Are the AARP benefits and discounts worth the yearly membership cost?
"Note: this answer was provided when the question was only about Life Insurance, therefore it does not address any other ""benefits"" Term Life Insurance is very easy to evaluate, once you have determined how much you need and for how long. For significant amounts of coverage they may require a physical to be performed. The price quotes will be for  two levels of health, so you can compare costs from many companies quite easily.  You have several sources in no particular order: employer, independent company, 3rd party like AARP, AAA, or via you bank or credit union. Note that the 3rd party will be getting a cut of the premium. Also some choices offered from the employer or 3rd party may be limited in size or duration. The independent companies will be able to have terms that extend for 10 years or more. So view the insurance offered by AARP as just another option that has to be compared to all your other options." It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage.
"Buy term and invest the difference is certainly the standard recommendation, and for good reason. When you start looking at some sample numbers the ""buy term and invest the difference"" strategy starts to look very good. Here are the rates I found (27 yr old in Texas with good health, non-smoker, etc): $200k term life: $21/month $200k whole life: $177/month If you were to invest the difference in a retirement account for 40 years, assuming a 7% rate of return (many retirement planning estimates use 10%) you would have $411,859 at the end of that period. (If you use 10% that figure jumps to over $994k.) Needless to say, $400k in a retirement account is better than a $200k death benefit. Especially since you can't get the death benefit AND the cash value. Certainly one big difficulty is making sure you invest that difference. The best way to handle that is to set up a direct deposit that goes straight from your paycheck to the retirement account before it even touches your bank account. The next best thing would be an automatic transfer from your bank account. You may wonder 'What if I can no longer afford to invest that money?' First off, take a second and third look at your finances before you start eating into that. But if financial crisis comes and you truly can't afford to fund your own life insurance / retirement account then perhaps it will be a good thing you're not locked into a life insurance policy that forces you to pay those premiums. That extra freedom is another benefit of the ""buy term and invest the difference"" strategy. It is great that you are asking this question now while you are young. Because it is much easier to put this strategy into play now while you are young.  As far as using a cash value policy to help diversify your portfolio: I am no expert in how to allocate long term investments after maxing out my IRA and 401k. (My IRA maxes out at $5k/year, another $5k for my wife's, another $16.5k for my 401k.) Before I maxed that out I would have my house paid for and kid's education saved for. And by then it would make sense to pay a financial adviser to help you manage all those investments. They would be the one to ask about using a cash value policy similar to @lux lux's description.  I believe you should NEVER PUT YOUR MONEY INTO SOMETHING YOU DON'T UNDERSTAND. Cash value policies are complex and I don't fully understand them. I should add that of course my calculations are subject to the standard disclaimer that those investment returns aren't guaranteed. As with any financial decision you must be willing to accept some level of risk and the question is not whether to accept risk, but how much is acceptable. That's why I used 7% in my calculation instead of just 10%. I wanted to demonstrate that you could still beat out whole life if you wanted to reduce your risk and/or if the stock market performs poorly." Here's a different take:  Look through the lists of companies  that offer shareholder perks. Here's one from Hargreaves Lansdown.  See if you can find one that you already spend money with with a low required shareholding where the perks would actually be usable.  Note that in your case, being curious about the whole thing and based in London, you don't have to rule out the AGM-based perks, unlike me. My reason for this is simple: with 3 out of 4 of the companies we bought shares in directly (all for the perks), we've made several times the dividend in savings on money we would have spent anyway (either with the company in which we bought shares or a direct competitor).  