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long term care planning: how to pay | Strategic Financial Planning

The best financial plans can guide retirees through the rest of their lives except for one stage of life — their final days. Retirees who becomes unable to care for themselves face daunting costs in the final stage of life that many times can leave them penniless.

One way many people protect themselves from this is buying long-term care insurance. But the costs make it difficult for many in the working class. A couple around age 50 can expect to pay around $4,000 a year for the insurance. And that premium doesn’t always stay the same. This year, some insurers raised premiums as much as 40 percent. The good news is that up to a certain limits, long-term care premiums are eligible for a tax deduction.

Many who can afford it are looking at a one-time premium for long-term care insurance. Making a lump sum payment of premiums, about $50,000, can avoid those premium increases over time. New policies can provide death benefits in case the retiree dies before needing care. The only other option is to save in an individual investment account.

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Purposeful Financial and Legacy Planning

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