I found a great article on MarketWatch.com. I've included the link below. Have a great Halloween!
http://blogs.marketwatch.com/retirement/2009/10/27/long-term-care-insurance-is-it-worth-the-bet/
Friday, October 30, 2009
Wednesday, October 21, 2009
2010 Tax Deduction Limits Announced for Long Term Care Policy Holders
IRS Announces Higher Tax Deductions For Long Term Care Insurance
The Internal Revenue Service (IRS) has approved increased deductibility levels for long term care insurance policies purchased in 2010 according to a just-issued report by the American Association for Long Term Care Insurance, the industry trade group.
Some 8.25 million Americans currently own long term care insurance and several hundred thousand new individuals purchase protection each year according to the trade group. In addition to federal tax advantages, a number of states now offer tax deductions or credits to those who purchase long term care insurance protection. A credit is a dollar-for-dollar reduction in the actual cost of insurance.
Tax deductions are limited for individuals financial experts note. However, business owners may be able to fully deduct the cost of long term care insurance for themselves and selected employees. In addition to the tax deductions, a number of insurers now are offering discounts to employers who offer coverage to as few as three employees.
There is still time to take advantage of tax deductions in 2009 and also benefit from the increased deductible limits for long term care insurance next year. To accomplish this, the policy must be purchased prior to the close of the tax year and financial professionals recommend speaking to both your insurance and accounting professional.
The federal deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
2010 Long Term care Insurance Deductible LimitsAttained Age Before Close of Taxable Year
40 or less: Deductible Limit: $ 330More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110Source: IRS Revenue Procedure 2009-50 (2010 Limits)
Written by Jesse Slome from the American Association for Long Term Care
Sunday, October 18, 2009
Sobering News Regarding Long Term Care Costs
Becky Hurley has compiled some sobering facts for many who have not planned for Long Term Care. The original article can be found at the address below:
Friday, October 16, 2009
Federal LTC Program Enrollees to Face Premium Increase
I have attached a link to an article released today showing that all federal employees, who have enrolled in the government sponsored long term care insurance program, will face a premium increase of approximately 25%. Now is the time for government employees to evaluate the coverage they are currently receiving. A private long term care protection plan may provide equal or better coverage on a more cost-effective basis.
http://www.federaltimes.com/index.php?S=4326356
Monday, October 12, 2009
Great Wake-up Call for Baby Boomers
Great article composed by Howard Gleckman, a senior Research Associated at the Urban Institute. You can find the original article at Kaiserhealthnews.org. http://www.kaiserhealthnews.org/Columns/2009/October/101209Gleckman.aspx
Baby Boomer Retirement: The News Gets Worse
Howard Gleckman, Senior Research Associate at the Urban Institute
Oct 12, 2009
Baby Boomers are tragically unprepared for financing their health and long-term care costs as they age. And some important new studies show their circumstances may be much worse in the wake of recent carnage in both the economy and financial markets.
One study by the Employee Benefit Research Institute shows that in 2008, the average 401(k) balance of 50-somethings was just $113,000, and for those in their 60s it was barely $125,000. These 401(k) plans and Social Security represent the vast bulk of most Americans’ financial nest eggs in retirement.
But even these grim statistics mask the depth of the problem for many. Only one out of every six of those in their 60s have 401(k) assets of more than $100,000. Many have less than $50,000.
Housing, of course, is the other major asset retirees can use to help pay for medical or long-term care costs. But many Boomers borrowed heavily against their home equity during the housing bubble, then suffered a big decline in their home values during the bust. The combination, according to the Center for Retirement Research at Boston College means that many of those entering retirement lost as much of a third of the equity they had in their homes at the peak of the market.
The Boomers potentially have one other resource to get them through health and long-term care crises in old age—insurance. But the news there is also bad. Retiree health coverage, once a mainstay for the aging, is fast disappearing. According to a new report by the Kaiser Family Foundation and the Health Research and Educational Trust, just 29 percent of employers even offered retiree health benefits to their workers in 2008. That was just a fraction of the nearly two-thirds of companies that provided this coverage 20 years ago.
