LTC Planning for couples may have unique variables to consider, particularly those in a second marriage. One factor to consider is that without proper planning, one of the individuals has a high likelihood of becoming a caregiver and/or will survive the spouse who requires care. A second factor may be that one of the individuals may want certain assets to pass on to specific heirs. Here are the planning assumptions for Nick & Nancy:
- Both are age 65, recently married (2nd marriage each), have individual assets, and plan to retire this year.
- They would “pay for care” with $200,000 in Nancy's existing annuity, which has a $100,000 cost basis, or the amount that she originally deposited into the annuity.
- They are concerned about becoming a burden on one another and their families.
- They were unaware of the Pension Protection Act or PPA and how to leverage it and potentially turn Nancy's single-life annuity into a joint-life LTC Plan.
Net Cost = No Additional Plan Cost
If you own an annuity like Nancy and Nick, which LTC Planning option would you select to maximize the existing annuity?
Quantify how much care will be needed, the type of care, and how much that care will cost you or your family.