LONG-TERM CARE SELF-INSURED PLAN

According to the administration of aging, 70% of people who are 65 today will require some type of Long-Term Care in the future, which makes sense because most of us have personally experienced a loved one needing some type of custodial care (eating, bathing, dressing, transferring, toileting, and ability to control movements of the bowels and bladder). Benjamin Franklin famously said, “If you fail to plan, you’re planning to fail.” Do you have a plan?
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LONG-TERM CARE SELF-INSURED PLAN

2024 Average
Long-Term Care Cost

C O S T

Long-Term Care
Self- Insured Plan

L T C - S I P

Traditional
Qualified IRA

I R A

Action For
LTC Expenses

L T C - S I P F U N D S

B U C K E T

  • In 2024, the LTC average cost is $149,650 per year 1
  • Average care stay is 3 years 2
  • Statistically $448,950 is the amount needed to self-insure 3
  • B U C K E T

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    T H E P L A N

  • Within existing portfolio create a separate traditional IRA account titled “LTC-SIP” and deposit $448,950
  • Allocate funds accordingly with goal to keep up with inflation or better
  • T H E P L A N

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    T A X E S

  • IRS code 213 allows taxpayers to deduct total qualified unreimbursed medical care expenses that exceed 7.5% of adjusted gross income
  • T A X E S

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    E X E C U T I O N

  • Within existing portfolio create a separate traditional IRA account titled “LTC-SIP” and deposit $448,950
  • Allocate funds accordingly with goal to keep up with inflation or better
  • E X E C U T I O N

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    B U C K E T

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    T H E P L A N

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    T A X E S

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    E X E C U T I O N

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    This information is not to be used without the consent of Pacific Insurance Group Annuity benefits are not long term care insurance nor is it intended to replace long term care insurance. Pacific Insurance Group is independently contracted for Life and Health Insurance. While we are featuring this solution, keep in mind that other solutions besides the presented one is also available and may better suit your needs. Withdrawals taken prior to age 59 1/2 may be subject to IRS penalties.

    Truth About Self Insuring Long Term Care

    Bucket

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    The Plan

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    Taxes

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    Execution

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    Selling
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    Selling a home might be disadvantageous when it comes to the step up in basis on real estate
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    PENSION PROTECTION ACT (PPA)

    In 2010, the Pension Protection Act’s (PPA) long-term care benefits took effect. Before the PPA, people had to pay taxes on the tax-deferred growth inside of their traditional annuities when with-drawing money for their LTC expenses.

    MAXIMIZE ANNUITY DOLLARS FOR LTC NEEDS

    If an annuity has a LTC rider that works with the PPA, the tax-deferred dollars used to pay for qualified LTC expense are typically federal income tax-free. Additionally, some LTC products have account multipliers for LTC benefits.