Texas Long-Term Care Partnership
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An old saying says, "Everything's bigger in Texas." Over 36% of the population of Texas is over the age of 45. For those aged 45 to 65, these are the prime years to prepare for your retirement.
There is a good chance you will live into your 80s and maybe even older. Greater longevity means a greater risk of needing long-term health care. Declining health, mobility problems, memory loss, and general frailty due to aging all lead to needing help with daily living activities or supervision due to dementia.
The costs for all this long-term health care will not be paid by your health insurance or Medicare. Unless you have little or no income and assets, you will be responsible.
Additional Asset Protection
In Texas, one way to preserve income, assets, and legacy is to buy a Partnership Long-Term Care Insurance policy. Texas participates in the federal/state long-term care partnership program. The program, authorized by the federal Deficit Reduction Act of 2005 (DRA) and signed into law by President George W. Bush, gives the states the ability to provide additional asset protection for those who purchase qualified Long-Term Care Insurance policies.
LTC Insurance provides guaranteed tax-free benefits that give you access to your choice of quality care services, including care at home. You won't be forced to spend all your money on care or have your kids become caregivers.
The Texas Long-Term Care Insurance Partnership is a collaborative effort between private Long-Term Care Insurance providers, their authorized agents, and state government agencies, including the Texas Department of Insurance, the Texas Health and Human Services Commission, and the Texas Department of Aging and Disability Services.
Texas participated in the program as an incentive for Texans to plan for their long-term health care needs. Partnership policies have an "asset disregard" benefit, inflation protection, and mandated consumer protections and tax benefits. Insurers must follow state and federal guidelines to sell partnership policies.
For example, if a Texan were to exhaust their benefits in their qualified Long-Term Care Insurance policy, they would have an equal amount of "asset disregard."
If the policy paid $350,000 in benefits, the individual would be able to protect that amount when calculating qualification for Medicaid long-term care benefits. The normal spend-down is $2000, so the individual could shelter part of their estate. In this example, they could protect the $2000 plus the $350,000 and still be able to qualify for Medicaid benefits.
Texas has a website that provides additional information on the Texas Long-Term Care Insurance Partnership program: OWN YOUR OWN FUTURE.
Whether as the result of illness, injury, Alzheimer's or other cognitive impairment, or the normal frailties of aging, you may rely on someone else to help with your daily activities. You may need care temporarily or permanently, either at home or in a residential facility.
The State of Texas
Insurance for Your 401(k)
Affordable Long-Term Care Insurance will safeguard assets like your 401(k), IRA, and 403(b) and reduce the burden extended care places on your family.
The financial costs and burdens of aging will impact you, your family, your savings, lifestyle, and legacy. Long-Term Care Insurance provides the peace of mind that most people want in their future retirement. Plus, a partnership policy provides additional asset protection.
Even a small policy offers significant asset protection at an affordable cost. The time to plan ideally is before you retire as your health and age greatly impact premium and available options. Most people obtain coverage in their 50s.
Most states have partnership Long-Term Care policies. Without Long-Term Care Insurance, you will pay for most of your care out-of-pocket. Traditional health insurance, Medicare, and supplements will only pay for a small amount of skilled care.
The U.S. Department of Health and Human Services says about half of us will need long-term care services after age 65. This means this is a considerable risk to your lifestyle and legacy. Most states have reciprocity with other states' long-term-care partnership programs, including Texas. If you move from or to Texas, your partnership asset protection follows you as well.
Texas does not offer any state tax incentive for qualified long-term care insurance as there is no state income tax. However, federal tax incentives are still available. LTC NEWS shows you which states have partnership programs and the available tax incentives available - Compare State's Long-Term Care Details | LTC News.
Partnership Long-Term Care Insurance is one of the biggest kept secrets in retirement planning. Keep in mind; however, long-term care planning is more than just about money. An LTC Insurance policy gives you access to the quality care you deserve and eases the stress and anxiety otherwise placed on your family.
Tax Benefits
An old saying says, "Everything's bigger in Texas." Over 36% of the population of Texas is over the age of 45. For those aged 45 to 65, these are the prime years to prepare for your retirement. There are tax advantages when you own your own business, including deducting the cost of Long-Term Care Insurance. Setting up an LLC in Texas can be a great way to begin this entrepreneurial journey by providing you with appropriate business structure and tax benefits.