Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.
The Trump Administration is looking into giving tax deductions for purchasing long-term care policies and also being able to withdraw money from an IRA without penalty in order to purchase one of these policies. However, these benefits would not greatly help middle-income households even though they are the ones struggling to pay for their long-term care.
High-income households would be at a much greater benefit. They would have more ability to feel comfortable withdrawing from their IRA since, realistically, they are able to put more in to begin with. They also would be able to collect this new tax subsidy by simply shifting their income from taxable savings to a tax-free account and then using that money to pay for their long-term care insurance.
If middle-income households chose to withdraw from their IRA to purchase LTCI, they may put themselves at risk for not being able to pay for future medical expenses. Overall, these options to support people in purchasing LTCi do little for the middle-income households in America.READ MORE