Smart LTC plan using IRA funds
PETALUMA, Calif., May 27, 2025 /PRNewswire-PRWeb/ -- For many Americans, long-term care is one of the greatest financial risks in retirement. The average cost of nursing home care in America in 2025 is over $100,000 a year. With a 3 in 4 chance of needing care, how will you pay?
Statistics show that on average, men need 2 years of care and women need 3 years — a average total of 5 years for a couple. Some men may require 6 years of care, and some women only 1 year... there's no way to tell ahead of time. When evaluating an insurance plan, consider your current health, medical history and genetics.
Today, there's a simple and strategic way to use existing retirement savings like an IRA or 401(k) to address this risk without triggering a large tax penalty or compromising your legacy.
This innovative financial solution allows you to transfer funds from your current retirement account into a specially designed, qualified annuity. This annuity is held in an account with interest and over the course of ten years annual withdrawals are made from the annuity to purchase an asset-based guaranteed life insurance policy with long-term care benefits.
This strategy offers dual protection: if long-term care is needed, the policy provides substantial benefits to help cover those costs. If care is not needed, the death benefit is passed on to a named beneficiary. You need to insure before care is needed.
"It's a smart way to repurpose existing savings for future protection if not needed for income," says Michael McDonnell, a 20-year veteran insurance broker. "You're not just planning for care — you're also safeguarding your family's financial future. Long-term care insurance alleviates the heavy burden families face when a loved one requires extended care."
Best of all, this approach allows you to address long-term care without the risk of "use it or lose it" or rate increases that come with traditional policies. Long-term care benefits are tax-free; only the annual qualified annuity withdrawal is taxable.
"The cost of long-term care services — whether they are provided in the home, at a community facility, or in a nursing home — is not covered under major medical plans or Medicare, and can be a threat to your retirement savings." Morgan Stanley
According to CMS, 70% of Americans will need some long term care not covered by health insurance or Medicare. If you had a 70% chance of a house fire or car accident, would you not have insurance and how much would insurance cost?
Interested in learning more about this?
Contact us today at https://lifeinsuranceltc.com to explore how this strategy can work for your retirement plan.
Media Contact
Michael McDonnell, National LTC, 1 888-582-2464, [email protected], https://lifeinsuranceltc.com
SOURCE National LTC
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