life insurance was always there when you were working. Could you qualify at a reasonable rate based on the fact that your job was so dangerous? If you did qualify, you most likely had quite a high death benefit. You needed to protect your family if something were to happen to you. Many of you still have those policies in place. So, you’re still set, right?
Most policies with very high death benefits, $100,000 or more, are most likely term policies. A policy like this worked while you needed it: a high death benefit for a term. Term is the key word here. For example,a client of mine thought that his beneficiaries would get a significant death benefit no matter when he passed away. On closer look of his term policy, we found that the death benefit disappeared at age 70. His life insurance policy was not what he had thought it to be at all! Now that you are in retirement, a term life policy may not be enough. Most of my clients reevaluate their life insurance needs and get a whole life policy in place.
Another type of policy you and your fellow construction workers may have is called an accidental death and dismemberment policy.
This type of policy was a smart one to have when you were working. If you were killed in an accident while on the job (you know of many who have over the years) the policy would pay out a high benefit. The “Dismemberment” language of the policy might look something like this: “1. Loss of a hand means that all four fingers are cut off at or above the knuckles joining each to the hand; 2. Loss of a foot means that all of the foot is cut off at or above the ankle joint; 3. Loss of sight means one of the eyes is totally blind and that no sight can be restored in that eye…” These losses would pay out a benefit. Quite gruesome to some, but you have seen these things happen over the course of your career! Now that you are retired, do you really need this type of policy? Most retirees do not need to worry about losing a limb on the golf course, or becoming blind while fishing! Retirement insurance looks different. Make sure the policies you are paying for are still relevant!
3. What do I need to know about my investments?
With a career in the construction industry, you may have been fortunate enough to contribute to a 401k plan over the years. It was a benefit provided to you, possibly funded by your employer, and of course, a portion of your paycheck. Or, if you worked where this benefit was not provided to you, you may have saved and invested on your own. Either way, it was the end of a 50 hour work week, you came home and your statement was sitting in an envelope on the table. You opened it up, took a look, put it back in the envelope and shoved it in the filing cabinet. You repeated this quarterly for 25 plus years. Hey, that was ok. You were years away from retiring and using that money, so the volatility in the market really didn’t matter. Now you are a retired construction worker, and it matters very much!
In fact, we can look at planning for your retirement like building a house.
The first action you need to take is to have a blueprint. This should lay out exactly what your retirement should look like. Do you need an income stream to supplement your pension or Social Security? Is it important to leave a legacy? Do you have a balance between safety, availability and growth in your investments? Do you have an emergency fund just in case? Everyone’s blueprint is different and will need the correct tools and materials to make the house (or retirement) a reality. Should you use stocks and bonds? Mutual funds? CD’s? Annuities? Money managers? It all sounds a bit complicated, but an independent financial advisor who does comprehensive planning can make your blueprint into a “dream” retirement. You wouldn’t build a home without planning first, and your retirement should be no different!
I am sure during your career you saw a lot of “do it yourself” projects go horribly wrong.
Someone distraught called you to come “fix” plumbing that wouldn’t drain, doors that wouldn’t shut, electricity that wouldn’t work. You walked through noticing what should have been done differently to avoid these mistakes. If only these homeowners would have called you first, right?
The same is true for you now that retirement is a reality. Find a professional who can guide you in the choices you need to make along the course of your golden years. Many independent agencies can help guide you in your health and life insurance choices, as well as build a financial blueprint unique to your situation. After all, when it comes to retirement, you want to be able to say, “NAILED IT!”
If you would like further information on planning for or reevaluating your retirement, or simply want to chat, give Dylan a call at our Traverse City office at 231-421-7391.
Marc Hudson, Tim Alfieri, and Sara Hornick, investment advisor representatives of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. A Registered Investment Advisor located at 6020 E. Fulton St., Ada, MI 49301. Hudson Wealth Management is not affiliated with USA Financial Securities.