This means that you can actually make back the purchase price plus dealing fee quite quickly (probably in 2/4 in our case), and you still have the shares. We've found that pub/restaurant/hotel brands work well if you use them or their equivalents anyway. Caveats: It's more enjoyable than holding a handful of shares in a company you don't care about, and if you want to read the annual reports you can relate this to your own experience, which might interest you given your obvious curiosity. "Let's not trade insults. I understand defined benefit plans better than you think. Of course offering a lump-sum payout NOW is better for the company. If you think of the lifetime value of the pension, then yeah, it's ""worse"" for the recipient... but exactly like lottery winners, this is just a question of my personal discount rate. Maybe I want/need that money now, and value it more now than I would in 10/20/30 years. So it's a question for each individual to decide." I am in the process of writing an article about how to maximize one's Social Security benefits, or at least, how to start the analysis.   This chart, from my friends at the Social Security office shows the advantage of waiting to take your benefit. In your case, you are getting $1525 at age 62.  Now, if you wait 4 years, the benefit jumps to $2033 or $508/mo more. You would get no benefit for 4 years and draw down savings by $73,200, but would get $6,096/yr more from 64 on. Put it off until 70, and you'd have $2684/mo.  At some point, your husband should apply for a spousal benefit (age 66 for him is what I suggest) and collect that for 4 years before moving to his own benefit if it's higher than that.  Keep in mind, your generous pensions are likely to push you into having your social security benefit taxed, and my plan, above will give you time to draw down the 401(k) to help avoid or at least reduce this. Just to make this a little less vauge, I will base everything on the Mercedes Benz American Express (MB AMEX) card, which is the closest to a $100 annual fee I found on American Express's website. The benefits of a card with an annual fee generally are worth the cost if (and only if) you spend enough money on the card, and avoid paying interest to offset the benefit.  Using the MB AMEX card as a reference, it offers 5X points for Mercedes Benz purchases, 3X points at gas stations, 2X points at restaurants, and 1X points everywhere else.  Even if we only make purchases at the 1X rate, it only takes charging $10,000 to the card in a year in order to make up the difference.  Not too hard to do on a card someone uses as their main method of payment.  Every dollar spent at the higher rates only makes that easier. There are a number of other benefits as well.  After spending $5,000 on the card in a year, you receive a $500 gift card towards the purchase of a Mercedes Benz car.  For anyone on the market for a Mercedes Benz, the card pays for itself multiple times with just this benefit. Here are the advantages to the HDHP/HSA option over the PPO option, some of which you've already mentioned: Lower premiums, saving $240 annually. Your employer is contributing $1500 to your HSA.  As you mentioned, this covers your deductible if you need it, and if you don't, the $1500 is yours to keep inside your HSA. The ability to contribute more to your HSA.  You will be able to contribute additional funds to your HSA and take a tax deduction. Besides the medical expenses applied to your deductible, HSA funds can be spent on medical expenses that are not covered by your insurance, such as dental, vision, chiropractic, etc.  Anything left in your HSA at age 65 can be withdrawn just like with a traditional IRA, with tax due (but no penalty) on anything not spent on medical expenses. With the information that you've provided about your two options, I can't think of any scenario where you'd be better off with the PPO.  However, you definitely want to look at all the rest of the details to ensure that it is indeed the same coverage between the two options.  If you find differences, I wrote an answer on another question that walks you through comparing insurance options under different scenarios. Absolutely!  Just because a spouse doesn't have a taxable income, doesn't mean they aren't providing real, tangible benefit to the family economy with an important job. As tragic as it is to consider losing your spouse, are you truly in a position to replace everything they do you for you?  Knowing what they do for you and appreciating the effort your spouse gives is important, but don't sell short the dollar amount of what they provide.  Your life insurance policy should be to keep you whole. Without your spouse, you will need childcare.  You might need domestic services to the home.  What about a nanny or similar service?  Would $50K cover that until your child is an adult?  There are a number of added expenses in the short and long term that would occur if a spouse died.  How much for a funeral? Obviously you know the amount and term depends on the age of your kid.  But I think you should really try to account for the number of daily hours you spouse puts in, and try to attach a cost to those hours.  Then buy insurance for them just as you would for a wage earning.   