Starting at a young age, you planned diligently for retirement taking full advantage of your 401(k) and Roth IRA. You scrimped and saved for decades and having achieved your goals, you are now prepared to fully enjoy your retirement. What could possibly go wrong?
According to a Forbes article, “The Biggest Threat To Your Assets”, you – like so many others – have overlooked one important detail: what happens if you become disabled? Without a plan to pay for long term care, if you should suffer a long term illness, your assets could be wiped out in a few years. With nursing home costs exceeding $100,000 per year, few individuals can afford such an expense for very long. Because long term care insurance is expensive, the article suggests some alternatives, including:
- Asset-based long term care. These are annuities or life insurance that allow you to use the cash value or death benefit for long term care expenses. One of the primary benefits is that if you do not use the insurance, your heirs can receive the death benefit.
- Give assets away. If you prefer to give some of your assets to your children or transfer them into an irrevocable trust, you must do it more than 5 years before you apply for Medicaid benefits.
- Self-insure. Some experts believe that you are better off if you do neither #1 or #2. Be careful with this strategy unless you have a limited amount of assets or substantial estate.
An experienced elder law attorney can help you determine how best to protect your estate.