Tuesday, March 15, 2011

Long-Term Care and Your IRA

There are multiple ways to prevent the loss of the future purchasing power of your IRA. One of the quickly-becoming-popular avenues is to purchase a long-term care (LTC) insurance policy to protect your IRA from loss due to the cost of a long-term care issue.

If you make a yearly withdrawal from the IRA to pay for a long-term care insurance policy, it will protect the account holder and his/her beneficiaries should one of those events occur. The cost of such a policy will determine the yearly withdrawal, but it could protect your IRA account from costs up to $200,000 a year for a typical nursing home stay.

Other benefits of a long-term care policy include tax deductible protection for all forms of nursing home and home health needs and other forms of services like assisted living. It is even recommended that you add a policy for your spouse as additional protection.

*Information from this article was provided by Master Elite IRA Advisor Bill Upson in an October 2005 newsletter.  All information in this article is current. 

By Jared Trexler
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*Copyright 2011 Ed Slott and Company, LLC 


Scott A Olson said...

There’s a new type of long-term care policy that can protect your assets from Medicaid even after the policy runs out of benefits. These government-approved policies are like a traditional long-term care policy “on steroids”. Here’s an explanation of how these policies work: