You’ve likely spent years—maybe even decades—saving for your retirement dreams. The road to retirement can be full of surprises, and sometimes, those can come in the form of an unexpected, long-term illness or injury.
Disability Income (DI) insurance for retirement helps make sure your dreams can still become a reality. It helps you continue contributing to your retirement savings if you’re unable to work, so you can focus on your health without worrying about future finances.
You may have heard of individual Disability Income insurance (or sometimes known as, disability insurance), which helps protect your income and pay your bills if you become too sick or hurt to work. You may even have a group long-term disability (LTD) insurance policy through your employer—which can be a good baseline, but it’s often not enough.
DI Retirement Security takes this protection one step further. If you can’t work because of a serious illness or injury, you’ll still be able to keep saving for retirement. A DI Retirement Security policy places money in a trust that you can access later as retirement income.
When your disability begins, the policy makes monthly deposits in a trust. These deposits are invested based on your risk tolerance. You can choose to have payments go to the trust until age 65 or 67. When you reach retirement, this money is paid to you in monthly installments.
The money that goes into the trust is income tax-free if you pay for coverage with after-tax dollars. But, keep in mind that any earnings you receive from the trust are taxable. Your coverage cannot be changed or canceled, except if you stop paying for it.
It’s easy to think that being out of work due to a disability “won’t happen to me”—but why risk it? Most long-term disabilities are caused by unexpected, yet common, illnesses, like cancer, heart conditions, and stroke, which can have long-term effects. Add in the steep medical bills that can accompany these conditions, and you may find yourself digging into savings—or retirement funds.
When you can’t work, you (and your employer) can’t continue contributing to your retirement plan. This could affect your retirement savings in a major way.
If you begin saving for retirement at age 30 and all goes well, you could save about $2.2 million by age 65. But if your health changes at age 40 and you can no longer work, your retirement contributions will likely stop, as will your growth potential.
DI Retirement Security helps ensure you won’t miss out on growing the money you’ve worked so hard for.
Visit our insurance help section, or call us at 800-986-3343.
Statistically, illness is why the vast majority of workers lose the regular income that keeps them afloat—things like cancer, bipolar disorder, and arthritis. Are you protected?
Disability insurance has exclusions and limitations. For costs and complete details of the coverage, contact your Principal Life representative. Oregon policy # HH750OR-2.
DI Retirement Security is issued as non-cancelable, guaranteed renewable, individual disability income insurance policy. It is not a pension or retirement program or a substitute for such a program. DI Retirement Security is not available for anyone who is over insured based on Principal Life’s current Issue and Participation guidelines. It may not be available or the benefit may be reduced for certain occupations if there is existing DI coverage with lifetime benefits. Additional underwriting guidelines may apply. DI Retirement Security is currently not available in California.
This information is provided with the understanding that Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Disability Insurance from Principal® is issued by Principal Life Insurance Company, Des Moines, IA 50392.
DI9966-01
