Money Guy Show Smart Money Moves: Life Insurance, Emergency Funds, and The Rule of 55
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Apr 21, 2025 Discover effective life insurance strategies for high earners facing health challenges. Learn how to balance finances during adoption with retirement savings. Find out how to navigate multiple retirement plans like 401(a), 403(b), and 457s for maximum benefit. Explore the Rule of 55 and its advantages for retirement funding with job transitions. Lastly, weigh the opportunity costs of further education against income potential, helping you make informed career choices. Get practical advice sprinkled with humor throughout!
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Life Insurance Strategy for Medical History
- If you have medical issues making life insurance expensive, maximize employer-provided coverage which often requires no medical underwriting.
- Consider a term policy only for the needed coverage term, like until financial independence, to manage premium costs.
Emergency Fund Comes First When Adopting
- Prioritize fully funding an emergency fund when adopting a child, even if it means pausing some retirement contributions.
- At minimum, keep contributing enough to the 401(k) to get the full employer match during this adjustment period.
Understanding the Rule of 55
- The Rule of 55 allows penalty-free 401(k) withdrawals if laid off in the year you turn 55 and you keep the money in that employer's plan.
- Contributions to solo 401(k) plans do not affect the Rule of 55, but rolling your 401(k) into another plan cancels this benefit.