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Today's question comes from Drew in Pennsylvania.

My wife and I are 35 years old with no children yet.

We are on Baby Step 7 and have $750,000 in retirement and a half a million dollar home with a balance owed of $250,000.

Okay, so you're not on Baby Step 7 quite yet.

I hear you talk about having enough life insurance to replace our income, but my current income is 375,000 and my wife's is

100,000 with no debt, is it really necessary to have insurance in place before we have children?

Well, again, life insurance is there to replace your income and you guys are living, I don't know, lifestyle wise. I mean, you're,

you know, close to half a million making that per year. And so I would consider you self-insured

once the home is, if the home is paid off, that feels self-insured to me. But if something

were to happen to you and your wife was making a hundred grand,

could she be okay with the mortgage? Could she pay all of that and be self-sufficient? So I like the idea of still having 10 to 12 times your annual income for a buffer. And if you guys are

both healthy at 35, when Winston, I just redid our life insurance,

probably two years ago. And we did term life with Xander. And it's just so inexpensive that a part

of me is like, just do it now. And then once the house is paid off, then you guys can have that

discussion. But it's so inexpensive. Yeah, I would definitely still keep it. Because again,

if something happened to you, your wife makes 100 grand, you know, what's that stress going to be for her of having to still make that mortgage payment every month?

Yeah. There's less of a burden on you guys than if you had children and your wife did not have a wonderful career that she has. Okay. But if something

happens to you, she's in a pinch right now. That's a lot of house for 100K. And so, yeah, you

need to be carrying some on you. Now, if you want to do a different formula than the typical,

the typical formula I recommend, and Rachel just quoted it, is 10 to 12 times your income and insurance. Now, the reason for that, let's just back up. Let's pretend someone else called in. They said, okay, I make $80,000 a year. So 10 to 12 times would be $800,000 to a million, which on a 35-year-old is the cost of a pizza. if you don't smoke and you're not fat, okay? It's simple. Obesity and smoking or kill your rates, all right? And so if you're in good, decent shape and you don't smoke, and those are both things you can control, by the way, hello. And so, you know, now you get good rates and it's very inexpensive to have a million dollars.

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