Long-Term Care Insurance Just Got Less Expensive For People Who Can Already Afford Long-Term Care Insurance
An employer-provided retirement account is your best protection against living hand to mouth once you stop working and start drawing Social Security income. If you have one, you are one of the lucky few. As prices have gotten higher, wages have not risen proportionally, and neither have Social Security payouts. Meanwhile, jobs that provide retirement accounts are even harder to find. This means that, even if the balance in your retirement account is modest, you have plenty of reasons to count your blessings. People with employer-provided retirement accounts just got another reason to rejoice; this year, a new rule has gone into effect that lets people avoid early withdrawal penalties if, at least six months before your 60th birthday, you withdraw a small amount of money from your retirement account and use the withdrawn funds to pay long-term care insurance premiums. If you are too young to retire but old enough that you should write long-term care insurance premiums into your budget, contact a Tampa estate planning lawyer.
Should You Withdraw Money From Your Retirement Account to Buy Long-Term Care Insurance?
Long-term care can take many forms. It can take place in nursing homes or assisted living facilities, and for those determined to remain in their homes for as long as possible, it can entail hiring home health aides, or else family members can do all the work of caregiving, even when it means leaving the workforce and forgoing much-needed income in favor of a job where they are always on duty. Whether you are a patient or an unpaid caregiver, long-term care is always more expensive than the parties involved expect it to be. Even if you think you are well prepared, long-term care can eat up your savings. For example, you might decide that, when taking care of your house becomes too much work, you will sell your house and move to an apartment in an assisted living facility. The trouble is that rent in an assisted living facility costs thousands of dollars per month; it can easily eat up the proceeds of the sale of your house. If you keep your house but use your retirement savings to pay for long-term care, you can run out of savings. Long-term care insurance is your best protection against financial ruin in retirement.
According to a new law, you can withdraw up to $2,600 per year from your retirement account penalty free and use the money to pay for long-term care insurance premiums. This is a wise idea, unless you can afford to pay for long-term care insurance premiums without withdrawing money from your retirement account.
Contact David Toback About Paying for Long-Term Care Insurance
A Central Florida probate lawyer can help you plan for your long-term care long before you retire, when you can still find an affordable long-term care insurance plan. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
cnbc.com/2025/12/30/early-401k-withdrawals-ltc-insurance.html
