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Insurance costs a factor in older Americans’ budgets

Financial planning is crucial for retirement and older folks can find ways to funnel more money to savings

Adults have myriad things to consider when approaching retirement age. In today’s economy, many are focused on their nest egg savings and wonder if they have enough stowed away to live comfortably during their golden years.

In fact, a recent survey conducted by consulting firm Watson Wyatt revealed that older workers are increasingly concerned about their retirement security – much more so than just two years ago.

“Retirement security is a huge concern as individuals have seen significant amounts of their pension and retirement savings decline,” said David Speier, senior retirement consultant at Watson Wyatt.

“And the financial crisis has been especially damaging to older workers who are worried about potential job losses and have experienced higher stress levels over the past year,” he noted.

On top of evaluating savings needs and working to ensure proper investments are in place, older Americans must also consider their insurance needs.

One way to funnel extra savings into retirement investment accounts is to look for discounts on auto insurance policies.

According to the Insurance Information Institute, older drivers are eligible for discounts on their auto insurance plans for a variety of reasons.

Americans over 55 years of age are considered to be less aggressive drivers by most insurance companies. Given their tendency to slow down and abide by traffic rules, the Insurance Information Institute suggests that insurance companies may be likely to give cash back for drivers in that age bracket.

Although many older drivers are considered to be extra cautious, most are also though to experience a deterioration in reaction time, vision and even hearing that could result in trouble on the road.

By enrolling in and completing driving improvement classes or defensive driving seminars seniors could be eligible for discounts on their coverage plans. While it is one way to save money, in some cases it is the only way to retain a license. Insurance companies operating in many states need to insure safe drivers are on the road or a policy may not be renewed.

A MSN Money article published late last year suggested that seniors are overpaying on their insurance plans by millions of dollars collectively by not taking advantage of these discounts.

These discounts may come in handy when seniors are forced to fork over cash to pay for any number of accidents that happen with old age and require medical attention.

Industry experts recently opined in the news publication MarketWatch that older Americans are not properly preparing themselves for long-term healthcare costs or the possibility of disability.

In fact, Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, was cited pushing for seniors to buy more property, life, auto, disability and long-term care insurance to protect against late-in-life mishaps.

Looking at the nuances of insurance for seniors, particularly auto coverage, provides a nice contrast to the steps a parent takes to insure a teenage driver.

New drivers, unlike seniors, are typically penalized by insurance companies for their lack of driving experience and tendencies to take risks and drive fast. Because they are inexperienced with different driving conditions and traffic scenarios, teens tend to get into more accidents and pay higher premiums.

But young drivers are also eligible for discounts. Some insurance companies offer policy discounts based on school grades or the successful completion of a driver training course. And even though young adults might prefer a trendy new car, the Insurance Information Institutes says the type of car a teen drives can affect rates.

Learn how easy and convenient shopping for auto insurance can be. Get your free auto insurance quotes today!

Posted: June 04, 2009

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