With $1M in my 401(k) and 5 years to retirement, I’m unsure if canceling life insurance leaves my wife protected

If you’ve reached your status savings goals, should you inactive support your beingness security policy?

Take the hypothetical lawsuit of Bob. He present has $1 cardinal successful his 401(k) and, astatine property 57, inactive has 5 much years earlier helium wants to retire.

As the superior breadwinner successful his household, Bob wants to guarantee that his wife, 55, volition person capable wealth to unrecorded comfortably if helium were to walk distant earlier she does. His woman is the superior beneficiary connected his 401(k).

Currently, Bob is paying astir $150 a period connected his beingness security policy. However, if his woman inherits his 401(k), helium wonders if she would inactive request the security payout. They don’t person immoderate kids, truthful he’s not definite if helium should support making those monthly premium payments.

• Thanks to Jeff Bezos, you tin present go a landlord for arsenic small arsenic $100 — and no, you don't person to woody with tenants oregon hole freezers. Here's how

• Dave Ramsey warns astir 50% of Americans are making 1 large Social Security mistake — here’s what it is and 3 elemental steps to hole it ASAP

• I’m astir 50 years aged and person thing saved for retirement. What bash I do? Don’t panic. Here are 6 casual ways to drawback up (and fast)

Life security is often recommended if idiosyncratic financially depends connected you, specified arsenic spouses, children oregon aging parents. But if you person capable wealth saved up for retirement, you whitethorn wonderment if you should trim oregon cancel your coverage.

Before doing so, see your full fund — present and successful retirement. Do you inactive person owe payments? How overmuch are your household expenses? And however overmuch indebtedness bash you have?

If you inactive person a hefty owe oregon different debt, specified arsenic recognition paper debt, idiosyncratic loans, car loans oregon pupil loans, you’ll privation to guarantee your loved ones person capable wealth to screen those expenses if you were to abruptly walk away. However, adjacent without those liabilities, it whitethorn inactive beryllium worthy keeping your insurance.

While Bob has $1 cardinal successful his 401(k), would his woman person capable to unrecorded comfortably if helium were to walk distant tomorrow?

She’s 55, truthful she could unrecorded different 40 years. While she would person immoderate Social Security benefits successful retirement, the mates has to see whether that, combined with 401(k) withdrawals, would beryllium capable to screen expenses and permission capable to unrecorded off.

As a spousal beneficiary, Bob’s woman could instrumentality a information of the 401(k) arsenic a lump sum. While this withdrawal would beryllium penalty-free, it’s taxed arsenic regular income, which could effect successful a hefty bill. She could besides rotation the inherited 401(k) implicit into her ain 401(k) oregon IRA, if she has one.