:11: This document is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market or recommend any tax plan or arrangement. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. This content is not endorsed by the Social Security Administration, and our firm is not affiliated with the United States government or any other governmental agency. 24 Genworth. Nov. 21, 2019. “Cost of Care Survey 2019.” https://www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed Feb. 29, 2020. There are a number of options for covering long-term care expenses, each with its own advantages and disadvantages. It makes sense to discuss your options with a licensed insurance agent or other qualified individual, such as a tax advisor or attorney. MEDICARE Medicare may pay for up to 100 days of medically necessary care in a skilled nursing facility for each benefit period, but it only pays 100% for the first 20 days in each period; the remaining days require a copayment. However, a qualifying hospitalization must occur to activate this benefit. Those benefits do not include care or assistance that can help you remain in your home, and once Medicare stops paying, any Medicare supplement insurance policy will also stop paying. It’s also important to remember that Medicare pays for acute care, but not for long-term residency. Medicare does not provide coverage for long-term care (also called custodial care) with respect to any of the activities of daily living. FIXED INDEX ANNUITY Today, there is another option that is fast becoming a popular choice to help supplement a portion of your retirement income. A fixed index annuity (FIA) enables you to convert a current asset into guaranteed income.* It protects your hard-earned retirement savings and offers the potential for growth via an interest credit based on the performance of an external market index — without participating directly in the stock market, and without being subject to the risk of loss when that index does not perform well. You may also have the option to purchase an income or death benefit rider, which will provide additional benefits above and beyond the standard provisions of the annuity contract. However, these riders generally come with an additional cost. FIAs are designed for risk-averse retirees who want growth but cannot afford losses during retirement. Your initial premium is protected, the interest credits you earn are protected and you can even lock in a guarantee that the income you receive will increase over time to keep pace with inflation. FIAs help protect your retirement savings throughout the most key phase of your life — when you no longer have a long-term time frame to recover from market losses. A viable alternative to shrinking pension plans, an FIA is a good source for reliable income in retirement. In doing so, you transfer both market risk and the risk of outliving your retirement income to the issuing insurance company. *Guarantees backed by the financial strength and claims-paying ability of the issuing insurer. LONG TERM CARE COST Because Americans are living longer than they ever have before, the chances of needing long-term care are much higher, and this is an expense that could be far greater than your Social Security benefits will cover. In fact, the median annual cost for care in an assisted living facility in 2019 was $48,612. 24 This document is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market or recommend any tax plan or arrangement. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. This content is not endorsed by the Social Security Administration, and our firm is not affiliated with the United States government or any other governmental agency.
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