Healthcare costs for anyone are rising ever higher each year. The increased costs for long term care is becoming frightening for even moderately financially stable couples and individuals approaching retirement years. Older individuals are also more likely to desire to age in place in their comfortable homes these days.

The unexpected high costs of skilled nursing care, longer term rehabilitation costs and the prices of necessary medications each month makes it seem almost impossible to plan ahead to ensure relative comfort during those golden years seniors have worked hard to enjoy.

There are some wise moves that seniors or their caregivers can use to fund the necessary healthcare needed after retirement. Talking about the state of your elderly parent’s finances is a conversation better had sooner than later. There are ways to fund your future long term care costs that everyone should consider.


How to Use Your 401k to Pay for In-Home Care

A 401k or IRA fund is a retirement plan that many employers offer to employees that can save money to be used after retirement. These employer sponsored retirement plans may include a variety of different investment options such as bonds, stocks and cash equivalents that still allow for diversification with the added bonus potential of generating a much higher return amount than standard saving’s accounts or CD’s – Certificates of Deposits. This is especially true when the average national interest rates are low like they have been lately.

Typically, most retirement savings plans place a high monetary tax penalty if funds are taken out too early. Even though 401k or IRA accounts cannot be guaranteed, most individuals earn a nice sum due to the long-term capital appreciation with significant tax deferrals. There are some ways in which individuals can access their retirement funds early that can free up cash flow when needed.


The Benefits of Utilizing an Experienced Elder Law Attorney

Speaking with an experienced elder law attorney can offer clients valuable legal advice about protecting assets, determining taxable income, possibility of a 401k payment, options in care insurance and more. This generation of seniors just reaching retirement age will not be able to rely solely on social security benefits during their retirement years like the previous generation did.

A seasoned attorney that specializes in elder law can give seniors important 401k help in setting up appropriate IRA withdrawals that will then be used solely to pay for long term healthcare costs. These withdrawals will increase the senior’s taxable income, but the usual tax benefit deduction usually transforms this money into a health savings account that is then tax free.


Advantages of Setting Up a 401k Mortgage or 401k Payout Plan

Many seniors who want to preserve their assets wonder about reverse mortgages and similar financial plans. When someone enters into most skilled nursing home facilities, the retirement home can take all but $50 a month from the retiree’s social security check. More seniors today are taking advantage of lower interest and penalty reverse mortgage loans to use their money for healthcare or other retirement expenses.

Middle aged adults often take their saved retirement pay for paying off their high interest rate mortgage or student loan obligations. Lots of homeowners are also taking out reverse mortgages on their homes to live more comfortably in their later years. These types of plans often allow the homeowner to stay in their home until they die. Some will also include the lifetime of a spouse to remain in the house for added peace-of-mind.


Can I Claim a Hardship Withdrawal from My 401k Retirement Plan to Pay My Mortgage or Healthcare Bills?

Many 401k or IRA retirement plans include a hardship withdrawal clause that the individual can access. While the 401k payout will be subject to income tax laws, the withdrawal amount does not need to be paid back if the person is eligible.

Individuals are urged to speak with their employer’s human resource representative to inquire about the details on how to pay my mortgage, student loan balance or get information on what a community spouse can keep by ways of assets that don’t have to be spent down before Medicaid kicks in.


Are Care Insurance Policies Worth the Cost?

There are a number of various care insurance policies that are designed to kick in when the insured individual needs longer term healthcare. These benefits can be a bit pricey, but some offer an affordable premium for valuable benefits later on. There are both pros and cons to these types of insurances.

It is important to read all of the fine print and added clauses on these policies. Many have a 2 year limit for long term care costs that could be a problem if the individuals need longer care. It is best to sit down with a qualified tax accountant, elder law attorney or senior citizen advocate to discuss all of these options long before there is a need for this type of healthcare.


Check Into Possible VA Benefits

If the senior needing care is a veteran or the spouse of a veteran that served at least 90 days during a war, there may be valuable benefits under the Veterans Aid and Attendance Program. Veterans may qualify for over $1,800 per month in financial benefits and a surviving spouse could collect up to $1,176 that can be used for paying off medical bills and long-term care expenses. There are additional taxable assets, bank account balance information and other criteria that need to be met as well.


Inquire About Activation of Any Term or Permanent Life Insurance Chronic Illness Riders

Some life insurance policies have chronic illness riders that can kick in to pay for medical care, prescription medications and other health-related expenses. This can be a welcome find for those needing that cash benefit now.


Cash In Valuable Savings Bonds & Other Whole Life Policy Savings

Many seniors have forgotten about valuable whole life policy savings or savings bonds that they accrued decades ago. These may be able to be sold at a decent price, and individuals are able to use the cash for healthcare expenses.

When determining the costs of retirement pay, individuals should get expert advice from their attorney or other financial professional. These finance specialists can give useful 401k help including possible 401k mortgage options, taxable assets and income tax details. Additionally, they can recommend changes to retirement funds plus oversee retirement account balance information for the individual that holds these accounts or the surviving community spouse.

It can payoff to learn more about using your 401k or other IRA retirement funds to pay for your expected in-home care expenses. There are some practical ways to cash in on insurance policies, stocks or savings bonds to have the available money needed to live comfortably through your retirement years.

For those individuals who must live on a limited income, it is smart to find out if they are eligible for Medicaid along with Medicare coverage. Before making any important decisions, talk with an elder care lawyer or finance expert to sort out concerns over valuable asset worth and review your current and expected future healthcare costs.

With some thought and careful planning, your retirement years can be made more comfortable and less stressful for you and your family members.


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