That leaves Medicare, which faces an untenable financial future. Medicare premiums, especially for high-income retirees, will skyrocket in coming years without significant efforts to contain costs. As I noted in a recent column, many can expect to pay as much as $5,000 a year in combined premiums for Medicare Part B and Medicare Supplemental (Medigap) within a decade.
In yet one more study, EBRI looked at a 65-year-old whose former employer does not subsidize his retiree health insurance. A man in that situation will need $186,000 in savings in order to have just a 50 percent chance of paying his medical costs a decade from now. A woman must have $266,000.
Then, there are long-term care expenses. The annual cost of a nursing home stay is nearly $80,000 and can easily be more. The average cost of a home health aide is nearly $20 per hour. A typical senior will need to put aside nearly $50,000 to fund long-term care, and some will need far more. About 20 percent are expected to require care for five years or more.
However, only seven million Americans have private long-term care insurance and few show any interest in buying the product as currently designed. They will have to turn to yet another government program, welfare-like Medicaid. Yet it too faces immense financial pressures. The Congressional Budget Office estimates that, by mid-century, the federal share of Medicaid will absorb more than 16 cents of every tax dollar. States, which pay half the program’s costs, will face a similar burden.
To review the bidding, remember the average 401(k) balance for those in their 60s at the end of last year was $125,000. But they’ll need well over $200,000 in savings just to pay their medical bills.
And, of course, health care is just a fraction of a retiree’s living expenses. Where will the money come from for transportation, food, rent, utilities, and taxes? Try to pay all those bills on a Social Security check that averages about $1,200 a month.
The only good news in these studies is that they looked at the nest eggs of near-retirees at the end of 2008—which was close to the bottom of the collapse in stock prices. The market has already recovered some of those losses and, over the years, may recover more.
Yet the basic story will remain the same. We are not ready for healthy retirement, and we are desperately unprepared for the costly medical and long-term care we are likely to need in old age.
Taken together, these studies should be a wake-up call. They scream for change—in the way we save, in the Medicare and Medicaid programs, and in the way we finance long-term care.
Howard Gleckman, a senior research associate at the Urban Institute, is author of "Caring For Our Parents" and a frequent writer and speaker on long-term care issues.
Baby Boomer Retirement: The News Gets Worse
Howard Gleckman, Senior Research Associate at the Urban Institute
Oct 12, 2009
Baby Boomers are tragically unprepared for financing their health and long-term care costs as they age. And some important new studies show their circumstances may be much worse in the wake of recent carnage in both the economy and financial markets.
One study by the Employee Benefit Research Institute shows that in 2008, the average 401(k) balance of 50-somethings was just $113,000, and for those in their 60s it was barely $125,000. These 401(k) plans and Social Security represent the vast bulk of most Americans’ financial nest eggs in retirement.
But even these grim statistics mask the depth of the problem for many. Only one out of every six of those in their 60s have 401(k) assets of more than $100,000. Many have less than $50,000.
Housing, of course, is the other major asset retirees can use to help pay for medical or long-term care costs. But many Boomers borrowed heavily against their home equity during the housing bubble, then suffered a big decline in their home values during the bust. The combination, according to the Center for Retirement Research at Boston College means that many of those entering retirement lost as much of a third of the equity they had in their homes at the peak of the market.
The Boomers potentially have one other resource to get them through health and long-term care crises in old age—insurance. But the news there is also bad. Retiree health coverage, once a mainstay for the aging, is fast disappearing. According to a new report by the Kaiser Family Foundation and the Health Research and Educational Trust, just 29 percent of employers even offered retiree health benefits to their workers in 2008. That was just a fraction of the nearly two-thirds of companies that provided this coverage 20 years ago.
That leaves Medicare, which faces an untenable financial future. Medicare premiums, especially for high-income retirees, will skyrocket in coming years without significant efforts to contain costs. As I noted in a recent column, many can expect to pay as much as $5,000 a year in combined premiums for Medicare Part B and Medicare Supplemental (Medigap) within a decade.
