I have some friends who developed a wonderful estate plan for their kids that involves the purchase of a large survivorship life insurance policy. However, because of today’s lower interest rates, the projected premiums on their policy have increased significantly. That means some of the money they were putting into a 529 plan might have to be diverted to pay those rising premiums.

This raises a common question about future legacy vs. finding money for shorter-term needs: Which one should take priority? (They are both important; there will have to be some trade-offs, but thoughtful planning can lead to less disruption than you might assume.)

You could describe this as a problem for the 1%, but most of us — not just our estate planning friends — need income for legacy planning, gifting, bucket list items or essential living expenses, and we need to address these potential retirement income gaps either now or in the future.

Retirement Income Gaps