Planning Scenario #5

LTC costs can be a significant concern even for affluent clients in or near retirement, and sometimes, LTC Planning is more about convenience and integration into an estate or financial plan than merely covering the cost of care.  With that in mind, consider The Look-Alike Roth IRA Strategy as an effective way to begin the LTC Planning discussion, especially if your income precludes Roth IRA contributions.   

This strategy merges the benefits of a Roth IRA with traditional LTC insurance.   However, it becomes a very attractive planning strategy by overcoming the shortcomings of traditional LTC insurance.  Quite simply, it leverages Hybrid Life/LTC Planning solution to provide features and benefits such as:

• No Income Caps or Contribution Limits
• Distributions for Long-Term Care will be free from federal income tax.
• Cost Certainty for contribution as amount and duration are guaranteed.
• Flexibility and control with a "Live, Quit, or Die" value proposition.
• Estate Planning advantage as a death benefit will pass tax-free to heirs.

The Look-Alike Roth IRA may not suit everyone, but the scenario below can help you understand the concept and determine whether the strategy fits your planning.

- Sam & Sue are both 60 years old and have significant assets in non-qualified and qualified accounts.

-  Their CPA advised against a Roth IRA conversion, but they like the Roth concept. 

-  Their income exceeds what they need to maintain their lifestyle or qualify for a Roth IRA.

- A HALO Assessment was completed, projecting a seven-year need for care.

- Their current Long-Term Care "Plan" would be Self-Fund the cost of care. 

- The idea of contributing to the Look-Alike Roth IRA LTC Plan is appealing, as it provides:

1. A TAX-FREE pool of funds to pay for care or.....
2. A TAX-FREE death benefit for heirs if care is not required, and.....
3. Control of the contributions should circumstances change.