One of the biggest surprises I’ve discovered in retirement is that many of the decisions we face aren’t really about money.
At least not entirely.
🎥 Watch the full video here
On the surface, they often look like financial decisions. Should I downsize? When should I take Social Security? Should I keep this expense or get rid of it?
But once you start digging deeper, you realize something else is going on.
Many retirement decisions are emotional decisions disguised as financial ones.
I was reminded of that recently when I found myself questioning whether I should keep my life insurance policy.
I’ve had the policy for years, and my daughter is the beneficiary. For most of that time, I never thought much about it. The premium got paid every month, and life went on.
Then one morning I found myself staring at my budget and asking a question I hadn’t seriously considered before:
Do I still need life insurance?
At first, it seemed like a simple question.
The more I thought about it, the more complicated it became.
Retirement Has Changed the Way I Think About Money
When you’re working, many financial decisions feel temporary.
If you make a mistake, there’s usually time to recover.
There’s another paycheck coming.
There’s another year to save.
There’s another opportunity to make adjustments.
Retirement feels different.
When you’re living on a fixed income, every recurring expense gets your attention. You start evaluating things you may have ignored for years.
I’ve noticed this in many areas of my life.
When I made the decision to downsize, I thought I was simply reducing expenses and simplifying my life. What I learned was that the decision involved far more than square footage and utility bills. Letting go of a larger home meant letting go of routines, memories, and expectations. If you’ve read my article on downsizing in retirement, you know it turned out to be as much an emotional decision as a financial one.
This life insurance question felt surprisingly similar.
The numbers were easy.
The emotions were harder.
What the Financial Experts Would Say
If you listen to many financial experts, the answer seems straightforward.
My daughter is grown.
I don’t have a mortgage.
I’m retired.
I’m not trying to replace income for a spouse.
From a purely mathematical perspective, I could make a strong argument for canceling the policy.
In fact, some experts would probably say that’s exactly what I should do.
And honestly, I understand their reasoning.
But retirement has taught me that there is rarely a one-size-fits-all answer.
I’ve seen that with Social Security as well. People often ask me the best age to claim benefits, but when I wrote about when to take Social Security, I realized there isn’t a universally correct answer. Every choice involves trade-offs, and the best decision often depends on the individual making it.
The same thing is true with life insurance.
The Options I Considered
Once I started thinking seriously about the policy, I realized I had several options.
I could keep it exactly as it is.
I could cancel it and invest the money instead.
I could cancel it and simply enjoy the extra room in my monthly budget.
I could take the cash value and give it to my daughter now.
Or I could take the cash value and keep it for myself.
The funny thing is that every option seemed reasonable.
One day I’d convince myself that investing the money was the smartest move.
The next day I’d think about the uncertainty involved.
Then I’d tell myself I should stop worrying about leaving money behind and focus more on enjoying retirement.
Then I’d change my mind again.
The decision kept circling back to the same issue.
What was I really trying to accomplish?
That’s when I realized the discussion wasn’t really about life insurance at all.
It was about legacy.
What Do We Leave Behind?
As we get older, I think many of us start thinking differently about what we’re leaving behind.
When we’re younger, we’re focused on building.
Building careers.
Building families.
Building financial security.
Retirement creates space to think about different questions.
What mattered most?
What impact did we have?
What will people remember?
Living alone has given me plenty of time to think about those kinds of things. In my article on The Power of Solitude, I wrote about how retirement often provides opportunities for reflection that many of us never had while we were working and raising families.
This life insurance decision brought many of those same thoughts to the surface.
Part of me wanted to leave something behind for my daughter.
Not because she expects it.
Not because she’s asked for it.
Simply because I’m her father.
I suspect many parents understand that feeling.
You never completely stop wanting to help your children.
Even when they’re adults.
Even when they’re doing fine on their own.
You still want to make life a little easier for them if you can.
Now, before anyone says it, I understand that legacy isn’t measured by dollars.
The time we spend with our children matters more.
The memories we create matter more.
The lessons we pass along matter more.
Love matters more.
I believe all of that.
At the same time, I don’t think it’s wrong to want to leave some financial help behind if you’re able to do so.
The two ideas can coexist.
Why I Ultimately Kept the Policy
After going back and forth for quite a while, I finally made a decision.
I decided to keep the life insurance.
Not because it’s the perfect financial answer.
Not because I think everyone else should do the same thing.
And certainly not because I think financial experts are wrong.
I simply realized that if I invested the money instead, I would still be committing those dollars every month.
The money would still be leaving my budget.
The difference would be certainty.
Keeping the policy gives me clarity.
I know exactly what my daughter would receive.
I know exactly what the outcome will be.
And as I’ve gotten older, I’ve come to value certainty more than I used to.
Retirement has a way of doing that.
When you’re younger, risk often feels exciting.
When you’re retired, peace of mind starts looking pretty attractive.
Retirement Decisions Aren’t Always About Money
If there’s one lesson I’ve learned from this experience, it’s that retirement decisions are rarely as simple as they appear.
What looks like a financial question is often an emotional one.
I’ve seen it with downsizing.
I’ve seen it with Social Security.
I’ve seen it with living alone.
And now I’ve seen it with life insurance.
The numbers matter, of course.
But they aren’t the whole story.
Sometimes the best decision isn’t the one that maximizes every dollar.
Sometimes it’s the one that lets you sleep well at night.
For me, that’s keeping the policy.
If you’re wrestling with retirement questions of your own, you might enjoy the Retired and Trying Companion. I created it for retirees and those approaching retirement who are trying to navigate many of the same questions we discuss here. It’s filled with retirement reflections, journal prompts, simple living ideas, and reminders that none of us are figuring this out alone.
What about you?
Do you still carry life insurance in retirement, or did you decide it was no longer necessary?
I’d love to hear your thoughts in the comments.