Role of Long-Term Care Insurance in Retirement Planning
Preparing for the rising costs of long-term care services is increasingly becoming an essential aspect of comprehensive retirement planning. Long-Term Care Insurance has become a significant component of retirement strategies, with added tax advantages available to policyholders.
For those who are self-employed or operate an LLC, S corporation, or C corporation, premiums can be deducted as a business expense without the requirement to offer coverage to employees. Additionally, qualified funds from a 401(k), SEP, IRA, or 403(b) can be used to pay for the policy, with the proceeds always remaining tax-free.
Partnership policies offer additional dollar-for-dollar asset protection, while hybrid policies—which combine life insurance or an annuity with Long-Term Care Insurance—include a death benefit. However, it’s important to note that not all “hybrid policies” meet federal guidelines for Long-Term Care Insurance, so careful selection is crucial.
More than half of individuals who reach the age of 65 will require assistance with daily living activities or supervision due to dementia. The financial impact is substantial, but the emotional and logistical burden on loved ones can be life-changing.
While most people acquire coverage in their 40s or 50s, affordable options are still available for those in their 60s and beyond, depending on their health. Learn more about Long-Term Care Insurance, aging, caregiving, health, lifestyle issues, and retirement planning, explore the tools and resources available on LTC NEWS.
