The facts speak for themselves. 70% percent of us will need some form of long term care. 40% of us will need nursing home level of care. The average cost for this level of care in 2014 was $87k annually. That’s expected to rise to $123k by 2024, and $144k by 2034!
There are only 3 ways for you to fund this care. You can fall on the good graces of the government, you can fund it yourself out of pocket, or you can fund it through long term care coverage. Obviously Long Term Care insurance is the most preferable. But what about the cost?? Well what if that cost was 100% tax deductible? Well now IRS Increases Tax Deductions for Long Term Care Insurance.
According to the Insurance Insider Newsletter, IRS reports for 2014 reveal that nearly 5.1 million tax filers with incomes of $40,000 to $100,000 reported medical expenses that exceeded adjusted-gross income limits. Starting in 2017, all individuals can deduct qualified medical expenses that exceed 10% of adjusted gross income for the year. The limit is 7.5% of adjusted gross income for 2016, for individuals 65 and older. The IRS allows individuals to deduct medical expenses including preventative care, dental and vision care, prescription medications, glasses, contacts and hearing aids. Traditional long-term care insurance premiums can be included in the term “medical care.”
“For retired seniors,…reduced income and increased medical costs means that the cost of traditional long-term care insurance can be all or mostly tax deductible. Many seniors have medical expenses that don’t meet the adjusted gross income limit. But they exceed the limit when the cost of long-term care insurance is included, which provides a significant tax deduction. This is a real benefit for the 23 million individuals age 65 or older who file federal tax returns,” says the article.
In the end, a thorough understanding of your current financial situation, your current health, etc. is the optimum way to determine what you need and which policy is right for you. Read more at the link below then call me, let’s discuss it.