A significant portion of Beck & Lenox Estate Planning & Elder Law, LLC’s practice is helping clients find ways to pay for long-term care. A new bill aimed at making long-term care insurance more affordable has the backing, not only of us, but also of Argentum, a senior living association, and the American Seniors Housing Association.
McKnight’s Senior Living’s recent article entitled “Bill would reform tax code to make long-term care insurance more affordable, accessible” reports that the Long Term Care Affordability Act was introduced last week by Rep. Ann Wagner (R-MO), chair of the House Suburban Caucus. The bill is the House companion to tax code legislation introduced in the Senate by Sen. Pat Toomey (R-PA).
“Retirement can be expensive enough for seniors, and we should be using every tool we have to make their lives easier and more affordable,” Wagner said. “This legislation would do just that by providing for favorable treatment of long-term care through retirement accounts, allowing greater access to the necessary care they deserve.”
The new legislation would allow seniors to withdraw funds from their 401(k) accounts, 403(b) accounts and individual retirement accounts to pay for long-term care insurance.
The bill provides that up to $2,500 of a withdrawal used to pay for long-term care insurance would be excluded from income tax annually. These withdrawals would also be excluded from the 10% early withdrawal penalty tax.
“Argentum is proud to support the Long-Term Care Affordability Act, legislation to help more Americans better financially prepare for their long-term care needs,” Argentum President & CEO James Balda told McKnight’s Senior Living.
About 10,000 people now are turning age 65 every day in the U.S.. Estimates are that up to 70% will need some form of care in their lifetimes, he added.
According to Wagner, individuals from across the income spectrum would be able to take advantage of the tax benefit.
“Unfortunately, far too few Americans have adequate savings for retirement, let alone for their health and personal care,” Balda said. “We applaud Sen. Toomey and Congresswoman Wagner for their leadership in helping more Americans better access the tools to meet their future care needs.”
There are a number of other groups supporting the legislation for making long-term care insurance more affordable. They include the Alzheimer’s Association, the Alzheimer’s Impact Movement, America’s Health Insurance Plans, Edward Jones, Long-Term Care Insurance Partners, the National Association of Insurance and Financial Advisors, the National Association of Insurance Commissioners and the National Association of Health Underwriters. Elder Law attorneys like the ones at Beck & Lenox are all likely to support this as well.
Reference: McKnight’s Senior Living (March 22, 2022) “Bill would reform tax code to make long-term care insurance more affordable, accessible”