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Long Term Care Planning Tips & Cost Saving Strategies

James Zahansky, AWMA®
Principal/Managing Partner, Investment Advisor & Chief Goals Strategist

Extended care, often referred to as long-term care, presents a significant financial challenge for many families. The expenses associated with extended care, which encompasses services like in-home care, assisted living facilities, and nursing homes, can quickly accumulate and may not be entirely covered by insurance or government programs. However, by planning ahead and employing creative strategies, you can alleviate some of this financial burden. Let's explore various ideas to help manage the costs of extended care.

Plan Ahead and Be Prepared

The first step in managing extended care costs is to acknowledge its inevitability. Begin by researching the different types of care available, understanding the associated expenses, and considering options such as long-term care insurance. This research and planning phase can help you anticipate the financial challenges and prepare for them.

Explore Home Care Options

One effective strategy to reduce extended care expenses is to explore home care options. In-home care, in particular, can be a more affordable alternative to moving to a nursing home or assisted-living facility. Many older adults prefer to age in the comfort of their own homes, and home care services can provide the necessary support and assistance to make this a reality. The availability of in-home care services has also expanded, providing more options in various locations.

Investigate Medicaid

Medicaid, a joint federal and state program, offers healthcare coverage for low-income individuals and can assist in covering the costs of nursing home care for eligible recipients. However, Medicaid comes with strict income and asset limits, making it crucial to consult with an attorney or financial professional to determine eligibility and the application process.

Consider Community-Based Services

For those seeking unconventional solutions, community-based services like adult day care or respite care can be beneficial. These services provide older adults with the support they need while allowing them to remain in their homes. Additionally, they offer respite to family caregivers who may struggle to balance caregiving with other responsibilities.

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Explore Tax Benefits

Long-term care expenses may offer tax advantages, potentially allowing you to deduct some of these costs from your income taxes. While this isn't always the case, consulting with a tax professional can help you understand the available benefits and leverage them to your advantage.

An Alternative Approach: Linked-Benefit Long-Term Care Insurance

While these cost-saving strategies are valuable, it's also essential to consider insurance options for extended care. Traditional long-term care insurance has faced challenges, including rate increases and uncertainty regarding usage. An innovative alternative known as linked-benefit long-term care insurance provides a unique solution.

Linked-benefit products combine life insurance with long-term care benefits by reallocating a portion of your existing assets, such as cash, CDs, or money market funds, into a linked-benefit policy. This strategy offers several advantages, including the ability to leverage a death benefit for long-term care needs and providing an income-tax-free death benefit for beneficiaries if long-term care isn't required. You also retain control of the asset with a return-of-premium feature, enjoy guaranteed premiums, and can choose between lump-sum or multiple payments.

Planning ahead for extended care is essential to mitigate its financial impact. By exploring various strategies, you can better manage the costs associated with extended care. Additionally, innovative insurance solutions like linked-benefit long-term care insurance offer a unique approach to covering future long-term care expenses while protecting your financial well-being and legacy plans. Remember that each individual's circumstances are unique, so it's advisable to consult with financial professionals to determine the most suitable strategy for your situation.

If you’d like help in planning for your financial future, including long-term care planning, get in touch with us at Weiss, Hale & Zahansky Strategic Wealth Advisors and request a complimentary consultation. We’ll show you how we can help you create a strategic financial plan for you and your future using our Plan Well, Invest Well, Live Well™ process. Contact us at (860) 928-2341 or info@whzwealth.com.

Presented by Principal/Managing Partner James Zahansky, AWMA®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.

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