Sam & Sue:  LTC Planning With A Look-Alike Roth IRA


Long-Term Care (LTC) costs can be a significant concern even for affluent clients in or near retirement, and sometimes LTC Planning is more about convenience and integration into an estate/financial plan than merely covering the cost of care.  With that in mind, consider The Look-Alike Roth IRA strategy as an effective way to begin the LTC Planning discussion.....especially for your high-net-worth clients.  


The Look-Alike Roth IRA merges the benefits of a Roth IRA with traditional LTC insurance.  However, it only becomes an attractive planning strategy by overcoming the shortcomings of stand-alone LTC insurance and leveraging a Hybrid LTC Planning solution to provide features and benefits such as:

  • No Income Caps or Contribution Limits
  • Distributions for Long-Term Care will be free from federal income tax.
  • Cost Certainty for contribution as amount and duration are guaranteed.
  • Flexibility & Control with a "Live, Quit, or Die" value proposition.
  • Estate Planning advantage as a death benefit will pass tax-free to heirs.


The Look-Alike Roth IRA may not suit every client; however, the case study below can help introduce the concept so you can see how to incorporate the strategy into planning discussions.....

  • Sam & Sue are both 60 years old. 
  • They have approximately $7M in assets in non-qualified and qualified accounts.
  • Their CPA advised against a Roth IRA conversion, but they like the Roth concept. 
  • Their income far exceeds what they need to maintain their lifestyle or qualify for a Roth IRA.
  • HALO Assessment was completed projecting a total seven-year need for care.
  • Their current Long-Term Care "Plan" would be Self-Fund the cost of care. 
  • The idea of contributing $30,000/year for 10 years ($300,000) into a Look-Alike Roth IRA LTC Plan is appealing, as it provides:

1)  A TAX-FREE pool of funds to pay for care or.....

2)  A TAX-FREE death benefit for heirs if care is not required, and.....

3)  Control of the contributions should circumstances change.



How many of your clients would consider this strategy in their comprehensive financial planning? 



And....Does your current LTC wholesaling resource provide a presentation tool like this?

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