If you live long enough, someone is going to have to take care of you.
How are you going to pay for that care?
When the time comes and you need someone to take care of you, there are only THREE methods to pay for that:
- It comes from your retirement assets. And those assets are already allocated so anything that has to be spent is going to reduce the retirement plans. The current cost for full time care in Metro Twin Cities is $6,000 – $10,000 a month. If you had to take $50,000+ plus your retirement money, how would that affect that account. What if it was $120,000? What would be left for your spouse?
- You have long term care insurance plan or a LTC rider on your life insurance to provide the dollars for your care.
- Or you are dead broke and the county is providing for your care.
Minnesota participates in the Partnership Program. That means if the time comes that you must apply for care to the county, when the county starts adding up your assets, they will SUBTRACT from your assets what your long term care plans spent for you care prior. For example of you had $150,000 of long term care insurance, you can set $150,000 of your personal assets out of the calculation.
Because a long term care stand alone insurance plan is defined as medical insurance, benefits are NOT income to you. Plus you can deduct part or all of the premiums (based on your age.) Self employed business owners can deduct the full cost of personal medical and long term care insurance.
A business can also provide a discriminatory long term care plan to a key employee(s), deduct the cost with no income to that key person. This makes a very nice key person benefit.