For example, buy a policy that is 10x the annual cost for services it would take to compensate for your spouse.  Your tolerance for risk and cost can adjust it up and down from there. At sixty, you are in a different generation, where at least early on loyalty was rewarded. I sit between the x and y generations, and never have I ever felt a sense of loyalty FROM an employer. We all know the score, they'll fire me in a heartbeat if it helps the quarterly numbers, and I'll bail if I can get a better deal elsewhere. I only stick it out if the deal is good, or I don't want to have to explain a short tenure on.my resume. I'm not gonna tough it out with a struggling company if they can't give me my market value, because I know they'll kick me to the curb if I'm in need. There really is no loyalty anywhere in the system anymore, unless your a sucker. Loyalty MUST go both ways, and employers are the ones who gave up on it. The big benefit of a health savings account is the savings aspect. HSAs let you save up and invest money for your health care expenses. You don't just pay for medical care with pretax dollars - you get to invest those pretax dollars (possibly until you've retired). If you can afford to put money in the plan now, this can be a pretty good deal, especially if you're in a high tax bracket and expect to remain there after retirement. There are a lot of obnoxious limitations and restrictions, and there's political risk to worry about between now and when you spend the money (mostly uncertainty about what the heck the health insurance system will look like after the fight over ObamaCare and its possible repeal.) I'm guessing it depends on how much you'd be paying for membership. If you save more than the membership costs you and you actually use the products you buy and they don't get thrown away, then it's worth it. I'm not a member of a warehouse club but I do have a membership for another wholesale outlet, so I know a little bit about buying in bulk.  You need to take the same approach to buying goods wholesale as you would in an ordinary outlet, and do a few more things besides. Things like writing a list and sticking to it, making that list logically, so that you minimise the amount of time you spend walking around the shop. The less you see, the less you are likely to buy. Don't be taken in by offers, it's only a bargain if it's something you would have bought anyway. Don't shop on an empty stomach or with you children. And with bulk buying, you have to stick to things with long dates, unless your family gets through something at a phenomenal rate. Things like pet food are good, sugar too if you do a lot of home baking, that kind of thing. Toilet paper and kitchen roll are great to buy in bulk if you have the storage space and toothbrushes are good too. You'll always need them, always need to replace them, they don't take up much space and don't have a use by.  The rules differ from family to family. Look at what your family uses and how much time it takes to get through something. That's the best place to start. Is it worth saving HSA funds until retirement? Yes Are there pros and cons from a tax perspective?  Mostly pros. This has all of the benefits of an IRA, but if you use it for medical expenses then you get to use the money tax free on the other side. Retirement seems to be the time you are most likely to need money for medical expenses. So why wouldn't you want to start saving tax free to cover those expenses? The cons are similar to other tax advantaged retirement accounts. If you withdraw before retirement time for non-medical purposes, you will pay penalties, but if you withdraw at retirement time, you will pay the same taxes you would pay on an IRA. I should note that I put my money where my mouth is and I max out my contribution to my HSA every year. First let's define some terms. Your accrued benefit is a monthly benefit payable at your normal retirement age (usually 65). It is usually a life-only benefit but may have a number of years guaranteed or may have a survivor piece. It is defined by a plan formula (ie, it is a defined benefit). A lump sum is how much that accrued benefit is worth right now. Lump sums are based on applicable interest rates and mortality tables specified by the IRS (interest rates are released monthly, mortality annually). Your plan can either use the same interest rates for a whole year, or they can use new ones each month. Affecting your lump sum is whether your accrued benefit is payable now (immediately, you are age 65), or later (deferred, you are now age 30). For example, instead of being paid an annuity assume you are paid just one payment of $1,000 on your 65th birthday. The lump sum of that for a 65 year old would be $1,000 since there would be no interest discount, and no chance of dying before payment. For a 30 year old, at 4% interest the lump sum would be about $237 (including mortality discount). At age 36 the lump sum is $246. So the lump sum will get bigger just