Do Target Retirees Need Life Insurance?

And Target employees should consider life insurance as part of their retirement planning - to protect loved ones, pay off debts and leave a legacy - to give them financial security in their absence - says Tyson Mavar, representative of the Retirement Group, part of Wealth Enhancement Group.

Life insurance can give you peace of mind in retirement - protecting your family and your wealth from the unexpected - Wesley Boudreaux, of the Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. Life insurance for retirees - especially Target types.

2. Financial dependents, outstanding debt and savings are key factors determining life insurance needs.

3. The role of life insurance in securing a financial future and leaving a legacy for loved ones.

More than 60% of Americans who feel confident they understand life insurance are insured. Nonetheless, life insurance covers less than 20% of those who do not know about life insurance. See if life insurance is a good asset for retirees if you work for Target and are considering retiring. Life insurance buyers can get free price quotes from their preferred insurers before making a commitment. But, despite the variety and ease of getting coverage, more than two out of every three Americans say they lack adequate life insurance. Target employees must consider whether life insurance is necessary for retirement.

Financial Dependents:

Target employees with financial dependents must secure them at any age or position. A retiree with a spouse and children who depend on their retirement income might profit from an active life insurance policy. A full four in five (44%) American households would be broke within six months if the primary wage earner were to lose his or her job. More than a quarter (28%) would go broke in a month. The insured's dependents would not be left broke if they died; they would keep their income. 75% of Americans with life insurance say they would still feel financially secure if their main wage earner died. But only about half of uninsured Americans say they would be financially safe in such circumstances. And even though life insurance is commonplace, just owning a policy does not necessarily provide adequate protection.

More than 100 million Americans are underinsured or uninsured, according to estimates. Taken together, Target employees then need to determine how much life insurance they need. That depends on your standard of living, monthly contribution, overall financial position, and situation. Ideally, you would have enough life insurance to replace lost income on death. Even so, Target employees know that buying insurance beyond this scenario is possible - and it is your job to determine what coverage meets their needs.

Outstanding Debt:

Target employees with outstanding debt that passes to beneficiaries upon death should buy life insurance now. Around forty percent will leave a financial burden to a loved one. Life insurance would relieve your beneficiaries of financial responsibility should you die unexpectedly. For instance, you should buy a policy that lets you repay a mortgage loan. Should you be unable to pay off your mortgage on your own with your income, you may want to buy coverage at least equal to that amount. This way, Target employees can lock in the mortgage balance should they die.

Savings:

Target employees who have not left a substantial inheritance for their beneficiaries can buy life insurance as a supplement. As savings aren't restricted to cash account balances either, the prospect of buying a policy for hundreds of thousands of dollars for less than USD 100 a month might be tempting. Target employees should research insurance benefits, limits, and price ranges before purchasing to avoid overspending and understating.

A study by research and consulting firm LIMRA found that life insurance ownership among Americans age 55 and older has steadily increased over the past decade. In 2011, only 63% of this age group had life insurance coverage - by 2021, it was 70%. That shows more Target retirees realize life insurance can protect their heirs financially. The study also noted that reasons for getting life insurance in this age group included replacing lost income, paying for funeral expenses and leaving an inheritance.

Whether Target employees need insurance depends on their situation. If you have dependents and beneficiaries, life insurance could give them income when you die. Your buying life insurance could spare your family obligations that would have been passed down if you were in debt. A life insurance policy could be an alternative if you cannot save a large nest egg for your heirs. Target employees uncertain whether to buy coverage should seek professional financial advice. Get a free cash flow analysis when you contact The Retirement Group to see which option best fits your needs.

Now picture your retirement as a garden that you have grown over time. You've sodded the seeds of financial security and watched them grow into wealth. As a garden needs protection so does your retirement - and life insurance can put a fence around your financial legacy.

Consider life insurance like the evergreen hedges that preserve your garden. Like hedges protect your garden from outside dangers, life insurance covers your family from financial strain should you die. That way, your labors will continue to feed your family - giving them a source of income and paying off any debts you may have left behind.

As each plant in your garden has a purpose, so does life insurance in retirement. It may replace lost income, pay down outstanding debts such as a mortgage, or provide a substantial cushion for your beneficiaries. Sow in your financial garden and bolster it with the right life insurance coverage - and you plant a seed that will bear fruit in your absence.

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Also, as you consider retirement, plant a garden of financial security with life insurance. A well-tended garden brings joy and security, too - and so will life insurance - the assurance that your family and your legacy will thrive long after you retire from work.

Sources:

1. Rodeck, David. 'Do You Need Life Insurance in Retirement?' Investopedia , 22 June 2023, https://www.investopedia.com/articles/personal-finance/010716/do-you-need-life-insurance-after-you-retire.asp .

2. 'Life Insurance Statistics in 2025.' The Zebra , March 2024, https://www.thezebra.com/resources/research/life-insurance-statistics/?utm_source=chatgpt.com .

3. 'What is a Life Insurance Retirement Plan (LIRP)?' Aflac , 24 Aug. 2023, https://www.aflac.com/resources/life-insurance/life-insurance-retirement-plans-lirp.aspx .

4. 'Life Insurance Benefits for Retired Workers.' Bureau of Labor Statistics , Sept. 1990, https://www.bls.gov/opub/mlr/1990/09/Art2full.pdf .

5. '10 Reasons Why You Need Life Insurance in Retirement.' GBS Life , 15 June 2016, https://www.gbslife.com/media/28501/10-reasons-retirement.pdf .

What are the key benefits provided by Target Corporation's Personal Pension Account and Traditional Plan for employees approaching retirement, and how do these plans ensure financial security during retirement years? Understanding the synergy between these two plans is essential for retirees, as they work together alongside Social Security and personal savings to replace a portion of an employee's paycheck after retirement.

