A retirement plan represents decades of work and careful saving. Yet one of the biggest risks to those savings is the cost of long term care. Many people believe Medicare will cover these expenses, but it does not. Medicare may help with short-term skilled nursing, but not with daily personal assistance or home care.
In California, part-time home care can cost several thousand dollars per month, and full-time assistance can exceed one hundred thousand dollars annually. These costs are often paid directly from personal savings, quickly reducing retirement assets that were meant to last a lifetime.
The key to protecting your savings is to plan before care is needed. Long Term Care insurance and Long Term Care annuities help ensure that care is paid for using insurance benefits rather than drawing down investment or retirement accounts.
A Long Term Care annuity can turn a single deposit into two or three times that amount in benefits for qualified care expenses. These benefits are generally tax free when used for long term care needs. If care is never needed, the remaining value can be returned or passed on to beneficiaries, protecting both liquidity and legacy value.
Asset-based LTC solutions allow you to reposition part of your savings for more efficient use. Instead of leaving funds in a low-growth account that may be spent down during a health event, you can place them in an annuity structure that multiplies the available funds for care while maintaining control.
This strategy allows you to:
- Protect principal
- Increase available funds for future care
- Preserve other retirement assets for lifestyle and legacy goals
It is not about purchasing a product. It is about reallocating assets to strengthen your financial position.
Financial planning is ultimately about control, over your lifestyle, your care choices, and your future. By preparing for long term care costs, you protect your ability to choose where and how you receive care while keeping your retirement income plan intact.
Planning also eases pressure on family members, allowing them to support you emotionally rather than financially.
Frequently Asked Questions
**Q: Does Medicare cover long term custodial care?**
A: No. Medicare may cover short-term skilled nursing, but not ongoing daily care.
**Q: Are Long Term Care annuity benefits tax free?**
A: Benefits used for qualified long term care expenses are typically federal income tax free.
**Q: What if I never need care?**
A: The remaining contract value can be returned or passed to beneficiaries.
At Landau Insurance Brokers in Los Angeles, we help clients protect their retirement savings through thoughtful, tax-advantaged planning. Whether you are approaching retirement or already retired, our goal is to help you keep your assets secure and your independence intact.