In yet one more study, EBRI looked at a 65-year-old whose former employer does not subsidize his retiree health insurance. A man in that situation will need $186,000 in savings in order to have just a 50 percent chance of paying his medical costs a decade from now. A woman must have $266,000.
Then, there are long-term care expenses. The annual cost of a nursing home stay is nearly $80,000 and can easily be more. The average cost of a home health aide is nearly $20 per hour. A typical senior will need to put aside nearly $50,000 to fund long-term care, and some will need far more. About 20 percent are expected to require care for five years or more.
However, only seven million Americans have private long-term care insurance and few show any interest in buying the product as currently designed. They will have to turn to yet another government program, welfare-like Medicaid. Yet it too faces immense financial pressures. The Congressional Budget Office estimates that, by mid-century, the federal share of Medicaid will absorb more than 16 cents of every tax dollar. States, which pay half the program’s costs, will face a similar burden.
To review the bidding, remember the average 401(k) balance for those in their 60s at the end of last year was $125,000. But they’ll need well over $200,000 in savings just to pay their medical bills.
And, of course, health care is just a fraction of a retiree’s living expenses. Where will the money come from for transportation, food, rent, utilities, and taxes? Try to pay all those bills on a Social Security check that averages about $1,200 a month.
The only good news in these studies is that they looked at the nest eggs of near-retirees at the end of 2008—which was close to the bottom of the collapse in stock prices. The market has already recovered some of those losses and, over the years, may recover more.
Yet the basic story will remain the same. We are not ready for healthy retirement, and we are desperately unprepared for the costly medical and long-term care we are likely to need in old age.
Taken together, these studies should be a wake-up call. They scream for change—in the way we save, in the Medicare and Medicaid programs, and in the way we finance long-term care.
Howard Gleckman, a senior research associate at the Urban Institute, is author of "Caring For Our Parents" and a frequent writer and speaker on long-term care issues.
Sunday, October 11, 2009
Long Term Care Insurance 101
Please follow the posted link to the LIFE Foundation's very informative video regarding the basics of Long Term Care Insurance.
http://www.youtube.com/watch?v=c1zCNSyvlH4
http://www.youtube.com/watch?v=c1zCNSyvlH4
Friday, October 9, 2009
Long Term Care Insurance - A Gift of Love
If you knew there was a 1% chance that something could wipe out your life savings and put your family through months, possibly years of stress and hardship, would you take action to prevent it from happening? If you're like most husbands/fathers or wives/mothers, you would do everything possible to avoid a major stress or hardship to affect your family. This is the main reason people seek long term care insurance.
Unfortunately, the chances a couple will need long term care are better than 50%. Who is most affected by someone in the family needing long term care: the patient or the patient's family? Obviously, it's difficult on everyone in the family, but after care is administered and the patient passes on, who is left to deal with the bills and debt associated with the medically necessary care? Have you thought about some of the personal tasks that a patient may need help with if he/she is disabled? How comfortable would you be asking a family member to perform personal duties, that you would never dream of asking someone else to perform while you are healthy?
In the following post, I have included a link to The LIFE Foundation's video titled "Long Term Care Insurance 101." The video explains the logical reasons people seek protection against the risk of long term care, but at the end of the day, people seek this protection for their family and their assets. That's why long term care planning is truly considered a gift of love.
Unfortunately, the chances a couple will need long term care are better than 50%. Who is most affected by someone in the family needing long term care: the patient or the patient's family? Obviously, it's difficult on everyone in the family, but after care is administered and the patient passes on, who is left to deal with the bills and debt associated with the medically necessary care? Have you thought about some of the personal tasks that a patient may need help with if he/she is disabled? How comfortable would you be asking a family member to perform personal duties, that you would never dream of asking someone else to perform while you are healthy?
In the following post, I have included a link to The LIFE Foundation's video titled "Long Term Care Insurance 101." The video explains the logical reasons people seek protection against the risk of long term care, but at the end of the day, people seek this protection for their family and their assets. That's why long term care planning is truly considered a gift of love.
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