The choices for final burial arrangements are as varied as the people who choose them. Funeral expenses have increased 25% since 1995 according to the National Funeral Directors Association. Pre-arranged services reduce problems for the survivors during the emotional and often hurried time right after death. Economically, it can make sense because you can control the expenses by shopping around.
In Pictures: Retire A Millionaire In 10 Steps
Why Pay In Advance
Funerals costs average $7,000 and are increasing. That final expense can take a bite out of the cash available in the estate at the time of death. You never know when your time will come, so if liquidity is a potential problem, a prepaid burial may be the solution.
Prepaid burial reduces the amount of life insurance needed and staves against burial cost inflation. It ensures the deceased's wishes are carried out, and the best part is it can be paid in installments. It may be uncomfortable to think about, but making these arrangements ahead of time can save your family a lot of trouble - and money. (Learn more about life insurance in Top 10 Life Insurance Myths.)
Wholesale Caskets and Urns
Only seven companies supply the stamped metal components for caskets and 12 companies assemble 90% of caskets sold in the United States. With so little competition, how do you find a bargain? Look for organizations that offer the greatest opportunity to discount - those who buy in bulk and sell with the fewest number of intermediaries. It may not be your local funeral home.
Did you know Costco (Nasdaq: COST) sells caskets? They also carry a small selection of floral sprays made for caskets. You can even get next-day shipping; however, the casket vendor only ships to certain states. For pre-need purposes, you must actually take delivery of the casket and have a place to store it, so make sure you tell your loved ones where it's stored so they can find it when you need to use it. Costco's website shows prices ranging from $924.99 to $2,599.99. The average cost of a casket purchased from a funeral home is $2,200 to $3,000.
Gravesite headstones are made to last for generations. To control the last words said about you, you may want to order it ahead of time. Beware there will still be a cost to add the death date later. The headstone needs to be stored somewhere, then placed at the gravesite at the appropriate time and there may be a fee for that also. Prices vary widely depending on whether you order a standing monument in limestone, granite or bronze, or a small flat slab. Also, couples may order a joint headstone and when the first person dies, the spouse's name will already be inscribed. Traditional grave markers and headstones average $800-$1,200.
Cemeteries also offer memorial wall markers for those who chose to be cremated. The cost for engraving your name on a wall for all eternity runs $300-$500. (To take the guesswork and headache out of settling your estate, check out Letter Of Instruction - Don't Leave Life Without It.)
Prepaid burial plots may be a bargain as the prices continue to rise by an average of $400-$600. Cemeteries often give discounts for multiple plots purchased together. One new trend is double-decker plots where couples are essentially buried on top of each other. They also offer discounts for prepaid plots that are not necessarily together, but friends and family of a recently deceased patron.
You're not just buying a sliver of land; vaults are required to house the casket. It provides support for the ground around the casket. Vaults range in price from $800 to $1,000 each. You also have to pay to open and close the graves. Pre-payment of those services run $400-$600. The savings depends on the location, but could be as much as 30%.
What if you choose a mausoleum instead of in-ground burial? The price for an individual crypt starts about $7,000 and increases by the number of people housed and the materials selected to $80,000 for six people. For a spot in an existing structure the prices depend on whether you chose an indoor or outdoor location and start about $2,500. The best discounts are usually obtained when reserving multiple slots.
As of 2008, 36% of all deaths in the U.S. result in cremation. Immediate cremations average $1000. If the family still wants a funeral, all the regular costs of a funeral apply except you can rent a coffin instead of buying it. Crematory remains are often shipped in plastic and cardboard to the designated survivor or an urn can be pre-purchased.
According the Federal Trade Commission, mortuaries that do cremations must offer alternative containers.
Donating to Science
You may think donating your body to science is the least expensive final arrangement, but what if the body was severely damaged in an accident or a fire or was exposed to a highly contagious disease? The condition of human remains determines whether it will be accepted for medical education or research. If declined, the family must be prepared to make other plans.
What if you seek to preserve life for as long as possible? Somewhere between life and death there is cryonics. This process of banking human bodies (or body parts) for future revival includes infusing the body with chemicals to prevent freezing and reducing the temperature to a state of suspension.
The costs are not cheap, typically $80,000 for just the head or $150,000 for the whole body. Alcor Life Extension Foundation, the leader in cryonics technology, does not consider itself to be in the internment or mortuary business. The company's website compares its services to freezing embryos. The prepaid services begin as soon as the client has been pronounced dead.
Funeral packages may include: transporting the body, motorcycle escorts for funeral processions, embalming, printed funeral programs, flowers, obituaries, death certificates and taxes. Some states regulate which services can be prepaid so expect to still need cash to pay for those elements.
The Bottom Line
Planning for final expenses will help estimate the amount of life insurance needed and it will decrease the stress on survivors. Prepaid funeral and burial planning may or may not be less expensive than at the time of death. It really depends on your preferences.
Get a rundown of the latest financial news in this week's Water Cooler Finance: Greece Attacks And Google Hacks.