Long Term Care Insurance Pension Protection Act May Help Save on Taxes
If you currently receive, or will be receiving, a pension you may be able to pay your Long Term Care Insurance premiums with pre-tax dollars. The Long Term Care Insurance Pension Protection Act of 2006 (in Section 845) was a piece of legislation that will allow the premiums for a Long Term Care Insurance policy to be paid pre-tax if the premiums are paid straight from the pension.
Police, firemen, state and federal employees may have this tax savings payment method as an option. This will provide you with tax savings while protecting the greatest risk you may face in your retirement—needing long term care. Even teachers may be able to participate, so check with your pension department. If they don’t have it set up, demand that they do. If you’re in a 26% tax bracket, using the Long Term Care Insurance Pension Protection Act of 2006’s features will essentially save you 26% on your Long Term Care Insurance premiums.
Welfare Pays 45% of All Long Term Care
Medicaid (your tax dollars) pays for a whopping 45% of all long term care. The reason for the high percentage is that people don’t plan, and many ultimately do need long term care. They start paying for their care out of pocket and then run out of money, after exhausting a life-times’ worth of hard work. When the government gives tax breaks like in the Long Term Care Insurance Pension Protection Act, it encourages citizens to plan for needing long term care during their retirement themselves by buying a private with pre-tax dollars.
The Long Term Care Insurance Pension Protection Act is a common sense way the government can encourage action without having to over-step the Constitution and force people to buy health insurance like was done when Obamacare was forced down America’s throat in 2010. Fast forward today, the truth has come out and the 714 Billion projected cost of Obamacare is now projected by the CBO to cost 2.6 Trillion. Also, the IRS recently projected the average cost for a family of four’s health insurance premiums will be $20,000 per year. Whole Foods (tickerWFM) founder John Mackey wrote a great article in the Wall Street Journal.
Long Term Care Insurance Pension Protection Act can help save
Long Term Care Insurance is the single most important insurance tool that a person can buy during their retirement. Long Term Care Insurance Pension Protection Act may especially help, firemen, and teachers—all who are receiving pensions may be able to buy Long Term Care Insurance pre-tax if paid by your pension department. Of course, when dealing with any tax matter refer to your CPA and pension department. If you don’t have success finding the answers give us a call and we can help you find the right person in the pension department to get to the facts.
At LTC Tree we are familiar with the Long Term Care Insurance Pension Protection Act and have been helping people plan for long term care insurance all over the country. The Long Term Care Insurance Pension Protection Act tax savings strategy is possible as we’ve had 100+ clients take advantage of this tax rule.