Choosing the right amount of life insurance and long-term care coverage is less about following a single formula and more about understanding what protection means for your specific life circumstances. Adequate coverage looks different for everyone, shaped by income, family responsibilities, health, lifestyle goals, and existing assets. When these policies are thoughtfully aligned with your needs, they can help protect loved ones financially while also offering confidence about your own future care. The key is knowing how to evaluate what you have and recognizing when it may be time to adjust.

Life insurance adequacy starts with clarity around its purpose. For many families, it is designed to replace income, pay off debts such as a mortgage, and cover future expenses like education or final costs. Simple rules of thumb, such as carrying seven to ten times annual income, can provide a starting point, but they rarely tell the full story. A more personalized approach considers outstanding debts, years of income that would need replacing, ongoing household expenses, and available assets or survivor benefits. This type of needs-based analysis helps reveal whether current coverage truly fills the gap or leaves loved ones exposed.

The type of life insurance you choose also matters. Term insurance is often well suited for time-limited needs, such as raising children or paying down a mortgage, while permanent insurance may play a role in estate planning, lifelong dependents, or charitable goals. As life changes, so do insurance needs. Marriage, the birth of a child, a new home purchase, career changes, or shifts in health are all natural points to revisit coverage and confirm it still aligns with your priorities.

Long-term care planning brings a different set of considerations. While not everyone will require extended care, a meaningful portion of individuals over age 65 will need some level of assistance, whether at home, in assisted living, or in a nursing facility. Costs vary widely by region and type of care, which makes local research especially important. Estimating potential expenses over a reasonable care period and comparing that figure to your savings, retirement assets, and family support can help identify whether insurance coverage may be beneficial.

There are several ways to address long-term care risk, ranging from traditional long-term care insurance to hybrid policies that combine life insurance or annuities with care benefits. Some individuals choose to self-fund part of the risk using personal assets, while others aim for coverage that addresses a meaningful portion of projected costs. Inflation protection, benefit periods, and premium sustainability all play an important role in determining whether coverage is likely to remain effective over time. As with life insurance, changes in health, retirement timing, family caregiving availability, or the insurance marketplace itself can signal a need for review.

Ultimately, determining adequacy is not a one-time decision. Both life insurance and long-terdm care coverage should evolve as your life does. Periodically reviewing policies, reassessing goals, and updating assumptions every few years or after major life events can help keep your plan aligned with reality. When questions arise, guidance from your Vision Capital Client Relationship Manager or insurance professional can provide clarity and reassurance that your coverage continues to support your long-term goals and peace of mind.

Vision Capital Management has been named to the Portland Business Journal’s annual “Largest Women-Owned Businesses” list, ranking 56 out of 120 firms based in Oregon and SW Washington.

To be considered, company representatives responded to a survey in which they shared the percentage of company ownership that was female-owned and the number of female employees. Only firms headquartered in Oregon or SW Washington counties with 50% or more female ownership and at least one local employee were included. The ranking noted that the 120 largest women-owned businesses employ nearly 8,200 workers globally, of whom about 66% are also women. Ownership of the companies is 86% female.

“We are honored to be recognized and included among so many impressive companies. When we founded our firm over 25 years ago, we were one of a handful of local, women-owned businesses. It’s exciting to see the range of organizations listed and the influence of female business leaders in our region,” said Marina Johnson, CFA, co-founder and principal.

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Disclosures
The Portland Business Journal’s Largest Women-Owned Businesses list is a ranking based on the percentage of ownership by women of companies based in Oregon and Skamania and Clark counties in Washington. Vision Capital Management, Inc. (“VCMI”) was ranked in September 2025 by Portland Business Journal 56 of 120 businesses. Only companies headquartered in Oregon or SW Washington with 50% or more female ownership and at least one local employee were considered. VCMI did not pay a fee to Portland Business Journal in exchange for inclusion in the 2025 Largest Women-Owned Businesses list. VCMI is not aware of any conflicts of interest with the Portland Business Journal’s Largest Women-Owned Businesses list.