Key Benefits of the Personal Pension Account and Traditional Plan: Target Corporation's pension plan includes two components: the Personal Pension Account and the Traditional Plan. These plans work in tandem to replace a portion of an employee's paycheck during retirement. The Personal Pension Account provides pay credits and interest that accumulate over time, while the Traditional Plan uses a final average pay formula. Together with Social Security and personal savings, these plans help ensure financial security in retirement(Target Corporation_Dece…).

How can employees elect different payment options, such as the Single Life Annuity or the Joint and Survivor Annuities, within Target Corporation's pension plans? It is crucial for employees to grasp not only the financial implications of these choices but also the necessary spousal consent required when designating a joint annuitant, particularly if the chosen joint annuitant is not the employee's spouse.

Payment Options and Spousal Consent: Employees can elect different payment options, including the Single Life Annuity, which provides the highest monthly benefit and ceases at the retiree’s death, or the Joint and Survivor Annuity, which continues payments to a surviving spouse. To elect a non-spouse as a joint annuitant, spousal consent is required, and this must be notarized to ensure compliance with plan rules(Target Corporation_Dece…).

In what circumstances might benefits not be paid under the Traditional Plan, and what steps can employees take to ensure they remain eligible for their pension benefits upon termination of employment? Target Corporation's policy outlines several scenarios where benefits could be denied, making it necessary for employees to be proactive in understanding their rights and responsibilities concerning plan participation.

Circumstances for Denial of Benefits under the Traditional Plan: Benefits under the Traditional Plan may not be paid if an employee leaves before becoming vested (less than three years of service). Employees should ensure they meet the vesting requirements and maintain eligibility by avoiding termination before they reach the minimum service period(Target Corporation_Dece…).

What procedures should employees follow to report changes in marital status, address, or beneficiaries to ensure compliance with the requirements of Target Corporation's pension plan? Employees must understand the importance of timely reporting these changes to avoid potential issues with their retirement benefits and ensure that their pension plan information remains up-to-date.

Reporting Changes in Marital Status or Beneficiaries: Employees must promptly report changes in marital status, address, or beneficiaries to Target's Benefits Center to ensure their pension records remain up-to-date. Failing to do so can lead to delays or issues in processing pension benefits(Target Corporation_Dece…).

How does Target Corporation determine the final average pay used to calculate retirement benefits under its pension plans, and what factors may affect this calculation? Employees nearing retirement should be fully informed about how their compensation is considered in determining their pension benefits, including aspects such as bonuses and overtime that may influence their final average pay calculation.

Final Average Pay Calculation: Target Corporation calculates final average pay based on the five highest years of earnings out of the last 10 years of service. This includes regular pay, overtime, bonuses, and commissions but excludes items like workers' compensation or long-term disability payments(Target Corporation_Dece…).

How can employees begin the process of rolling over their Target 401(k) accounts into the Pension Plan, and what advantages does this Pension Purchase Program offer? Understanding this rollover option is vital for maximizing retirement benefits, as it can provide employees with a stable income stream while avoiding unnecessary fees typically associated with purchasing annuities outside the plan.

Rolling Over 401(k) into the Pension Plan: Employees can roll over their 401(k) accounts into the Pension Plan using the Pension Purchase Program. This option offers several advantages, including avoiding fees associated with purchasing annuities outside the plan and receiving a stable income stream during retirement(Target Corporation_Dece…).

What are the implications of a participant's age and joint annuitant's age on the payment amounts under the various Joint and Survivor Annuity options at Target Corporation? Employees should be aware of how age differences can impact their pension payouts, as the specific percentages payable under these options may vary based on the ages of both the participant and their designated joint annuitant.

Effect of Participant and Joint Annuitant’s Age on Payments: The Joint and Survivor Annuity options are influenced by the ages of both the participant and the joint annuitant. The younger the joint annuitant, the lower the monthly payout due to actuarial adjustments. Employees should consider these factors when selecting an annuity option(Target Corporation_Dece…).

How are retirement benefits managed during potential plan terminations or amendments at Target Corporation, and what protections are in place for employees in these scenarios? Employees should be well-informed regarding their rights in the event of changes to the pension plan, including how benefits would be distributed and under what circumstances they may remain fully vested.

Plan Terminations or Amendments: In case of plan terminations or amendments, vested benefits are protected, and employees will receive their earned pension. If the plan is amended or terminated, Target ensures that vested benefits are distributed according to the plan's terms(Target Corporation_Dece…).

For employees retiring or leaving Target Corporation, what options are available with respect to unused vacation time and how might this be factored into pension calculations? Understanding how accrued time off translates into benefits could have a significant impact on an employee's financial positioning upon retirement.

Unused Vacation Time and Pension Calculations: Unused vacation time does not directly affect pension benefits but can be included in eligible earnings calculations that determine final average pay. Employees nearing retirement should consult with Target’s Benefits Center to understand how unused time may impact their overall benefits(Target Corporation_Dece…).

How can employees contact Target Corporation for assistance with their retirement benefits to address any questions or concerns they may have about their pension plans? Accessing the right resources and support is essential for employees to navigate their retirement benefits effectively. They can reach out to the Target Benefits Center at 800-828-5850 for more specific inquiries related to their personal circumstances. These questions aim to enhance employees' understanding of their retirement benefits, ensuring they are well-prepared for their transition into retirement.

Contacting Target for Pension Assistance: Employees can contact the Target Benefits Center at 800-828-5850 for assistance with their retirement and pension plans. This center provides support with any questions related to pension options, payments, and administrative requirements(Target Corporation_Dece…).