5 Things to Consider if You Have Enough to Self-insure for Long-term Care

(don’t forget to checkout the video of this blog too)

A long-term care event can not only eat up a large portion of your retirement assets…

It can also eat up a large portion of your retirement income (especially if you haven’t done proper Retirement Income Planning).

But what if you have enough money to “self-insure” against a long-term care event… Should you?!

Here are 5 things you must consider before deciding to fully self-insure:

✅ How much will long-term care cost?

No one really knows the answer to this… but a long-term care event can cost upwards of $2M!

Now, you may die peacefully in your sleep and never need any type of long-term care…

But, it’s very difficult to plan for an unknown cost of this magnitude.

That’s why it’s often smart to transfer some of this risk to a company built to absorb it (and that’s what insurance companies are designed to do).

✅ Timing & Liquidity (if you self-fund)

What if all of your “long-term care” dollars are in the market?

And what if you need access to that money right as the stock market takes a huge dip (like it did in 2008)?!

Well, similar to Retirement Income Planning, having to withdraw money when the market is down means you will end up paying MUCH MORE for long-term then you otherwise would have had to.

✅ Tax Considerations

Pulling retirement funds to pay for long-term care could have very negative tax implications.

Especially considering long-term care costs are significantly outpacing tax brackets…

This means you could end up having to withdrawal taxable retirement dollars in the highest marginal tax brackets, further compounding the cost of long-term care for you.

Alternatively, leveraging the right type of insurance contract allows for a tax-free long-term care benefit so you aren’t unnecessarily giving your wealth to Uncle Sam.

✅ You May End Up Relying on Your Family to Manage Care

With a long-term care policy you have a third party who can help manage your care for you.

That means you’re not leaving the entire burden on your family.

Not only does your family usually appreciate this effort, it often ends up translating to better care and much easier financial management (since you have already earmarked funds to pay for care).

✅ Protecting Your Legacy

If given the choice, would you rather spend your own assets or somebody else’s⁉️

The obvious answer is somebody else’s…

And that’s exactly what long-term care policies do.

They give you an insurance company’s money to pay for care.

Which allows you to protect your hard-earned wealth & leave more (tax-free) wealth to your loved ones!

Let’s Chat 💬😎