because you get older. Very important is the interest discount. At age 30 in the example, 2% interest would produce a $467 lump sum. And at 6% $122. The bigger the rate, the smaller the lump sum because interest helps an amount now grow bigger in the future. To complicate things, since 2008 the IRS bases lump sums on 3 different interest rates. The monthy annuity payments made within 5 years of the lump sum date use the 1st rate, past 5 and within 20 years use the 2nd rate, and past that use the 3rd rate. Since you are age 30, all of your monthly annuity payments would be made after 20 years, so that makes it simple since we'll only have to look at the 3rd rate. When you reach age 45 the 2nd rate will kick in. Here is the table of interest rates published by the IRS: http://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates You'll find your rates above on the 2013 line for Aug-12. That means your lump sum is being made in 2013 and it is being based on the month August 2012. Most likely your plan will use the same rates for its entire plan year. But what is your plan year? If it is the calendar year, then you would have a 5 month lookback for the rates. But if is a September to August plan year with a 1 month lookback, the rates would have changed between August and September. Your August lump sum would be based on 4.52%, your September on would be based on 5.58% (see the All line for Aug-13). For comparison, a 30 year old with a $100 annuity payable at age 65 would have a lump sum value of $3,011 at 4.52%, but a lump sum value of $1,931 at 5.58%. The change in your accrued benefit by month will obviously have some impact on the lump sum value, but not as much as the change in interest rates if there is one. The amount they actually contribute to the plan has nothing to do with the value of the lump sum though. "Assuming the numbers work out roughly the same (and you can frankly whip up a spreadsheet to prove that out), a defined benefit scheme that pays out an amount equal to an annuitized return from a 401(k) is better.  The reason is not monetary - it is that the same return is being had at less risk. Put another way, if your defined benefit was guaranteed to be $100/month, and your 401(k) had a contribution that eventually gets to a lump sum that, if annuitized for the same life expectancy gave you $100/month, the DB is better because there is less chance that you won't see the money. Or, put even simpler, which is more likely? That New York goes Bankrupt and is relieved of all pension obligations, or, the stock market underperforms expectations.  Neither can be ruled out, but assuming even the same benefit, lower risk is better. Now, the complication in your scenario is that your new job pays better.  As such, it is possible that you might be able to accumulate more savings in your 401(k) than you might in the DB scheme.  Then again, even with the opportunity to do so, there is no guarantee that you will.  As such, even modelling it out really isn't going to dismiss the key variables. As such, can I suggest a different approach?  Which job is going to make you happier now?  Part of that may be money, part of that may be what you are actually doing.  But you should focus on that question. The marginal consideration of retirement is really moot - in theory, an IRA contribution can be made that would equalize your 401(k), negating it from the equation.  Grant you, there is very slightly different tax treatment, and the phaseout limits differ, but at the salary ranges you are looking at, you could, in theory, make decisions that would have the same retirement outcome in any event. The real question is then not, ""What is the effect in 20 years?"" but rather, which makes you happier now?" I'm not the guy you're responding to, but you asked a good question. There's a dearth of data, but [about 1% is the estimate.] (http://www.businessinsurance.com/article/20110814/NEWS03/308149986#)  Either way, having increased young adults on an insurance plan is a good thing. Socially, this demographic is exceptionally stinging from the Great Recession and I think the ability to give young adults health insurance (and thus the freedom to start developing a career without worrying about health coverage) outweighs the nominal additional premium costs. Fiscally, having young adults in a group plan decreases the risk profile of that plan since young adults don't incur the same expenses that a 45 or 50 year old would. I'm normally a fan of trying to put all the relevant info in an answer when possible, but this one's tough to do in one page.    Here's the best way, by far to learn the basics: The OIC (Options Industry Council) has a great, free website to teach investors at all levels about options. You can set up a learning path that will remember which lessons you've done, etc.  And they're really, truly not trying to sell you anything; their purpose is to promote the understanding and use of options.