In the most recent installment of Vanguard’s “How America Saves” annual report, data suggested that Americans are participating in retirement savings accounts at record-high levels, mostly due to the adoption of automated enrollment and access to employer-sponsored plans. However, the concerning trend that caught the attention of financial advisors was the marked increase in consumers withdrawing funds from their retirement accounts in order to pay for emergencies. In pre-pandemic days, the rate of hardship withdrawals was approximately 2%, but Vanguard reported the most recent rate to be 4.8% in 2024, with the reasons including avoiding evictions and home foreclosures, medical expenses, and tuition costs.

We have outlined strategies below that will ensure you have a strong savings cushion and will avoid dipping into retirement funds earlier than necessary.

1. Create a Realistic Budget

A solid budget is the foundation of financial stability. Follow these steps to establish a budget that works for you:

• Track Your Expenses: Monitor your income and spending to understand where your money goes. Use budgeting apps or spreadsheets to keep track.
• Prioritize Essentials: Allocate funds for necessities such as housing, utilities, food, and healthcare before spending on non-essentials.
• Set Spending Limits: Avoid overspending by setting monthly limits on discretionary expenses like entertainment and dining out.
• Use the 50/30/20 Rule: This budgeting method suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.

2. Build an Emergency Fund

An emergency fund is a crucial financial safety net that prevents you from withdrawing from retirement savings in times of crisis.

• Set a Savings Goal: Aim for three to six months’ worth of living expenses in an easily accessible account.
• Automate Savings: Set up automatic transfers to your emergency fund each month to ensure consistency.
• Use Windfalls Wisely: Direct tax refunds, bonuses, or unexpected earnings into your emergency savings instead of splurging.

3. Reduce Debt and Interest Payments

High-interest debt can quickly erode your finances, making it tempting to withdraw from retirement funds. Reduce your debt burden by:

• Paying Off High-Interest Debt First: Focus on credit card balances and personal loans that carry high interest rates.
• Consolidating Debt: Consider a lower-interest personal loan or balance transfer to reduce interest payments.
• Avoiding Unnecessary Debt: Limit borrowing for non-essential expenses and prioritize living within your means.

4. Maximize Savings Opportunities

Building wealth outside of retirement accounts ensures financial flexibility.

• Open a High-Yield Savings Account: Earn more interest on your savings by choosing an account with a competitive rate.
• Invest in a Taxable Brokerage Account: Grow your wealth through diversified investments that do not require early withdrawals from retirement funds.
• Contribute to an HSA or FSA: If eligible, these accounts help cover medical expenses without dipping into long-term savings.

5. Plan for Major Expenses in Advance

Unexpected expenses often force individuals to withdraw from their retirement savings. Prepare for large costs with these strategies:

• Set Up a Sinking Fund: Save a small amount each month for anticipated expenses like home repairs, vacations, or car replacements.
• Review Insurance Coverage: Ensure you have adequate health, auto, and home insurance to avoid large out-of-pocket expenses.
• Anticipate Future Financial Needs: Consider upcoming life events, such as college tuition or home purchases, and start saving early.

6. Stay Committed to Your Financial Goals

Protecting your retirement savings requires long-term commitment and discipline.

• Review Your Budget Regularly: Adjust your budget as needed to align with changes in income and expenses.
• Set Clear Savings Milestones: Track your progress and celebrate small financial wins along the way.
• Resist Temptation: Avoid withdrawing from retirement accounts by reminding yourself of the long-term benefits of financial security.

By implementing these budgeting and saving strategies, you can build a strong financial foundation and safeguard your retirement funds. Staying disciplined with your money today will ensure a more comfortable and stress-free future.

Sources:

1. Horwich, Jeff, “Amid a Resilient Economy, Many Americans Aren’t Ready for a ‘Rainy Day,’” Federal Reserve Bank of Minneapolis, May 31, 2024.
2. Martinez, Amethyst, “Vanguard Sees More 401(k) Hardship Withdrawals. That May Not Be a Bad Thing,” Barron’s, June 26, 2024.
3. Tergesen, Anne, “The 401(k) Has Become America’s Rainy-Day Fund,” The Wall Street Journal, March 5, 2025.
4. Vanguard, “Press Release: Vanguard Announces Record Retirement Savings Rates Among American Workers,” June 2024.