Annuities offer relief as long term care costs increase

Baby boomers are entering retirement at an astounding rate, and this group happens to control a vast amount of the nation’s wealth. But as they enter their senior years and begin to suffer many of the ails that come with being older, much of that money is being spent to support medical and assisted living needs. Following are the median costs nationwide for care:

In-Home Care
Homemaker Services $4,481
Home Health Aide $4,576
Community & Assisted Living
Adult Day Health Care $1,603
Assisted Living Facility $4,300
Nursing Home Facility
Semi-Private Room $7,756
Private Room $8,821
Source: Genworth Financial

The wealthiest generation in our nation’s history is not as prepared for retirement as they might have assumed. The tax structure is complex, they are dealing with qualified retirement funds being taxed, they are losing tax shelters, and new costs in healthcare and long term care are putting the crunch on them. Enter the annuity strategy to help offset some of these costs.

Annuities are a powerful tool for seniors for many reasons; however, today, we will address just two of those advantages. The ability to leverage annuities to help offset long term care costs. Here is how:

Funds Can Be Used for Long Term Care

If you’re financially over-qualified for Medicare assistance, but still need to use your own assets to cover long term care costs, you can access the funds of the annuity tax-free (in some circumstances). This keeps you from having to divest larger retirement accounts and your cash accounts. At your passing, the balance of the annuity funds bypass probate and will go directly to your heirs. Finally, underwriting for annuities is streamlined and not dependent on health issues. So, if you have pre-existing conditions that will ultimately place you into long term care, you can quickly move funds from other retirement vehicles such as IRAs, 401(k) plans, and the like, into annuities for additional tax protection and strong probate protection.

Terminal Waiver

If you’re diagnosed as terminally ill (usually 24 month prognosis), any surrender charge fees are waived and the account can be fully accessed or surrendered for covering healthcare costs, preparing end-of-life directives, and even taking those trips some always dream of.

Contact Your Annuity Master to see if an annuity might be a good fit by taking this quick Annuity Assessment.